Note 5 - Investment in Unconsolidated Subsidiaries |
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Equity Method Investments and Joint Ventures Disclosure [Text Block] |
NOTE -
5 INVESTMENT IN
UNCONSOLIDATED SUBSIDIARIES Advance Ocular Science SA Advanced Ocular Sciences SA ("Advanced Ocular") is an entity organized to develop an instrument that delivers injections into the eyes. Advanced Ocular is a shell company as of
March 31, 2017, Milestone Scientific owns 25% of this entity. During 2015, Milestone Scientific advanced $78,798 for marketing and strategy planning to Advanced Ocular and they, or their organizers, are obligated to repay this advance once a public offering of Advanced Ocular equity is approved and funded in Poland during 2016. No public offering was completed in Poland as of March 31, 2017. As such, Milestone Scientific has written-off the condensed $78,798 advanced to Advanced Ocular as of December 31, 2016. Advance Ocular was not included in the consolidated financial statements at
March 31, 2017 as no investment has been made by Milestone Scientific. Milestone China Ltd. In June 2014, Milestone Scientific invested $1 million in Milestone China Ltd. (“Milestone China”) by contributing 772 STA Instruments to Milestone China for a 40% ownership interest. Milestone Scientific recorded this investment under the equity method of accounting. Milestone Scientific recorded a loss on its investment in Milestone China of Milestone Scientific incurred losses on its investment in Milestone China of $0 and $164,837, as of March 31, 2017 and 2016, respectively. Milestone Scientific' investment in Milestone China was $0 as of March 31, 2017 and December 31, 2016, respectively. $1,528,376 and $1,124,350 as of March 31, 2017 and December 31, 2016, respectively, which have been suspended.Milestone Scientific had $356,400 and $1,000,000 of related party sales of handpieces and instruments during the three months ended March 31, 2017 and 2016, respectively, to Milestone China. As of March 31, 2017 and December 31, 2016 Milestone Scientific recorded deferred revenues and deferred costs associates with sales to Milestone China of $356,400 and $181,116, and $1,001,800 and $620,041, respectively. As of March 31, 2017 and December 31, 2016 Milestone China owes $1,358,200 and $2,714,600
to Milestone Scientific for handpieces and STA instruments which is included in Accounts Receivable from related party on the condensed consolidated balance sheets
. Milestone China paid
$1,001,800 million in April 2017 to satisfy the outstanding instruments sales from 2016 and therefore $1,001,800 has been recorded in revenue related to 2016 sales for the three months ended March 31, 2017. Milestone Scientific recognizes the total revenue and costs of goods sold at the time the shipment of instruments and handpieces to Milestone China are paid. However, due to timing differences of when the inventory is sold to Milestone China and when Milestone China sells the acquired inventory to
third parties, elimination of the intra-entity profit is required as of the balance sheet date. In accordance with ASC 323 Equity Method and Joint Ventures, Milestone Scientific has deferred the gross profit associated with inventory shipped to Milestone China that has not been sold to third parties. The deferred profit of $675,391 and $630,990, as of March 31, 2017 and December 31, 2016, respectively was included within accounts receivable from related party in the condensed consolidated balance sheets. The profit deferred was $44,401 and $104,889 as of March 31, 2017 and 2016, respectively, and was included within loss on earnings from China Joint Venture on the condensed consolidated statements of operations. The following table includes summarized financial information of Milestone China:
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