Quarterly report pursuant to Section 13 or 15(d)

Note 13 - Related Party Transactions

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Note 13 - Related Party Transactions
6 Months Ended
Jun. 30, 2021
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 sole manufacturer of its handpieces, pursuant to which it manufactures products under specific purchase orders, but without minimum purchase commitments. Purchases from this manufacturer were approximately $384,000 and $751,000 for the three months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, and December 31, 2020, Milestone Scientific owed this manufacturer approximately $200,000 and $362,000, respectively, which is included in accounts payable, related party on the condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020, respectively. In June 2021, the Company signed a ten year agreement with United Systems for manufacturing the handpieces.

 

On April 29, 2020, the Board of Directors approved the purchase of United Systems’ accounts receivable ($370,260). See Note 6. 

 

Milestone China

 

See Note 6.
 
Other

 

As of   June 30, 2021 and December 31, 2020, Milestone Scientific had deferred compensation for Gian Domenico Trombetta, a director of the Company and the previous Chief Executive Officer of Wand Dental, of approximately $0.00 and $275,000, respectively, which is included in accrued expenses related party.

 

The Company engaged Mr. Trombetta as a consultant for a period of twelve months (beginning October 1, 2020 and ending September 30, 2021), to provide International Business, Dental Segment information and business contacts to the Company and provide consulting services for new International Business and dental segment. For the three and six months ended June 30, 2021 the Company expensed $15,000 and $30,000, respectively, for services.

 

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 $50,000 for each of the three and six months ended  June 30, 2021 and 2020, 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. Expenses recognized on this agreement were $20,000, and $40,000 for the three and six months months ended June 30, 2020, respectively. This agreement was terminated on September 30, 2020.

 

The Director of Clinical Affairs’ royalty fee was approximately $111,000 and $97,000 for the three months ended June 30, 2021 and 2020, respectively. The Director of Clinical Affairs’ royalty fee was approximately $248,000 and $19,000 for the six months ended June 30, 2021 and 2020, respectively. Additionally, Milestone Scientific expensed consulting fees to the Director of Clinical Affairs of $39,000  and $78,000 for each of the three and six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021 and December 31, 2020, Milestone Scientific owed the Director Clinical Affairs for royalties of approximately $134,000 and $127,000, respectively, which is included in accounts payable, related party and accrued expense, related party, in the unaudited condensed consolidated balance sheet. See Note 14(3) below for additional information about the royalty agreement