Mark One
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Quarterly Period Ended September 30, 2005
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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MILESTONE SCIENTIFIC, INC.
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(Exact name of Registrant as specified in its charter)
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Delaware
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13-3545623
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State or other jurisdiction
or organization) |
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(I.R.S. Employer
Identification No.) |
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220 South Orange Avenue, Livingston, New Jersey 07039
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(Address of principal executive office) (Zip Code)
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(973) 535-2717
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(Registrants telephone number, including area code)
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PAGE
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PART I
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FINANCIAL INFORMATION
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ITEM 1
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Condensed Consolidated Financial Statements (unaudited)
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CERTIFICATIONS
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25
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September 30,
2005 |
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December 31,
2004 * |
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(Unaudited)
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ASSETS
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Current Assets:
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Cash and cash equivalents
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$
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3,651,943
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$
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3,041,306
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Accounts receivable, net of allowance for doubtful accounts of $31,720 in 2005 and
$24,903 in 2004 |
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633,035
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421,339
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Royalty receivable
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252,842
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Inventories
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1,309,940
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936,221
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Advances to contract manufacturer
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320,216
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62,034
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Prepaid expenses
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102,755
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104,562
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Total current assets
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6,270,731
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4,565,462
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Investment in distributor, at cost
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76,319
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69,956
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Equipment, net
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559,358
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612,263
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Patents, net
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419,709
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101,242
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Other assets
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26,711
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20,408
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Totals
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$
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7,352,828
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$
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5,369,331
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LIABILITIES AND STOCKHOLDERS EQUITY
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Current Liabilities:
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Accounts payable
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$
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550,741
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$
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474,075
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Accrued expenses
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256,185
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224,549
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Total current liabilities
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806,926
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698,624
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Deferred compensation payable to officer
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262,500
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150,000
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Total liabilities
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1,069,426
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848,624
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Stockholders Equity:
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Preferred stock, par value $.001; authorized 5,000,000 shares 8% cumulative convertible preferred stock, par value $.001; authorized, issued and outstanding, 25,365 shares
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25
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25
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Common stock, par value $.001; authorized 50,000,000 shares; 11,466,024 shares issued
and 11,432,691 shares outstanding in 2005, and 9,824,287 shares issued and 9,790,954 shares outstanding in 2004 |
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11,466
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9,824
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Additional paid-in capital
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56,661,074
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52,618,913
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Accumulated deficit
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(49,477,647
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)
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(47,196,539
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)
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Treasury stock, at cost, 33,333 shares
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(911,516
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)
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(911,516
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Total stockholders equity (deficiency)
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6,283,402
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4,520,707
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Totals
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$
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7,352,828
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$
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5,369,331
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*Derived from the audited financial statements as of December 31, 2004.
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Three Months Ended
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Nine Months Ended
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September 30,
2005 |
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September 30,
2004 |
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September 30,
2005 |
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September 30,
2004 |
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Products sales, net
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$
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1,567,382
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$
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1,110,043
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$
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4,482,016
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$
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3,392,288
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Royalty income
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252,842
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472,052
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Total revenue
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1,820,224
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1,110,043
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4,954,068
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3,392,288
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Cost of products sold
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643,426
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563,730
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1,896,736
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1,879,414
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Royalty expense
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30,341
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56,646
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Total cost of revenue
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673,767
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563,730
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1,953,382
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1,879,414
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Gross profit
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1,146,457
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546,313
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3,000,686
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1,512,874
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Selling, general and administrative expenses
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1,738,286
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1,608,176
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5,194,541
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3,804,961
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Research and development expenses
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53,678
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41,679
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155,067
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135,300
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1,791,964
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1,649,855
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5,349,608
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3,940,261
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Loss from operations
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(645,507
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(1,103,542
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(2,348,922
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(2,427,387
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Other income (expense)
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Interest income
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33,132
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23,942
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67,814
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64,952
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Interest expense
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(3,576
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)
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(67,213
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)
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Other income (expense) net
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33,132
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20,366
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67,814
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(2,261
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)
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Net Loss
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(612,375
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)
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(1,083,176
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)
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(2,281,108
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(2,429,648
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)
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Dividends applicable to preferred stock
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(507
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)
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(1,544
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)
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(1,522
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)
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(1,544
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Net loss applicable to common stockholders
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$
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(612,882
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)
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$
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(1,084,720
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$
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(2,282,630
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)
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$
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(2,431,192
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)
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Loss per share applicable to common stockholders - basic and diluted
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$
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(0.05
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)
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(0.11
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)
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$
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(0.21
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)
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(0.27
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)
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Weighted average shares outstanding - basic and diluted
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11,366,617
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9,667,381
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10,738,396
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8,952,598
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Preferred Stock
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Common Stock
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Additional
Paid-in Capital |
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Accumulated Deficit
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Treasury Stock
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Shares
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Amount
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Shares
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Amount
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Total
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Balance, January 1, 2005
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25,365
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$
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25
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9,824,287
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$
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9,824
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$
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52,618,913
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$
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(47,196,539
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)
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$
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(911,516
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)
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$
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4,520,707
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Common stock and options issued for payments of patent rights acquired
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43,424
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44
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87,289
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87,333
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Common stock issued for payment of vendor services
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78,717
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79
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176,296
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176,375
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Common stock and options issued for payment of consulting services
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139,362
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140
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211,917
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212,057
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Common stock issued for payment of employee compensation
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23,461
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23
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39,978
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40,001
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Common stock issued for exercised option
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333
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0
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749
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749
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Proceeds from equity financings, net
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1,356,440
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1,356
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3,525,932
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3,527,288
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Net loss
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(2,281,108
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)
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(2,281,108
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)
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Balance, September 30, 2005
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25,365
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$
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25
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11,466,024
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$
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11,466
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$
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56,661,074
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$
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(49,477,647
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)
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$
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(911,516
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)
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$
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6,283,402
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2005
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2004
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Cash flows from operating activities:
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Net loss
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$
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(2,281,108
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)
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$
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(2,429,648
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation
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74,457
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28,481
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Amortization of debt discount and deferred financing costs
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49,119
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Amortization of patents
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13,468
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Common stock and options issued for compensation and consulting services
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428,433
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1,548
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Bad debt expense
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6,817
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Changes in operating assets and liabilities:
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(Increase) in accounts receivable
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(218,513
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)
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(93,881
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)
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(Increase) in royalty receivable
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(252,842
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)
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(Increase) in inventories
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(373,719
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)
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(341,982
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)
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(Increase) decrease in advances to contract manufacturer
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(258,182
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)
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227,630
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Decrease in prepaid expenses
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1,807
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7,202
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(Increase) decrease in other assets
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(6,303
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)
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5,364
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Increase (decrease) in accounts payable
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76,666
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(675,643
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)
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(Decrease) in accrued interest
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(81,265
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)
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Increase in accrued expenses
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31,636
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250,199
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Increase (decrease) in deferred compensation
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112,500
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(143,500
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)
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Net cash used in operating activities
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(2,644,883
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)
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(3,196,376
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)
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|
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Cash flows from investing activities:
|
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|
|
|
|
|
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Payment for capital expenditures
|
|
|
(21,552
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)
|
|
(354,888
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)
|
Payment for patent rights
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|
|
(244,602
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)
|
|
|
|
Payment for investment in distributor
|
|
|
(6,363
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)
|
|
|
|
|
|
|
|
|
|
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|
Net cash used in investing activities:
|
|
|
(272,517
|
)
|
|
(354,888
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)
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Proceeds from equity financings, net
|
|
|
3,527,288
|
|
|
7,620,104
|
|
Proceeds from exercise of option
|
|
|
749
|
|
|
|
|
Payments of note payable - officer/stockholder
|
|
|
|
|
|
(50,000
|
)
|
|
|
|
|
|
|
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|
Net cash provided by financing activities
|
|
|
3,528,037
|
|
|
7,570,104
|
|
|
|
|
|
|
|
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NET INCREASE IN CASH AND CASH EQUIVALENTS
|
|
|
610,637
|
|
|
4,018,840
|
|
Cash and cash equivalents beginning of period
|
|
|
3,041,306
|
|
|
3,277
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents end of period
|
|
$
|
3,651,943
|
|
$
|
4,022,117
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
Cash paid during the period for interest
|
|
$
|
|
|
$
|
99,359
|
|
|
|
|
|
|
|
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|
Note 1 - Summary of accounting policies:
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|
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The unaudited condensed consolidated financial statements of Milestone Scientific Inc. and Subsidiaries (the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.
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|
These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2004 included in Milestones Annual Report on Form 10-KSB. The accounting policies used in preparing these unaudited condensed consolidated financial statements are the same as those described in the December 31, 2004 consolidated financial statements.
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|
|
In the opinion of Milestone, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring entries) necessary to present fairly Milestones financial position as of September 30, 2005 and the results of its operations for the three and nine months ended September 30, 2005 and 2004.
|
|
|
|
The results reported for the three and nine months ended September 30, 2005 are not necessarily indicative of the results of operations which may be expected for a full year.
|
|
|
Note 2 Private Placements
|
|
|
|
|
On April 4, 2005 Milestone completed a $2,999,996 private placement of 101,044 Units to accredited investors. Each Unit consisted of 10 shares of Common Stock and two Warrants. Each Warrant entitles the holder to purchase a share of Common Stock at $4.89 per share through the close of business on February 16, 2009. I-Bankers Securities, Inc. acted as placement agent for Milestone in this transaction and received a fee of $209,978 and 101,044 Warrants identical in terms to those issued to the investors. Total proceeds to Milestone after commissions and other expenses were $2,730,234.
|
|
|
|
On June 30, 2005 Milestone completed an $847,960 private placement of 34,000 Units to accredited investors. Each Unit consists of 10 shares of Common Stock and two Warrants. Each Warrant entitles the holder to purchase a share of Common Stock at $4.89 per share through the close of business on February 16, 2009. Dynamic Decisions acted as investment adviser to Milestone in this transaction and received a fee of $50,878 and 600 Units, which are substantially the same form as those issued to the investors. Total proceeds from this private placement, after commissions and other expenses, were $797,054.
|
|
|
Note 3 - Royalty Receivable:
|
|
|
|
|
Royalty receivable represents the royalty due from United Systems, Inc, the licensee of Milestones proprietary consumer dental whitening product, which is sold under Milestones distributors trademark, Ionic White. The royalty receivable of $252,842 was collected on November 7, 2005.
|
|
|
Note 4 - Inventories:
|
|
|
|
|
Inventories principally consist of finished goods and component parts stated at the lower of cost (first-in, first-out method) or market.
|
Note 5 - Basic and diluted net loss per common share:
|
|
|
|
|
Milestone presents basic earnings (loss) per common share and, if applicable, diluted earnings per common share pursuant to the provisions of Statement of Financial Accounting Standards No. 128, Earnings per Share (SFAS 128). Basic earnings (loss) per common shares is calculated by dividing net income or loss applicable to common stock by the weighted average number of common shares outstanding during each period. The calculation of diluted earnings per common share is similar to that of basic earnings per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, such as those issuable upon the exercise of stock options, warrants, and the conversion of notes payable were issued during the period. Milestone has not included the common shares issuable upon conversion of
the outstanding 25,365 preferred shares in the weighted average number of shares outstanding in the computation of basic loss per share because their effect would have been anti-dilutive. This treatment is in accordance with the two class method of computing earnings (loss) per share set forth in SFAS 128.
|
|
|
|
Since Milestone had net losses for the three and nine months ended September 30, 2005 and 2004, the assumed effects of the exercise of 3,517,809 and 3,249,692 outstanding stock options and warrants, and the conversion of preferred stock into common stock at September 30, 2005 and 2004, were not included as their effect would have been anti-dilutive.
|
|
|
Note 6 Significant Customer:
|
|
|
|
|
Milestone had one foreign customer who accounted for approximately 12% and 14% of its net sales (excluding royalty income) for the three and nine months ended September 30, 2005, respectively and approximately 24% and 22% for the three and nine months ended September 30, 2004, respectively. At September 30, 2005, receivables from this customer were approximately 64% of Milestones total accounts receivable.
|
|
|
Note 7 Employee Stock Option Plan
|
|
|
|
|
As of September 30, 2005, there were 261,167 outstanding options granted under the Milestone 1997 Stock Option Plan and no option grants had been made under the Milestone 2004 Stock Option Plan. Milestone accounts for these plans under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. No stock-based employee compensation cost is reflected in net loss, as all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the dates of grant. The following table illustrates net loss and net loss per share if Milestone had applied the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation.
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
||||||||
|
|
|
|
|
|
||||||||
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss applicable to common stockholders, as reported
|
|
$
|
(612,882
|
)
|
$
|
(1,084,720
|
)
|
$
|
(2,282,630
|
)
|
$
|
(2,431,192
|
)
|
Deduct total stock-based employee compensation expenses determined under the fair value based method for all awards
|
|
|
615
|
|
|
12,687
|
|
|
228,803
|
|
|
38,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss applicable to common stockholders, pro forma
|
|
$
|
(613,497
|
)
|
$
|
(1,097,407
|
)
|
$
|
(2,511,433
|
)
|
$
|
(2,469,252
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share applicable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
(0.05
|
)
|
$
|
(0.11
|
)
|
$
|
(0.21
|
)
|
$
|
(0.27
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma
|
|
$
|
(0.05
|
)
|
$
|
(0.11
|
)
|
$
|
(0.23
|
)
|
$
|
(0.28
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair value of each option granted is estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions used for the grants in the quarters ended September 30, 2005 and 2004, respectively: dividend yield of 0%; expected volatility of 149.29% and 90%; risk free interest rate of 4.02% and 2.5%; and expected lives of 8 years and 3 years.
|
|
|
|
During the nine months ended September 30, 2005, Milestone issued 80,000 stock options to employees at an exercise price of $3.27.
|
|
|
Note 8 Agreements to Issue Common Stock and Stock Option
|
|
|
|
|
On May 18, 2005, Milestone issued to Ionic White, Inc., its marketing partner for a consumer tooth whitening product, 3-year options to purchase 100,000 shares of Milestone common stock at $4.89 per share. The options are not exercisable unless the marketing partner purchases at least 2,000,000 starter kits for the registrants consumer tooth whitening system during the twelve month period beginning July 1, 2005. If 2,000,000 starter kits are purchased during that period, options to purchase 10,000 shares become exercisable. If 2,500,000 starter kits are purchased during that period, options to purchase an aggregate of 50,000 shares become exercisable. If 3,000,000 starter kits are purchased during that period, options to purchase all 100,000 shares become exercisable.
|
|
|
|
Under a previous agreement, Ionic White, Inc., agreed to purchase 500,000 shares of Milestone common stock in quarterly installments of 125,000 shares within 10 days after the end of each of the four fiscal quarters commencing July 1, 2005. Milestone is not required to sell these shares unless Ionic White has purchased at least 625,000 starter kits in the first quarter, at least 1,250,000 starter kits in the first two quarters and at least 1,875,000 starter kits in the first three quarters. Further, at Milestones option, all shares previously purchased must be returned to Milestone and all monies paid to Milestone returned to Ionic White if it has not purchased an aggregate of at least 3,000,000 starter kits for the twelve-month period ending June 30, 2006.
|
|
|
|
On September 30, 2005 this agreement was amended to defer for an additional quarter the commencement date for Ionic Whites commitment to purchase stock.
|
|
|
|
On August 12, 2005 Milestone engaged a special marketing and sales consultant to aid in the international sale and distribution of CoolBlue Wand dental enhancement system, particularly in its applications for professional tooth whitening. As part of the compensation for a two-year consulting service, Milestone issued 40,000 shares of common stock valued at $100,000 to the consultant.
|
|
In addition, if as a result of the consultants efforts, Milestone is able to establish distribution relationships, on terms and conditions satisfactory to Milestone, with one of the four top world-wide distributors of dental products, or other major distributors as are acceptable to Milestone, and Milestone sells such distributors $3,000,000 of product within 18 months commencing August 12, 2005, Milestone will pay the consultant a $20,000 bonus, in shares of Milestone common stock, valued based on the then current market value. Furthermore, at Milestones option, all shares of common stock issued to the consultant must be returned to Milestone if the consultant has not arranged a meeting with a major distributor within a specified period.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||
|
|
September 30, 2005
|
|
September 30, 2004
|
|
September 30, 2005
|
|
September 30, 2004
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
DOMESTIC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CompuDent
|
|
$
|
365,306
|
|
|
31.6%
|
$
|
155,959
|
|
|
20.1%
|
$
|
1,070,070
|
|
|
32.6%
|
$
|
431,712
|
|
|
18.6%
|
||||
Handpieces
|
|
|
749,800
|
|
|
65.0%
|
|
587,840
|
|
|
75.5%
|
|
2,053,295
|
|
|
62.5%
|
|
1,744,609
|
|
|
75.3%
|
||||
Other
|
|
|
39,624
|
|
|
3.4%
|
|
34,016
|
|
|
4.4%
|
|
162,433
|
|
|
4.9%
|
|
140,494
|
|
|
6.1%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Domestic
|
|
$
|
1,154,730
|
|
|
100.0%
|
$
|
777,815
|
|
|
100.0%
|
$
|
3,285,798
|
|
|
100.0%
|
$
|
2,316,815
|
|
|
100.0%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CompuDent
|
|
$
|
100,103
|
|
|
24.3%
|
$
|
202,029
|
|
|
60.8%
|
$
|
392,311
|
|
|
32.8%
|
$
|
527,278
|
|
|
49.0%
|
||||
Handpieces
|
|
|
273,353
|
|
|
66.2%
|
|
116,177
|
|
|
35.0%
|
|
706,519
|
|
|
59.1%
|
|
508,823
|
|
|
47.3%
|
||||
Other
|
|
|
39,196
|
|
|
9.5%
|
|
14,022
|
|
|
4.2%
|
|
97,388
|
|
|
8.1%
|
|
39,372
|
|
|
3.7%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total International
|
|
$
|
412,652
|
|
|
100.0%
|
$
|
332,228
|
|
|
100.0%
|
$
|
1,196,218
|
|
|
100.0%
|
$
|
1,075,473
|
|
|
100.0%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DOMESTIC/INTERNATIONAL ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Domestic
|
|
$
|
1,154,730
|
|
|
73.7%
|
$
|
777,815
|
|
|
70.1%
|
$
|
3,285,798
|
|
|
73.3%
|
$
|
2,316,815
|
|
|
68.3%
|
||||
International
|
|
|
412,652
|
|
|
26.3%
|
|
332,228
|
|
|
29.9%
|
|
1,196,218
|
|
|
26.7%
|
|
1,075,473
|
|
|
31.7%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Product Sales
|
|
$
|
1,567,382
|
|
|
100.0%
|
$
|
1,110,043
|
|
|
100.0%
|
$
|
4,482,016
|
|
|
100.0%
|
$
|
3,392,288
|
|
|
100.0%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Significant Accounting Policies
|
|
|
|
|
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to accounts receivable, inventories, stock based compensation and contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from those estimates under different assumptions or conditions.
|
|
|
Inventory
|
|
|
|
|
Inventories principally consist of finished goods and component parts stated at the lower of cost (first-in, first-out method) or market.
|
|
|
Impairment of Long-Lived Assets
|
|
|
|
|
We review long-lived assets for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered.
|
|
|
Revenue Recognition
|
|
|
|
|
Revenue is recognized when title passes at the time of shipment and collectibility based on a sales arrangement and the agreed upon price is reasonably assured.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||
|
|
September 30, 2005
|
|
September 30, 2004
|
|
September 30, 2005
|
|
September 30, 2004
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Products sales, net
|
|
$
|
1,567,382
|
|
|
86%
|
$
|
1,110,043
|
|
|
100%
|
$
|
4,482,016
|
|
|
90%
|
$
|
3,392,288
|
|
|
100%
|
||||
Royalty income
|
|
|
252,842
|
|
|
14%
|
|
|
|
|
0%
|
|
472,052
|
|
|
10%
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
1,820,224
|
|
|
100%
|
|
1,110,043
|
|
|
100%
|
|
4,954,068
|
|
|
100%
|
|
3,392,288
|
|
|
100%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold
|
|
|
643,426
|
|
|
35%
|
|
563,730
|
|
|
51%
|
|
1,896,736
|
|
|
38%
|
|
1,879,414
|
|
|
55%
|
||||
Royalty expense
|
|
|
30,341
|
|
|
2%
|
|
|
|
|
|
|
|
56,646
|
|
|
1%
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs
|
|
|
673,767
|
|
|
37%
|
|
563,730
|
|
|
51%
|
|
1,953,382
|
|
|
39%
|
|
1,879,414
|
|
|
55%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
1,146,457
|
|
|
63%
|
|
546,313
|
|
|
49%
|
|
3,000,686
|
|
|
61%
|
|
1,512,874
|
|
|
45%
|
||||
Selling, general and administrative expenses
|
|
|
1,738,286
|
|
|
95%
|
|
1,608,176
|
|
|
145%
|
|
5,194,541
|
|
|
105%
|
|
3,804,961
|
|
|
112%
|
||||
Research and development expenses
|
|
|
53,678
|
|
|
3%
|
|
41,679
|
|
|
4%
|
|
155,067
|
|
|
3%
|
|
135,300
|
|
|
4%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
$
|
(645,507
|
)
|
|
-35%
|
$
|
(1,103,542
|
)
|
|
-100%
|
$
|
(2,348,922
|
)
|
|
-47%
|
$
|
(2,427,387
|
)
|
|
-71%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a)
|
Evaluation of Disclosure Controls and Procedures. Milestones management, with the participation of our chief executive officer and the chief financial officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 (the Exchange Act) Rules 13a-15(e) as of the end of the period covered by this report (the Evaluation Date). Based upon that evaluation, the chief executive officer and chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms. Information required to be disclosed by
us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
|
|
|
|
|
b)
|
Changes in Internal Control over Financial Reporting. There were no changes in our internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, Milestones internal control over financial reporting.
|
EXHIBIT NO.
|
DESCRIPTION
|
|
|
|
|
3.1
|
Certificate of Incorporation of Milestone (1)
|
|
3.2
|
Certificate of Amendment filed July 13, 1995 (2)
|
|
3.3
|
Certificate of Amendment filed December 6, 1996 (3)
|
|
3.4
|
Certificate of Amendment filed December 17, 1997 (4)
|
|
3.5
|
Certificate of Amendment filed July 23, 2003 (5)
|
|
3.6
|
Certificate of Amendment filed January 8, 2004. (5)
|
|
3.7
|
Certificate of Designation filed January 15, 2004 (5)
|
|
3.8
|
By-laws of Milestone (1)
|
|
4.1
|
Specimen stock certificate (2)
|
|
4.2
|
Intentionally Left Blank
|
|
4.3
|
Form of warrant agreement, including form of warrant (6)
|
|
31.1
|
Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
31.2
|
Chief Financial Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
32.1
|
Chief Executive Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
32.2
|
Chief Financial Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
|
||
* Filed herewith.
|
||
(1)
|
Incorporated by reference to Milestones Registration Statement on Form SB-2 No. 33-92324.
|
|
|
|
|
(2)
|
Incorporated by reference to Amendment No. 1 to Milestones Registration Statement on Form SB-2 No. 333-92324.
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(3)
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Incorporated by reference to Milestones Form 10-KSB for the year ended December 31, 1996.
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(4)
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Incorporated by reference to Milestones Form 10-KSB for the year ended December 31, 1999.
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(5)
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Incorporated by reference to Milestones Registration Statement on Form S-2 No. 333-110376, Amendment No. 3.
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(6)
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Incorporated by reference to Milestones Registration Statement on Form S-2 No. 333-110376, Amendment No. 5.
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MILESTONE SCIENTIFIC INC.
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Registrant
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/s/Leonard Osser
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Leonard Osser Chairman and
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Chief Executive Officer
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/s/Rosaline Shau
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Rosaline Shau
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Chief Financial Officer
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Dated: November 14, 2005
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