Quarterly report pursuant to Section 13 or 15(d)

Note 13 - Related Party Transactions

v3.20.2
Note 13 - Related Party Transactions
9 Months Ended
Sep. 30, 2020
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]
NOTE
13
 -- 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
$373,000
and
$549,000
for the
three
months ended
September 30, 2020
and
2019,
respectively. Purchases from this manufacturer were approximately
$1,200,000
and
$1,100,000
for the
nine
months ended
September 30, 2020
and
2019,
respectively.  As
September 30, 2020
and
December 31, 2019,
Milestone Scientific owed this manufacturer approximately
$365,000
 and
$943,000,
respectively, 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
285,714
shares of stock at
$0.35
or
$100,000
for consulting services. These shares were issued
July 2019.


On
April 29, 2020,
the Board of Directors approved the purchase of United Systems accounts receivable (
$370,260
) See Note
6.
 
 
Milestone China
 
As of
September 30, 2020,
Milestone Scientific owned a
40%
interest in Milestone China. See Note
6.
 
 
Other
 
As of
September 30, 2020,
and
December 31, 2019,
Milestone Scientific had deferred compensation for the previous Chief Executive Officer of Wand Dental of approximately of and
$308,000
and
$380,000,
respectively which is included accrued expenses related party.

In
August 2016,
K. Tucker Andersen, a significant stockholder of Milestone Scientific, entered into an 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, 2020,
and
2019,
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 both the
three
and
nine
months ended
September 30, 2020,
and
2019,
respectively. This agreement was terminated
September 30, 2020. 

The Director of Clinical Affairs' royalty fee was approximately
$61,000
 and
$92,000
for the
three
months ended
September 30, 2020
and
2019,
respectively. The Director of Clinical Affairs' royalty fee was approximately
$158,000
 and
$292,000
for the
nine
months ended
September 30, 2020
and
2019,
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, 2020
and
2019,
respectively. As of
September 30, 2020
and
December 31, 2019,
Milestone Scientific owed the Director Clinical Affairs for royalties of approximately
$80,000
 and
$390,000,
respectively, which is included in accounts payable, related party and accrued expense, related party.