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Note 12 - Related Party Transactions
 9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]
 
NOTE
12
 -- RELATED PARTY TRANSACTIONS
 
United Systems
 
Milestone Scientific has a manufacturing agreement with United Systems (whose controlling shareholder, Tom Cheng, is a significant stockholder of Milestone Scientific), the principal manufacturers of its handpieces, pursuant to which it manufactures products under specific purchase orders, but without minimum purchase commitments. Purchases from this manufacturer were
 
approximately
$549,000
and
$
1.1
million for the
three
and
nine
months ended
September 30, 2019 ,
respectively.  Purchases from this this manufacturer were approximately
$361,727
and
$900,000
for the
three
and
nine
months ended
September 30, 2018
respectively. As
September 30, 2019
and
December
31,2018,
Milestone Scientific owed this manufacturer approximately
$1.1
 million, which is included in accounts payable, related party on the condensed consolidated balance sheets. In
February 
2019,
Milestone Scientific board of directors granted United Systems (controlling shareholder, Tom Cheng)
285,714
shares of stock at
$0.35
or
$100,000
for consulting services. These shares were issued
July 2019.
 
During  
2018
Milestone Scientific through its wholly owned subsidiary, Wand Dental, entered into an agreement with United Systems. The agreement was a Royalty Agreement for handpieces sold to Milestone China by United Systems. United Systems will pay Wand Dental a royalty equal to the net profit that Wand Dental would have received if the handpieces were sold directly to Milestone China or its Agent. As of
September 30, 2019
and  
December 31, 2018, 
Wand Dental had deferred royalty income of
$
342,540
that will be recognized at the earlier of when payment of the royalties is received from United Systems or when collectability is deemed to be assured and is included in accounts receivable, related party and deferred revenue, related party on the condensed  consolidated balance sheets.

Also, during the year ended
December 31, 2018,
a Distribution Agreement was  executed between Wand Dental and United Systems. Under the Distribution Agreement United Systems purchased
1,000
STA
instruments in
June 2018,
for delivery to Milestone China. Due to the related party nature and collectability concerns Wand Dental has deferred the sale. During
2018,
Milestone Scientific had recorded deferred revenues and deferred costs associated with the sale to United Systems of
$750,000
and
$686,365,
respectively. Milestone Scientific entered into a payment arrangement with Milestone China to satisfy past due receivables from Milestone China and it’s agents which amounted to $
2.8
million at the time of the payment arrangement. The payment terms required payments of
$200,000
per month beginning in
July 2018
through
November 2018
and a balloon payment of approximately
$1,425,000
during
December 2018. 
Due to the default on the arrangement  and Milestone China’s liquidity constraints, Milestone Scientific halted shipments to Milestone China. The Company has adjusted the accounts receivable related party and the deferred revenue related party based on the expected payment realization and recorded a reserve against the related deferred cost of
$1.25
million which includes the sales to United Systems. The amounts due from United Systems described above are included in the adjustments and reserves for Milestone China. See Note
6.
 
In
July 2019,
United System issued a credit to the Company for approximately
$151,000
for handpieces founded to be defective. The Company recorded the credit in cost of sales since  the Company previously
recorded an allowance for against inventory during 
2018.
 
Milestone China
 
Milestone Scientific owns a
40%
interest in Milestone China. See Note
6.
 
Other
 
As of 
September 30, 2019
and
December 31, 2018
Milestone Scientific recorded deferred compensation and accrued pension for Leonard Osser of approximately
$222,000
and
$387,000
  respectively which is included accrued expenses related party.
 
As of 
September 30, 2019
and
December 31, 2018
Milestone Scientific recorded deferred compensation  for Joseph D'Agostino of 
$
20,000
,
 respectively which is included accrued expenses related party.
 
As of 
September 30, 2019
and
December 31, 2018
Milestone Scientific recorded deferred compensation and accrued pension for Gian Trombetta  of approximately of
$455,000
 and
280,000
  respectively which is included accrued expenses related party.
 
In
November 2016,
K. Tucker Andersen, a significant stockholder of Milestone Scientific, entered into a
three
-year agreement with Milestone Scientific to provide financial and business strategic services. Expenses recognized on this agreement were
$
25,000
and
$
75,000
for the
three
and
nine
months ended
September 30, 2019
and
2018,
respectively.
 
In
January 2017,
Milestone Scientific entered into a
twelve
-month agreement with Innovest S.p.A., a significant stockholder of Milestone Scientific, to provide consulting services. This agreement will renew for successive
twelve
-month terms unless terminated by Innovest S.p.A or Milestone Scientific. Expenses recognized on this agreement were
$
20,000
  and
$
60,000
for the
three
and
nine
months ended
September 30, 2019
and
2018,
respectively.
 
The Director of Clinical Affairs’ royalty fee was approximately
$92,831
and
$291,024
for the
three
and
nine
months ended
September 30, 2019,  
respectively. The Director of Clinical Affairs’ royalty fee was approximately
$77,907
and
$284,437
 for the
three
and
nine
months ended
September 30, 2018,  
respectively. Additionally, Milestone Scientific expensed consulting fees to the Director of Clinical Affairs of
$39,000
and
$117,000
for the
three
and
nine
months ended
September 30, 2019
respectively. Milestone Scientific expensed consulting fees to the Director of Clinical Affairs of
$39,000
and
$146,751
for the
three
and
nine
months ended
September 30, 2018
respectively. As of
September 30, 2019
and
December 31, 2018, 
Milestone Scientific owed the Director Clinical Affairs for royalties of approximately
$416,000
 and
$364,000,
respectively, which is included in accounts payable, related party and accrued expense, related party.