Note 11 - Related Parties |
3 Months Ended |
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Mar. 31, 2017 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] |
NOTE
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11 RELATED PARTIES Milestone Scientific has a manufacturing agreement with one of its principal manufacturers of its handpieces, which is a related party, pursuant to which it manufactures products under specific purchase orders, but without minimum purchase commitments. Purchases of handpieces from this manufacturer were manufacturer $452,352 and $636,059 during the three months ended March 31, 2017 and 2016, respectively. Milestone Scientific Inc owed $1,082,304 and $1,235,052 to this as of
March 31, 2017 and December 31, 2016, respectively.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 cost 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, respectively, 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. In
August 2013, a stockholder of Milestone Scientific entered a three -year agreement with Milestone Scientific to provide financial and business strategic services. Expenses recognized on this agreement were $25,000 and $35,000 for the three months ended March 31, 2017 and 2016, respectively. |