Annual report pursuant to Section 13 and 15(d)

Note P - Concentration

v3.19.1
Note P - Concentration
12 Months Ended
Dec. 31, 2018
Notes to Financial Statements  
Concentration Risk Disclosure [Text Block]
NOTE P -- CONCENTRATIONS
 
Milestone Scientific has informal arrangements with
third
-party manufacturers of the STA,
CompuDent
and
CompuMed
devices, pursuant to which they manufacture these products under specific purchase orders but without any long-term contract or minimum purchase commitment. Consequently, advances on contracts have been classified as current at
December 31, 2018
and
2017.
  The termination of the manufacturing relationship with any of these manufacturers could have a material adverse effect on Milestone Scientific’s ability to produce and sell its products. Although alternate sources of supply exist, and new manufacturing relationships could be established, Milestone Scientific would need to recover its existing tools or have new tools produced. Establishment of new manufacturing relationships could involve significant expense and delay. Any curtailment or interruption of the supply, because of termination of such a relationship, would have a material adverse effect on Milestone Scientific’s financial condition, business and results of operations.              
             
For the
twelve
months ended
December 31, 2018,
an aggregate of approximately
53%
of Wand Dental’s net product sales were to
two
customers/distributors (
one
of which, Milestone China, is a related party),
43%
and
10%
respectively. For the
twelve
months ended
December 31, 2017,
an aggregate of approximately
70%
of Milestone Scientific’s net product sales were to
two
customer/distributors (
one
of which, Milestone China, is a related party),
51%
and
19%
respectively.
 
Accounts receivable for the major customer/distributors amounted to approximately or
82%,
or
49%
 and
33%
of Milestone Scientific's gross accounts receivable as of
December 31, 2018. 
Accounts receivable, including related party accounts receivable, for the major customer/distributors (
one
of which, Milestone China, is a related party), amounted to approximately
$2,555,000,
or
78%
of Milestone Scientific's accounts receivable, as of
December 31, 2017.
As of
December 31, 2018,  
Milestone China owed
$1,917,990
to Milestone Scientific. Due to the delinquent nature of the scheduled payments and Milestone China’s further liquidity constraints, Milestone Scientific reduced accounts receivable, related party and deferred revenue, related party by
$1,817,990
at
December 31, 2018.
Additionally, Milestone Scientific recorded a reserve of
$1,250,928
against the associated deferred cost, related party.