Annual report pursuant to Section 13 and 15(d)

Note R - Commitments and Other

v3.19.1
Note R - Commitments and Other
12 Months Ended
Dec. 31, 2018
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
NOTE R — COMMITMENTS
 
(
1
)  Contract Manufacturing Agreement
 
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. In
January 2018,
Wand Dental entered into a new purchase commitment for the delivery of
2,000
devices beginning in the
third
quarter of
2018,
Milestone Scientific’s purchase commitment for this purchase order was
$873,400
 at
December 31, 2018,
however an advance of
$596,724
was recorded against this purchase order. At 
December 31, 2018  
Milestone Scientific still owes
$259,801
related to this purchase order. An advance of  approximately
$649,000
 and
$697,000
 was recorded at  
December 31, 2018
and
2017,
respectively. 
 
 
(
2
)  Other Commitments
 
The technology underlying the Safety Wand® and
CompuFlo
®, and an improvement to the controls for
CompuDent
® were developed by the Director of Clinical Affairs and assigned to Milestone Scientific. Milestone Scientific purchased this technology pursuant to an agreement dated
January 1, 2005.
The Director of Clinical Affairs will receive additional payments of
2.5%
of the total sales of products using certain of these technologies, and
5%
of the total sales of products using certain other of the technologies until the expiration of the last patent covering these technologies. If products produced by
third
parties use any of these technologies (under license from us) then the Director of Clinical Affairs will receive the corresponding percentage of the consideration received by Milestone Scientific for such sale or license. 
 
The Director of Clinical Affairs’ royalty fee was approximately
$465,000
 and
$554,000
 for the years ended
December 31, 2018 
and
2017,
 respectively. Additionally, Milestone Scientific expensed consulting fees to the Director of Clinical Affairs of
$186,000
 and
$275,000
for the years ended
December 31, 2018 
and
2017,
respectively. As of 
December 31, 2018 
and
2017
Milestone Scientific owed the Director Clinical Affairs for royalties of approximately
$364,000
and
$162,000,
respectively, which is included in accounts payable, related party and accrued expense, related party.
 
The headquarters for Milestone Scientific is located at
220
South Orange Ave, Livingston, New Jersey. Milestone Scientific leases approximately
7,625
square feet of office space. The lease term expires
January 31, 2020
at a monthly cost of
$12,522.