Edgar Filing: MILESTONE SCIENTIFIC INC/NJ

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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Milestone Scientific Inc.
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(Name of Registrant as Specified in its Charter)

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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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MILESTONE SCIENTIFIC INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 20, 2006

To the Stockholders of Milestone Scientific Inc.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Milestone
Scientific Inc. ("Milestone" or the "Company") will be held at The American
Stock Exchange, 86 Trinity Place, New York, NY, on June 20, 2006 at 10:00 a.m.,
local time for the purpose of considering and acting upon the following:

1. Election of five (5) directors.

2. Approval of a compensation plan (the "Plan") to issue up to 300,000 shares of
Common Stock for services performed by officers, employees and consultants who
are natural persons.

3. Ratification of appointment of Eisner LLP as Milestone's independent auditors
for the current year.

4. Any and all matters incident to the foregoing, and such other business as may
legally come before the meeting and any adjournments or postponements thereof.

The Board of Directors (the "Board") has fixed the close of business on May 8,
2006 as the Record Date for determining the stockholders having the right to
notice of and to vote at the meeting (the "Record Date").

BY ORDER OF THE BOARD OF DIRECTORS

Leonard Osser
Chairman of the Board

Livingston, New Jersey
May 15, 2006

IMPORTANT: Every stockholder, whether or not he or she expects to attend the
annual meeting in person, is urged to execute the proxy and return it promptly
in the enclosed business reply envelope.

Sending in your Proxy will not prevent you from voting your stock at the meeting
if you desire to do so, as your Proxy is revocable at your option.

We would appreciate your giving this matter your prompt attention.

MILESTONE SCIENTIFIC INC.
PROXY STATEMENT
For Annual Meeting of Stockholders
To be Held on June 20, 2006

Proxies in the form enclosed with this statement are solicited by the
Board of Milestone to be used at the Annual Meeting of Stockholders and any
adjournments thereof, to be held at The American Stock Exchange, 86 Trinity
Place, New York, NY, on June 20, 2006 at 10:00 a.m., local time, for the
purposes set forth in the Notice of Meeting and this Proxy Statement. The Board
knows of no other business which will come before the meeting. This Proxy
Statement and the accompanying proxy will be mailed to stockholders on May 19,
2006.

THE VOTING AND VOTE REQUIRED

RECORD DATE AND QUORUM

Only stockholders of record at the close of business on the Record
Date, are entitled to notice of and vote at the Annual Meeting. On the Record
Date, there were 11,561,214 outstanding shares of common stock, par value $.001
per share. At the Annual Meeting, each share of common stock is entitled to one
vote. In the aggregate, 11,561,214 votes may be cast at the Annual Meeting.
Shares represented by each properly executed, unrevoked proxy received in time
for the meeting will be voted as specified.

VOTING OF PROXIES

The persons acting as proxies pursuant to the enclosed proxy will vote
the shares represented as directed in the signed proxy. Unless otherwise
directed in the proxy, the proxyholders will vote the shares represented by the
proxy: (i) for election of the director nominees named in this Proxy Statement;
(ii) for approval of the Plan; (iii) for ratification of the appointment of
Eisner LLP as independent auditors to audit the financial statements of the
Company for the fiscal year ending December 31, 2006; and (iv) in the
proxyholders' discretion, on any other business that may come before the meeting
and any adjournments of the meeting.

All votes will be tabulated by the inspector of elections appointed for
the Annual Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Under the Company's bylaws and Delaware law:
(1) shares represented by proxies that reflect abstentions or "broker non-votes"
(i.e., shares held by a broker or nominee that are represented at the meeting,
but with respect to which such broker or nominee is not empowered to vote on a
particular proposal) will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum; (2) there is no
cumulative voting, and the director nominees receiving the highest number of
votes, up to the number of directors to be elected, are elected and,
accordingly, abstentions, broker non-votes and withholding of authority to vote
will not affect the election of directors; and (3) proxies that reflect
abstentions or non-votes will be treated as unvoted for purposes of determining
approval of that proposal and will not be counted as votes for or against that
proposal.

VOTING REQUIREMENTS

Directors are elected by a plurality of the votes cast at the meeting.
The affirmative vote of a majority of votes cast for or against the matter by
stockholders entitled to vote is required to approve the Plan and to ratify the
appointment of independent auditors.

REVOCABILITY OF PROXY

A proxy may be revoked by the stockholder giving the proxy at any time
before it is voted by delivering oral or written notice to the Corporate
Secretary of Milestone at or prior to the meeting, and a prior proxy is
automatically revoked by a stockholder giving a subsequent proxy or attending
and voting at the meeting. Attendance at the meeting in and of itself does not
revoke a prior proxy.

EXPENSES OF SOLICITATION

We will pay the expenses of the preparation of proxy materials and the
solicitation of proxies for the Annual Meeting. In addition to the solicitation
of proxies by mail, solicitation may be made by certain directors, officers or
employees of Milestone telephonically, electronically or by other means of
communication. We will reimburse brokers and other nominees for costs incurred
by them in mailing proxy materials to beneficial owners in accordance with
applicable rules.

ELECTION OF DIRECTORS (ITEM 1 ON THE PROXY CARD)

Five (5) directors are to be elected at the Annual Meeting, each for a
term of one year and until the election and qualification of a successor.

It is intended that votes pursuant to the enclosed proxy will be cast
for the election of the four nominees named below. In the event that any such
nominee should become unable or unwilling to serve as a director, the Proxy will
be voted for the election of such person, if any, as shall be designated by the
Board. Management has no reason to believe these nominees will not be available
for election.

The following table sets forth the names and ages of each nominee, the
principal occupation of each during the past five years and the period, if any,
during which each has served as a director of Milestone. Information as to the
stock ownership of each nominee is set forth under "Security Ownership of
Certain Beneficial Owners and Management." All of the nominees to the Board have
been approved, recommended and nominated for election or re-election to the
Board by Milestone's Nominating Committee and by the Board.

NAME AGE POSITION DIRECTOR SINCE

Leonard A. Osser 58 Chairman and Chief Executive Officer 1991
Leonard M. Schiller(1)(2)(3) 64 Director 1997
Jeffrey Fuller(1)(3) 60 Director 2003
Leslie Bernhard(1) 61 Director 2003
Pablo F. Serna C. 30 Director Nominee

--------------------
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Nominating Committee

LEONARD A. OSSER has been our Chairman and Chief Executive Officer since July
1991. From 1980 until the consummation of Milestone's Public Offering in
November 1995, he was engaged primarily as the principal owner and Chief
Executive Officer of U.S. Asian Consulting Group, Inc., a New Jersey based
provider of consulting services in "work-out" and "turnaround" situations for
publicly and privately owned companies in financial difficulty.

LEONARD SCHILLER has been a director of Milestone since April 1997. Mr. Schiller
has been a partner in the Chicago law firm of Schiller, Klein & McElroy, P.C.
since 1977. He has also been President of The Dearborn Group, a residential
property management and real estate acquisition company since 1980.

JEFFREY FULLER has been a director of Milestone since January 16, 2003. Mr.
Fuller has been president and owner of two municipal water supply systems,
Hudson Valley Water Co. and Lake Lenape Water Co. since 1983, and in addition,
has been an executive recruiter since 1995.

LESLIE BERNHARD has been a director of Milestone since May 2003. Ms. Bernhard
co-founded AdStar, Inc., and since 1986 has been President, Chief Executive
Officer and a director of AdStar. AdStar is an application service
provider for the newspaper classified advertising industry.

PABLO F. SERNA C. is currently has been a director and Senior Manager at Dynamic
Decisions Group Ltd. in Milan, Italy since September 2001. Mr. Serna leads the
corporate finance team at Dynamic Decisions in investment banking and project
valuation consulting. Prior to joining Dynamic Decisions, Mr. Serna C. served as
an associate with Real Options Group in Milan for a year. Real Options Group is
an international academic research center consulting to business entities.
Before joining Real Options Group, Mr. Serna was the general manager with
Estudios, Consultorias y Asesorias Financieras, a Financial Consulting firm in
Columbia.

All directors of Milestone hold office until the next Annual Meeting of
stockholders and until their successors are duly elected and qualified. Officers
are elected to serve, subject to the discretion of the Board, until their
successors are appointed.

COMMITTEES OF THE BOARD OF DIRECTORS

Milestone's Board has established audit, compensation and nominating
committees. The Compensation Committee reviews and recommends to the Board the
compensation and benefits of all the officers of Milestone, reviews general
policy matters relating to compensation and benefits of employees of Milestone,
and administers the issuance of stock options to Milestone's officers,
employees, directors and consultants. All compensation arrangements between
Milestone and its directors, officers and affiliates are reviewed by the
Compensation Committee, the majority of which is made up of independent
directors. The Audit Committee meets with management and Milestone's independent
auditors to determine the adequacy of internal controls and other financial
reporting matters.

ATTENDANCE AT COMMITTEE AND BOARD OF DIRECTORS MEETINGS

During the year ended December 31, 2005, the Board held eleven
meetings. All directors attended more than 75% of the number of meetings of the
Board and its committees on which they served. It is Milestone's policy that
directors are invited and encouraged to attend the Annual Meeting. All of our
directors attended the 2005 Annual Meeting.

COMPENSATION COMMITTEE

The Compensation Committee reviews and recommends to the Board the
compensation and benefits of all officers of the Company, reviews general policy
matters relating to compensation and benefits of employees of the Company, and
administers the issuance of stock options to the Company's officers, employees,
directors and consultants. The Compensation Committee is comprised of Leonard M.
Schiller and Jeffrey Fuller. During the year ended December 31, 2005, the
Compensation Committee held one meeting.

AUDIT COMMITTEE

The Audit Committee was established to meet with management and the
Company's independent accountants to determine the adequacy of internal controls
and other financial reporting matters. The Board adopted a revised written
charter for the Audit Committee in July, 2005 (the "Charter"). The Audit
Committee reviewed the Company's audited financial statements for the year ended
December 31, 2005 and met with the management of the Company to discuss such
audited financial statements. The Audit Committee has discussed with the
Company's independent accountants, Eisner LLP, the matters required to be
discussed pursuant to Statement on Accounting Standards No. 61; has received the
written disclosures and the letter from Eisner LLP required by the Independence
Standards Board Standard No. 1; has discussed with Eisner LLP its independence
from management and the Company; and has given Eisner LLP full and free access
to the Audit Committee. Based on its review and discussions, the Audit Committee
recommended to the Board that the audited financial statements be included in
the Company's Annual Report on Form 10-KSB. The Audit Committee is comprised of
Leonard M. Schiller, Leslie Bernhard and Jeffrey Fuller, all of whom are
independent as defined in the applicable listing standards. The Board has
determined that Jeffrey Fuller qualifies as an Audit Committee Financial Expert
and is independent as defined in applicable federal securities laws and
regulations. During the year ended December 31, 2005, the Audit Committee held
four meetings.

NOMINATING COMMITTEE

The Company formed a Nominating Committee in May 2004. The members of
the Nominating Committee are Leonard M. Schiller and Jeffrey Fuller, each of
whom is qualified as "independent" under the applicable listing standards.

The Nominating Committee will consider director candidates recommended
by stockholders. In considering candidates submitted by stockholders, the
Nominating Committee will take into consideration the needs of the Board and the
qualifications of the candidate. The Nominating Committee may also take into
consideration the number of shares held by the recommending stockholder and the
length of time that such shares have been held. To have a candidate considered
by the Nominating Committee, a stockholder must submit the recommendation in
writing and must include the following information: the name of the stockholder
and evidence of the person's ownership of Company stock, including the number of
shares owned and the length of time of ownership; the name of the candidate, the
candidate's resume or a listing of his or her qualifications to be a director of
the Company; and, the person's consent to be named as a director if selected by
the Nominating Committee and nominated by the Board.

The stockholder recommendation and information described above must be
sent to the Company's Chief Financial Officer at 220 South Orange Avenue,
Livingston Corporate Park, Livingston, NJ 07039 and must be received not less
than 120 days prior to the anniversary date of the Company's most recent annual
meeting of stockholders.

The Nominating Committee believes that the minimum qualifications for
service as a director of the Company are that a nominee possess an ability, as
demonstrated by recognized success in his or her field, to make meaningful
contributions to the Board's oversight of the business and affairs of the
Company and an impeccable reputation of integrity and competence in his or her
personal or professional activities. The Nominating Committee's evaluation of
potential candidates shall be consistent with the Board's criteria for selecting
new directors. Such criteria include an understanding of the Company's business
environment and the possession of such knowledge, skills, expertise and
diversity of experience so as to enhance the Board's ability to manage and
direct the affairs and business of the Company, including when applicable, to
enhance the ability of committees of the Board to fulfill their duties and/or
satisfy any independence requirements imposed by law, regulation or listing
requirements.

The Nominating Committee may also receive suggestions from current
Board members, company executive officers or other sources, which may be either
unsolicited or in response to requests from the Nominating Committee for such
candidates. The Nominating Committee also, from time to time, may engage firms
that specialize in identifying director candidates.

Once a person has been identified by the Nominating Committee as a
potential candidate, the Nominating Committee may collect and review publicly
available information regarding the person to assess whether the person should
be considered further. If the Nominating Committee determines that the candidate
warrants further consideration, the Chairman or another member of the Nominating
Committee may contact the person. Generally, if the person expresses a
willingness to be considered and to serve on the Board, the Nominating Committee
may request information from the candidate, review the person's accomplishments
and qualifications and may conduct one or more interviews with the candidate.
The Nominating Committee may consider all such information in light of
information regarding any other candidates that the Nominating Committee might
be evaluating for membership on the Board. In certain instances, Nominating
Committee members may contact one or more references provided by the candidate
or may contact other members of the business community or other persons that may
have greater first-hand knowledge of the candidate's accomplishments. The
Nominating Committee's evaluation process does not vary based on whether or not
a candidate is recommended by a stockholder, although, as stated above, the
Board may take into consideration the number of shares held by the recommending
stockholder and the length of time that such shares have been held.

The Nominating Committee adopted a revised written charter in July
2005, which is available to security holders on Milestone's website at
www.milestonescientific.com.

STOCKHOLDER COMMUNICATION WITH THE BOARD OF DIRECTORS

The Board has established a process to receive communications from
stockholders. Stockholders and other interested parties may contact any member
(or all members) of the Board, or the non-management directors as a group, any
Board committee or any chair of any such committee by mail or electronically. To
communicate with the Board, any individual director or any group or committee of
directors, correspondence should be addressed to the Board or any such
individual directors or group or committee of directors by either name or title.
All such correspondence should be sent "c/o Corporate Secretary" at 220 South
Orange Avenue, Livingston Corporate Park, Livingston, NJ 07039. All
communications received as set forth in the preceding paragraph will be opened
by the Corporate Secretary of the Company for the sole purpose of determining
whether the contents represent a message to our directors. Any contents that are
not in the nature of advertising, promotions of a product or service, patently
offensive material or matters deemed inappropriate for the Board will be
forwarded promptly to the addressee. In the case of communications to the Board
or any group or committee of directors, the Company's Corporate Secretary will
make sufficient copies of the contents to send to each director who is a member
of the group or committee to which the envelope or e-mail is addressed.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial
ownership of our common stock as of March 31, 2006 by:

o each person known to us to be the beneficial owner of more than
5% of our outstanding shares;

o each of our directors;

o each executive officer named in the Summary Compensation Table
below;

o all of our directors and executive officers as a group.

Except as otherwise indicated, the persons listed below have sole
voting and investment power with respect to all shares of common stock owned by
them. All information with respect to beneficial ownership has been furnished to
us by the respective stockholder.

Shares of
Common Stock
Beneficially Percentage of
Name of Beneficial Owner (1) Owned (2) Ownership

Leonard Osser....................... 1,670,135(3) 14.50%
Thomas R. Ronca..................... *

7,435
Stuart J. Wildhorn.................. 39,203(4) *
Leonard M. Schiller................. 48,432(5) *
Jeffrey Fuller...................... 46,667(6) *
Leslie Bernhard..................... 46,667(7) *
Pablo F. Serna C. .................. 14,608(8) *
K. Tucker Andersen.................. 1,603,582(9) 13.92%
All directors & executive officers
as a group (6 persons)........... 1,858,539 16.14%

* Less than 1%

(1) The addresses of the persons named in this table are as follows:
Leonard A. Osser, Thomas R. Ronca, and Stuart Wildhorn are both at 220
South Orange Avenue, Livingston Corporate Park, Livingston, NJ 07039;
Leonard M. Schiller, Schiller, Klein & McElroy, P.C., 33 North Dearborn
Street, Suite 1030, Chicago, Illinois 60602; Jeffrey Fuller, Eagle
Chase, Woodbury, NY 11797; Leslie Bernhard, AdStar, Inc., 4553 Glencoe
Avenue, Suite 325, Marina del Rey, California 90292; K. Tucker Anderson,
c/o Cumberland Associates LLC, 1114 Avenue of the Americas, New York,
New York 10036.

(2) A person is deemed to be a beneficial owner of securities that can
be acquired by such person within 60 days from the filing of this annual
report upon the exercise of options and warrants or conversion of
convertible securities. Each beneficial owner's percentage ownership is
determined by assuming that options, warrants and convertible securities
that are held by such person (but not held by any other person) and that
are exercisable or convertible within 60 days from the filing of this
report have been exercised or converted. Except as otherwise indicated,
and subject to applicable community property and similar laws, each of
the persons named has sole voting and investment power with respect to
the shares shown as beneficially owned. All percentages are determined
based on the number of all shares, including those underlying options
exercisable within 60 days from the filing of this report held by the
named individual, divided by 11,517,146 outstanding shares on December
31, 2005 plus those shares underlying options exercisable within 60 days
from the filing of this report held by the named individual or the
group.

(3) Includes 325,722 shares issuable upon exercise of stock options
within 60 days of the date hereof as follows: 204,728 shares at $6.00
per share and 120,994 shares issuable upon the exercise of warrants
within 60 days of the date hereof, which are exercisable at $4.89.

(4) Includes 30,112 shares subject to stock options, exercisable within
60 days of the date hereof as follows: 16,667 shares at $7.50 per share,
2,333 shares at $2.25 per share, and 11,112 shares at $4.92 per share.

(5) Includes 46,667 shares subject to stock options, exercisable within
60 days of the date hereof as follows: 6,667 shares at $1.50 per share,
20,000 shares at $3.27 per share, and 20,000 shares at $1.40 per share.

(6) Includes 46,667 shares subject to stock options, exercisable within
60 days of the date hereof as follows: 6,667 shares at $1.50 per share,
20,000 shares at $3.27 per share, and 20,000 shares at $1.40 per share.

(7) Includes 46,667 shares subject to stock options, exercisable within
60 days of the date hereof as follows: 6,667 shares at $1.50 per share,
20,000 shares at $3.27 per share, and 20,000 shares at $1.40 per share.

(8) Includes 7,408 shares of common stock issued in payment of services
and 600 units, each consisting of ten shares of common stock and two
warrants to purchase one share of common stock for $4.89 issued to
Nohora Patricia Londono Gonzales, Mr. Serna C.'s wife.

(9) Includes 303,559 shares subject to warrants all of which are
exercisable within 60 days of the date hereof at prices ranging from
$4.89 to $6.00.

EXECUTIVE OFFICERS

The following table sets forth the names, ages and principal positions of the
executive officers of the Company and two non-officer key employee executives as
of March 31, 2006. Information regarding Mr. Osser is presented above.

Name Age Position
------------------- -------- ------------------------------------

Stuart J. Wildhorn 48 President

Rosaline Shau (1) 45 Chief Financial Officer

Thomas Ronca (2) 60 Chief Operating Officer

Mark Hochman, D.D.S. 48 Director of Clinical Affairs

Eugene Casagrande, D.D.S. 62 Director of Professional Relations

(1) Ms. Shau became Acting Chief Financial Officer on May 19, 2005. She
became Chief Financial Officer on August 15, 2005.
(2) Mr. Ronca was elected Chief Operating Officer on June 27, 2005.

The principal occupation and business experience for the last five
years for Messrs. Wildhorn, Ronca, Hochman and Casagrande, as well as Ms. Shau
are set forth below.

STUART J. WILDHORN has been President of the Company since September 2003 and
prior to that he had been Senior Vice President since April 2001. From 1990
until April 2001 Mr. Wildhorn held progressive senior management positions with
Datex-Ohmeda, a leading manufacturer of anesthesia and patient monitoring
devices.

ROSALINE SHAU has been our Chief Financial Officer since August 2005. Prior to
that, she had been our Assistant Controller since October 2004. From 2002 to
October 2004, Ms. Shau was a self-employed accounting and tax consultant for
businesses in various industries. Prior to 2002, Ms. Shau served as an assistant
controller of a chemical manufacturer for 5 years. Ms. Shau is a CPA and holds
an MBA degree in accounting from City University of New York, Baruch College.
Prior to joining Milestone, Ms. Shau had over 15 years of diversified accounting
and tax consulting experience.

THOMAS RONCA has been our Chief Operating Officer since May 2005. In 2004, Mr.
Ronca was a self-employed business consultant. From 1994 until 2003, Mr. Ronca
was a Senior Vice President and General Manager of the Medical Technology
Division of B. Braun Medical, Inc., a subsidiary of B. Braun Melsungen AG. From
1996 through 2000, he simultaneously served as President and Chief Operating
Officer of B. Braun Biotech, Inc., which provides fermenters, bioreactors and
laboratory equipment to over 200 customers in the pharmaceutical and
biotechnology industries.

MARK HOCHMAN has been a clinical consultant to Milestone since 1997 and has
served on a part-time basis as the Director of Clinical Affairs and Director of
Research and Development since 1999. He has a doctorate of dental surgery with
advanced training in the specialties of periodontics and orthodontics from New
York University College of Dentistry and has been practicing dentistry since
1984. He holds a faculty appointment as a clinical associate professor at NYU
School of Dental Surgery. Dr. Hochman is a recognized world authority on
advanced drug delivery systems, has published numerous articles in this area and
is personally responsible for inventing much of the technology currently made
available by Milestone.

EUGENE CASAGRANDE has been the Director of Professional Relations for Milestone
since September 1998. In his capacity, Dr. Casagrande represents Milestone in a
variety of clinical and industry related opportunities. Dr. Casagrande is the
President and founder of Casagrande Consulting Services, an entity devoted to
quality management in the dental industry.

COMPENSATION OF DIRECTORS AND OFFICERS
AND RELATED MATTERS

EXECUTIVE COMPENSATION.

The following Summary Compensation Table sets forth all compensation
earned, in all capacities, during the fiscal years ended December 31, 2005,
2004, and 2003 by (i) Milestone's Chief Executive Officer and (ii) the most
highly compensated executive officers, other than the CEO, who were serving as
executive officers at the end of the 2005 fiscal year and whose salary as
determined by Regulation S-B, Item 402, exceeded $100,000 (the individuals
falling within categories (i) and (ii) are collectively referred to as the
"Named Executives").

SUMMARY OF COMPENSATION TABLE

ANNUAL COMMON COMMON STOCK
COMPENSATION STOCK UNDERLYING
SALARY AWARD OPTIONS
NAME AND PRINCIPAL POSITION YEAR $ # #
--------------------------- ---- ------------ ------- ------------

Leonard A. Osser 2005 300,000 (1)
Chief Executive Officer 2004 300,000 (2)
and Chairman 2003 351,770 (3) 16,667
Thomas R. Ronca 2005 111,667 (4) 7,435
Chief Operation Officer
Stuart J. Wildhorn 2005 183,425
President 2004 180,740 9,091 (5) 16,667
2003 163,207

(1) Includes $150,000 in deferred compensation in accordance with his
employment agreement to be paid in common stock and not paid until the
termination of the agreement in 2010. Excludes $28,830 paid by Milestone
to Marilyn Elson, a certified public accountant, in payment of tax
services. Ms. Elson is the wife of Mr. Osser.

(2) Includes $150,000 in deferred compensation in accordance with his
employment agreement to be paid in common stock and not paid until the
termination of the agreement in 2010. Excludes $25,773 paid by Milestone
to Marilyn Elson, a certified public accountant, in payment of tax
services. Ms. Elson is the wife of Mr. Osser.

(3) Includes $320,000 in deferred compensation but excludes $51,928 paid
by Milestone to Marilyn Elson, a certified public accountant, in payment
of tax services and assistance with preparation of the recently
completed registration statement.

(4) Includes pro-rated $20,000 annual stock compensation.

(5) On December 16, 2004, the Board of Directors approved a grant of
9,091 shares of restricted stock to Mr. Wildhorn. The dollar value of
the grant reflected in the Summary Compensation Table is calculated by
multiplying the shares by $1.65, the closing price of Milestone stock on
the date of grant. Dividends are not paid on restricted stock. The value
of these shares was $12,635 on December 31, 2005 based on a closing
price of $1.39.

STOCK OPTIONS

The following tables show certain information with respect to incentive
and non-qualified stock options granted in 2005 to Named Executives under
Milestone's 2004 Stock Option Plan and the aggregate value at December 31, 2005
of such options. In general, the per share exercise price of all options is
equal to the fair market value of a share of Common Stock on the date of grant.

OPTION GRANTS IN 2005 INDIVIDUAL GRANTS OF OPTIONS

NUMBER OF PERCENT OF TOTAL
SHARES OF COMMON OPTIONS GRANTED
STOCK UNDERLYING TO EMPLOYEES EXERCISE PRICE EXPIRATION
NAME OPTIONS IN 2005 ($/SH) DATE
---- ------- ------- ------ -----

Mark Hochman................... 10,000 (1) 9% $1.25 12-20-2010
Rosaline Shau.................. 15,000 (1) 13% $1.25 12-20-2010

(1) Options vested immediately on the date of the grant.

AGGREGATED 2005 YEAR END OPTIONS VALUES
FOR OPTIONS GRANTED PRIOR TO AND DURING 2005

Number of Shares of
Common
Stock Underlying Value of Unexercised
Unexercised In-The-Money Options At
Options At 12-31-2005 12-31-2005 (1)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
---- ------------- -------------

Leonard A. Osser....................... 0 / 50,000 $0 / $14,500
Stuart J. Wildhorn..................... 24,556 / 11,111 $0 / $0
Rosaline Shau.......................... 15,000 / 0 $18,750 / $0

(1) Based on the closing price on December 31, 2005 of $1.39 as quoted on the
American Stock Exchange.

EMPLOYMENT CONTRACTS

In December 2003, Milestone entered into a new employment agreement
with Mr. Osser for a five-year term commencing January 1, 2004. Under the new
agreement Mr. Osser receives base compensation of $300,000 per year, payable one
half in cash and one half in common stock valued at the average closing price of
the common stock during the first 15 trading days in the month of December
during each year of the term. While the number of shares to be issued will be
determined each year, the stock will not be issuable until the end of the term
of the agreement. In addition, Mr. Osser may earn annual bonuses up to an
aggregate of $300,000, payable one half in cash and one half in common stock,
contingent upon Milestone achieving predetermined annual operating cash flow,
revenue and earnings targets. For 2005 he could have earned a $100,000 bonus
based upon Milestone achieving break-even cash flow from operations, a $100,000
bonus based upon Milestone achieving net revenues of $7,000,000 and a $100,000
bonus based upon Milestone achieving break-even earnings determined in
accordance with generally accepted accounting principles. The cash flow bonus
and the earnings bonus will not be payable to the extent that the payment
thereof will reduce operating cash flow or earnings below break-even,
respectively. For purposes of the agreement operating cash flow shall mean cash
flow from operations plus accounts receivable increases and less accounts
payable increases. Shares of common stock issued in partial payment of bonuses
will be valued at the average closing price of the common stock during the first
15 trading days in the month of December during each year of the term. The stock
portion of the bonus awards, if any, will be paid at the end of the term of the
agreement.

In addition, if during any year of the term of the agreement Mr. Osser
earns a bonus under the above formula, he shall also be granted 5-year stock
options to purchase twice the number of shares earned under the above formula,
each such option to be exercisable at a price per share equal to the fair market
value of a share on the date of grant (110% of fair market value if Mr. Osser is
a 10% or greater stockholder on the date of grant). The options shall vest and
become exercisable to the extent of one-third of the shares covered at the end
of each of the first three years following the date of grant, but shall only be
exercisable while Mr. Osser is employed by Milestone or within 30 days after the
termination of his employment.

COMPENSATION OF DIRECTORS

Milestone paid no cash or stock based compensation to the directors in
2005. On March 19, 2005, Milestone awarded, to each of its outside directors,
options expiring March 19, 2010 for the purchase of 20,000 shares of its common
stock, exercisable immediately at $3.27 per share, with respect to the year
beginning with Milestone's 2004 annual meeting and ending with Milestone's 2005
annual meeting. On November 17, 2005, Milestone granted 20,000 options,
exercisable immediately at $1.40 per share, expiring November 17, 2010, to each
of its outside directors with respect to the year beginning with Milestone's
2005 annual meeting and ending with Milestone's 2006 annual meeting.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires Milestone's officers and
directors, and persons who own more than ten percent (10%) of a registered class
of Milestone's equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors and greater than ten percent (10%) stockholders are required by SEC
regulations to furnish Milestone with copies of all Section 16(a) forms they
file.

To the best of Milestone's knowledge, based solely on review of the
copies of such forms furnished to Milestone, or written representations that no
other forms were required, Milestone believes that all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten percent
(10%) shareholders were complied with during 2005.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On October 9, 2003, we reached an agreement to satisfy $1,265,545 of
debt and accrued interest due to a major investor, K. Tucker Andersen, and
$435,985 of debt and accrued interest and $640,000 of deferred compensation due
to our Chief Executive Officer and Chairman, Leonard Osser. Of the total debt
and accrued interest due to Messrs. Andersen and Osser, and the deferred
compensation owed to Mr. Osser, $1,604,204 and $384,000 respectively were paid
February 24, 2004 through the issuance of 241,988 and 61,350 units valued at the
initial offering price. The remaining $97,326 of indebtedness to Messrs.
Andersen and Osser and $256,000 of deferred compensation to Mr. Osser was paid
in cash on February 23, 2004. The cash portion of the total payment represents
the estimated tax on the interest and compensation.

The technology underlying our SafetyWand, the CompuFlo and an
improvement to the controls for the CompuDent were developed by our Director of
Clinical Affairs and assigned to us. We purchased this technology pursuant to an
agreement dated January 1, 2005, for 43,424 shares of restricted common stock
and $145,000 in cash, payable on April 1, 2005. In addition, he will receive
additional deferred contingent payments of 2.5% of our total sales of products
using certain of these technologies, and 5% of our total sales of products using
certain other of these technologies. If products produced by third parties use
any of these technologies (under license from us) then he will receive the
corresponding percentage of the consideration received by us for such sale or
license.

On April 20, 2005, we issued 7,408 shares of common stock to Pablo F.
Serna C. in payment of services in the value of $20,000. Additionally, pursuant
to an agreement, dated June 21, 2005, we issued a cash placement fee of
$50,877.60 to Dynamic Decisions plus 600 units, each consisting of ten shares of
common stock and two warrants to purchase one share of common stock for $4.89,
expiring February 16, 2009. The shares of common stock and the warrants
comprising those units were then transferred to Nohora Patricia Londono
Gonzales, Mr. Serna C.'s wife.

We have adopted a policy that, in the future, the audit committee must
review all transactions with any officer, director or 5% shareholder.

AUDIT COMMITTEE REPORT

The Audit Committee is comprised of three non-management directors,
Leonard M. Schiller, Leslie Bernhard and Jeffrey Fuller, and operates pursuant
to its Charter. During the 2005 fiscal year, the Audit Committee held 4 meetings
with the independent auditors. The Audit Committee's purpose is to assist the
Board in its oversight of (i) the integrity of our financial statements, (ii)
our compliance with legal and regulatory requirements, (iii) our independent
auditors' qualifications and independence, and (iv) the performance of our
internal audit function and independent auditors to decide whether to appoint,
retain or terminate our independent auditors, and to pre-approve all audit,
audit-related and other services, if any, to be provided by the independent
auditors; and to prepare this Report. The Board has determined that each member
of the Audit Committee is "independent" within the meaning of the rules of both
the AMEX and the Securities and Exchange Commission ("SEC"). The Board has also
determined that each member is financially literate and at least one member of
the Audit Committee has accounting or related financial management expertise, as
such qualifications are defined under the rules of the AMEX, and that Mr.
Jeffrey Fuller is an "audit committee financial expert" within the meaning of
the rules of the SEC.

Management is responsible for the preparation, presentation and
integrity of our financial statements, accounting and financial reporting
principles and the establishment and effectiveness of internal controls and
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. The independent auditors are responsible for
performing an independent audit of the financial statements in accordance with
generally accepted auditing standards. The independent auditors have free access
to the Audit Committee to discuss any matters they deem appropriate.

In performing its oversight role, the Audit Committee has considered
and discussed the audited financial statements with management and the
independent auditors. The Audit Committee has also discussed with the
independent auditors the matters required to be discussed by the Statement on
Auditing Standards No. 61, Communication with Audit Committees, as currently in
effect. The Audit Committee has received the written disclosures and the letter
from the independent auditors required by Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees, as currently in effect,
and has discussed with the auditors the auditors' independence. All non-audit
services performed by the independent auditors must be specifically pre-approved
by the Audit Committee or a member thereof.

During 2005 fiscal year, the Audit Committee performed all of its
duties and responsibilities under the Charter. In addition, based on the reports
and discussions described in this Report, the Audit Committee recommended to the
Board that the audited financial statements of Milestone for the 2005 fiscal
year be included in its Annual Report on Form 10-KSB for such fiscal year.

SUBMITTED BY THE AUDIT COMMITTEE

Leonard M. Schiller
Leslie Bernhard
Jeffrey Fuller

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF DIRECTORS.

APPROVAL OF A PLAN TO ISSUE UP TO 300,000 SHARES OF MILESTONE
COMMON STOCK (ITEM 2 ON THE PROXY CARD)

Milestone is seeking stockholder approval of a Plan to issue up to
300,000 shares of Common Stock in lieu of cash compensation for services
performed by employees, officers, directors and consultants. The purpose of the
Plan is to offset equivalent reductions in cash compensation including bonuses.

The purpose of the Plan is to conserve cash while allowing Milestone to
adequately compensate existing employees, officers, directors and consultants,
or new employees, officers directors and consultants, whose performance will
contribute to our long-term success and growth. The availability of these shares
will also strengthen our ability to attract and retain employees, officers
directors and consultants of high competence, increase the identity of interests
of such people with those of our stockholders and help maintain loyalty to
Milestone through recognition and the opportunity for stock ownership.

All shares have been or will be issued at fair market value, or at a
premium to that value, at the time of Board approval. All the issuances do or
will bear a restrictive legend, were or will be acquired for investment by
Milestone's employees, officers and directors or by consultants who are
accredited investors, and were or will be issued without registration under the
Securities Act of 1933, as amended (the "Act"), pursuant to the exemptions
provided under sections 4(2) and 4(6) or Regulation D or will be registered
under the Act. Issuance of these shares will have a minimal dilutive effect.

The following table sets forth the dollar value of shares which we propose to
issue to existing officers and key employees in lieu of cash compensation
otherwise payable to them. The number of shares will be determined by the market
price of the shares at the time of issuance.

NEW PLAN BENEFITS
Plan Name
------------------
Name and Position Dollar Value ($)

Stuart J. Wildhorn, President 30,000
Rosaline Shau, Chief Financial Officer 30,000
Eugene Casagrande, Director of Professional Relations 30,000
Thomas Ronca, Chief Operating Officer 10,000

Though stockholder approval of the Plan is not required under Delaware
corporate law, the affirmative vote of a majority of shares of common stock
present or represented and entitled to vote at the 2006 Annual Meeting is
required as a condition for listing these shares on the AMEX. The Plan was
approved in March 2006 by our Board, subject to stockholder approval. The Plan
is set forth at Appendix A. If approved by our stockholders, the Plan will
become effective immediately.

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes the (i) options granted under the
Milestone 1997 and 2004 Stock Option Plans, and (ii) options and warrants
granted outside the Milestone 1997 and 2004 Stock Option Plans, as of December
31, 2005. The shares covered by outstanding options and warrants are subject to
adjustment for changes in capitalization stock splits, stock dividends and
similar events. No other equity compensation has been issued.

NUMBER OF
SECURITIES (1) TO NUMBER OF
BE ISSUED UPON WEIGHTED-AVERAGE SECURITIES(1)
EXERCISE OF EXERCISE PRICE REMAINING AVAILABLE
OUTSTANDING OF OUTSTANDING FOR FUTURE ISSUANCE
OPTIONS AND OPTIONS AND UNDER EQUITY
WARRANTS WARRANTS COMPENSATION PLAN
-------------------- ------------------ -----------------------

EQUITY COMPENSATION PLAN
APPROVED BY STOCKHOLDERS (1)
GRANTS UNDER OUR 1997 261,167 $3.59 52,833
STOCK OPTION PLAN
GRANTS UNDER OUR 2004 192,000 1.31 308,000
STOCK OPTION PLAN
EQUITY COMPENSATION NOT 365,332 3.46 NOT APPLICABLE
APPROVED BY STOCKHOLDERS (2)
AGGREGATE INDIVIDUAL 818,499 3.00
OPTION AND WARRANT
GRANTS

(1) Consisting of our 1997 stock option plan covering a total of 333,333
common shares underlying options issuable to officers and other key
employees and excluding 2,333 options, which were exercised in October
2003, 16,667 options, which were exercised in December 2003, and 333
options which were exercised in April 2005. The plan has a term of 10
years and is administered by a committee appointed by the board of
directors. The committee, in its sole discretion, determines who is
eligible to receive these incentive stock options, how many options they
will receive, the term of the options, the exercise price and other
conditions relating to the exercise of the options. Stock options
granted under the plan must be exercised within a maximum of 10 years
from the date of grant at an exercise price that is not less than the
fair market value of the common shares on the date of the grant. Options
granted to shareholders owning more than 10% of our outstanding common
shares must be exercised within five years from the date of grant and
the exercise price must be at least 110% of the fair market value of the
common shares on the date of the grant.

In July 2004 the Board of Directors approved the adoption of the 2004
Stock Option Plan. The 2004 Stock Option Plan provides for the grant of
options to purchase up to 500,000 shares of Milestone's common stock.
Options may be granted to employees, officers, directors and consultants
of Milestone for the purchase of common stock of Milestone at a price
not less than the fair market value of the common stock on the date of
the grant. In general, options become exercisable over a three-year
period from the grant date and expire five years after the date of
grant. However, options issued in 2005 under the 2004 Stock Option Plan
are vested immediately.

(2) The aggregate individual option grants outside the Stock Option
Plans referred to in the table above include options issued as payment
for services by outside consultants including agents in private
placements.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
APPROVAL OF A PLAN TO ISSUE UP TO 300,000 SHARES OF MILESTONE COMMON STOCK.

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR (ITEM 3 ON THE PROXY CARD)

Milestone is seeking stockholder ratification of the appointment of
Eisner LLP as its independent public accountants for 2006. Milestone engaged
Eisner LLP as its Independent Registered Public Accounting Firm on June 10,
2004, and Eisner LLP audited Milestone's financial statements for the fiscal
years ended December 31, 2004 and 2005. The reports of Eisner LLP with respect
to Milestone's financial statements appear in Milestone's Annual Reports for the
fiscal years ended December 31, 2004 and 2005.

In the event the stockholders fail to ratify the appointment of Eisner
LLP, the Audit Committee may reconsider its selection. Even if the selection is
ratified, the Audit Committee in its discretion may direct the appointment of a
different independent auditing firm at any time during the year if the Audit
Committee believes that such a change would be in our best interests and in the
best interests of our stockholders. A representative of Eisner LLP will attend
the 2006 Annual Meeting and will have an opportunity to make a statement if he
desires to do so and will be available to respond to appropriate questions from
stockholders.

J.H. Cohn LLP audited Milestone's financial statements for the years
ended December 31, 2003 and 2002. J.H. Cohn also reviewed Milestone's financial
statements for the first fiscal quarter of 2004. The reports of J.H. Cohn with
respect to Milestone's financial statements did not contain an adverse opinion
or disclaimer of opinion and were not modified as to uncertainty, audit scope or
accounting principles.

The decision to change accountants was approved by the Registrant's
Audit Committee and its Board as a whole. During 2003 and 2002, and during the
period from January 1, 2004 to June 10, 2004, when Milestone engaged Eisner LLP
as its Independent Registered Public Accounting Firm and dismissed J.H. Cohn
LLP, there were no disagreements with J.H. Cohn LLP on accounting principles or
practices, financial statement disclosure, or auditing scope or procedure which,
if not resolved to the satisfaction of J.H. Cohn LLP, would have caused J.H.
Cohn LLP to make reference to the subject matter of the disagreement in
connection with their report.

During the two most recent fiscal years and the subsequent interim
period preceding the engagement of Eisner LLP, neither the Registrant, nor
anyone on its behalf, has consulted Eisner LLP regarding: (i) the application of
accounting principles to a specific completed or proposed transaction, or the
type of audit opinion that might be rendered on the Registrant's financial
statements, which consultation resulted in the providing of a written report or
oral advice concerning the same to the Registrant that was an important factor
considered by the Registrant in reaching a decision as to the accounting,
auditing or financial reporting issue; or (ii) any matter that was either the
subject of a disagreement (as defined in Rule 304(a)(1)(iv) of Regulation S-B
promulgated under the Securities Act of 1933, as amended) or a reportable event
(as defined in Rule 304(a)(1)(v) of Regulation S-B).

AUDIT COMMITTEE MATTERS AND FEES PAID TO INDEPENDENT AUDITORS

Audit Fees

Audit fees for 2005 by Eisner LLP, Milestone's principal accountant
were approximately $210,000 covering the audit of our annual financial
statements and the review of our financial statements for the first three
quarters in 2005. Such fees for 2004 by Eisner LLP, Milestone's principal
accountant since June 10, 2004 were $148,400, covering the audit of our annual
financial statements for 2004 and review of our financial statements for the
second and third quarters of 2004. The aggregate fees billed by J. H. Cohn LLP,
Milestone's former auditor before June 10, 2004, were $101,209 and covered the
audit of our annual financial statements for 2003.

Audit-Related Fees

Audit related fees to our principal accountant, consisting of fees in
connection with S-3 filings and related services, totaled $28,500 for 2005 and
$5,850 for 2004. J. H. Cohn LLP billed Milestone $9,664 in connection with the
2005 S-3 filings. J. H. Cohn LLP billed Milestone $117,507 in connection with
the February 2004 offering.

Tax Fees

There were no fees for services related to tax compliance, tax advice
and tax planning billed by our principal accountants in 2004 and 2005.

All Other Fees

There were no other fees billed during 2005 and 2004 by Milestone's
principal accountant.

Audit Committee Administration of the Engagement

The engagement with Eisner LLP, Milestone's principal accountant, was
approved in advance by our Audit Committee. No non-audit services were approved
by the audit committee in 2005. The percentage of hours expended on audit by
persons other than the Milestone's principal accountant's full time, permanent
employees, did not exceed 50%.

AUDIT COMMITTEE PRE-APPROVED POLICIES AND PROCEDURES

The Audit Committee will pre-approve audit services and non-audit
services to be provided by the Company's independent auditors before the
accountant is engaged to render these services. The Audit Committee may consult
with management in the decision-making process, but may not delegate this
authority to management. The Audit Committee may delegate its authority to
pre-approve services to one or more committee members, provided that the
designees present the pre-approvals to the full committee at the next committee
meeting.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT AUDITOR.

OTHER BUSINESS

As of the date of this Proxy Statement, we know of no other business
that will be presented for consideration at the 2006 Annual Meeting other than
the items referred to above. If any other matter is properly brought before the
2006 Annual Meeting for action by stockholders, the persons designated as
proxies will vote all shares in accordance with the recommendation of the Board
or, in the absence of such a recommendation, in accordance with their best
judgment.

ADDITIONAL INFORMATION

HOUSEHOLDING

The SEC's rules permit companies and intermediaries such as brokers to
satisfy delivery requirements for proxy statements and annual reports with
respect to two or more stockholders sharing the same address by delivering a
single proxy statement and annual report addressed to those stockholders. This
process, which is commonly referred to as "householding," potentially provides
extra convenience for stockholders and cost savings for companies. Some brokers
household proxy materials and annual reports, delivering a single proxy
statement and annual report to multiple stockholders sharing an address,
although each stockholder will receive a separate proxy card. Once you have
received notice from your broker that they will be householding materials to
your address, householding will continue until you are notified otherwise or
until you revoke your consent. If at any time you no longer wish to participate
in householding and would prefer to receive a separate proxy statement and
annual report, please notify your broker. If you would like to receive a
separate copy of this year's Proxy Statement or Annual Report, please address
your request for delivery of the Proxy Statement and/or Annual Report to
Rosaline Shau, Chief Financial Officer, Milestone Scientific Inc., 220 South
Orange Avenue, Livingston Corporate Park, Livingston, New Jersey 07039.

REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS, NOMINATION
OF DIRECTORS AND OTHER BUSINESS OF STOCKHOLDERS

Stockholders interested in presenting a proposal for consideration at
the Annual Meeting of stockholders in 2006 must follow the procedures found in
Rule 14a-8 under the Exchange Act. To be eligible for inclusion in the Company's
2007 proxy materials, all qualified proposals must be received by our Corporate
Secretary no later than January 16, 2007. A stockholder who wishes to make a
proposal at the next Annual Meeting without including the proposal in our proxy
statement must notify us by March 1, 2007. If a stockholder fails to give notice
by this date, then the persons named as proxies in the proxies solicited by us
for the next Annual Meeting will have discretionary authority to vote on the
proposal. Stockholder proposals should be addressed to our Chief Financial
Officer, Milestone Scientific Inc., 220 South Orange Avenue, Livingston
Corporate Park, Livingston, New Jersey 07039.

EVERY STOCKHOLDER, WHETHER OR NOT HE OR SHE EXPECTS TO ATTEND THE ANNUAL MEETING
IN PERSON, IS URGED TO EXECUTE THE PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
BUSINESS REPLY ENVELOPE.

ANNUAL REPORT

The Company's Annual Report to Stockholders for the year ended December
31, 2005, including Audited Financial Statements, has been mailed with this
proxy material. The Financial Statements; Management's Discussion and Analysis
of Financial Condition and Results of Operations; and, Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure contained
therein are incorporated by reference and are deemed part of this soliciting
material. Notwithstanding the foregoing, other portions of the Annual Report to
stockholders are not part of the Company's proxy solicitation materials.

WE WILL PROVIDE WITHOUT CHARGE TO EACH PERSON BEING SOLICITED BY THIS
PROXY STATEMENT, ON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF OUR ANNUAL
REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2005 INCLUDING THE
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES INCLUDED THEREIN. All
such requests should be directed to Rosaline Shau, Chief Financial Officer,
Milestone Scientific Inc., 220 South Orange Avenue, Livingston Corporate Park,
Livingston, New Jersey 07039.

BY ORDER OF THE BOARD OF DIRECTORS

Leonard Osser
Chairman of the Board
Livingston, New Jersey
May 15, 2006

APPENDIX A

MILESTONE SCIENTIFIC INC.
COMPENSATION PLAN

1. PURPOSES. The purposes of this Compensation Plan are to retain
qualified personnel for positions of substantial responsibility, to provide
additional incentive to the Employees of the Company or its Subsidiaries, if any
(as defined in Section 2 below), and to promote the success of the Company's
business.

2. DEFINITIONS. As used herein, the following definitions shall apply:

(a) "BOARD" shall mean the Board of Directors of the Company

(b) "COMMON STOCK" shall mean the Common Stock of the Company (par
value $.001 per share.)

(d) "EMPLOYEE" shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of
the Company. The payment of a director's fee by the Company shall
not be sufficient to constitute "employment" by the Company.

(e) "Exchange ACT" shall mean the Securities Exchange Act of 1934,
as amended.

(f) "PARENT" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 425(e) of the Internal
Revenue Code of 1986, as amended.

(g) "Securities Act" shall mean the Securities Act of 1933, as
amended. "SEC" shall mean the Securities and Exchange Commission,

(h) "SHARE" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.

(i) "SUBSIDIARY" shall mean a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 425(f) of the
Internal Revenue Code of 1986, as amended.

3. STOCK. The maximum aggregate number of Shares which may be issued
under the Plan is 300,000 Shares of Common Stock.

4. ELIGIBILITY. All the issuances were or will be acquired for
investment by Milestone's officers, directors and employees or by individual
consultants who are accredited investors.

5. TERM OF THE PLAN. The Plan shall become effective upon its approval
by majority vote of the Company's Common Stock. The Plan shall continue in
effect until the approval by majority vote of the Company's Common Stock unless
sooner terminated under Section 6 of the Plan.

6. AMENDMENT AND TERMINATION OF THE PLAN.

(A) GENERAL. The Board may amend or terminate the Plan from time to
time in such respects as the Board may deem advisable; provided,
however, that the following revisions or amendments shall
require approval of the holders of a majority of the outstanding
Shares of the Company entitled to vote:

(i) any increase in the number of Shares subject to the Plan;

(ii) any change in the designation of the class of persons
eligible to be granted Shares; or

(iii) any material increase in the benefits accruing to
participants under the Plan.

(B) STOCKHOLDER APPROVAL. If any amendment requiring stockholder
approval under paragraph (a) is made, such stockholder approval
shall be solicited as described in Section 9 of the Plan.

7. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
unless the issuance and delivery of such Shares pursuant thereto shall comply
with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

8. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. Inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

9. STOCKHOLDER APPROVAL. Continuation of the Plan shall be subject to
approval by the stockholders of the Company within twelve months before or after
the date the Plan is adopted. If such stockholder approval is obtained at a duly
held stockholders' meeting, it may be obtained by the affirmative vote of the
holders of a majority of the shares present or represented and entitled to vote
thereon. The approval of such stockholders of the Company shall be (1) solicited
substantially in accordance with Section 14(a) of the Exchange Act and the rules
and regulations promulgated thereunder, or (2) solicited after the Company has
furnished in writing to the holders entitled to vote substantially the same
information concerning the Plan as that which would be required by the rules and
regulations in effect under Section 14(a) of the Exchange Act at the time such
information is furnished.

If such stockholder approval is obtained by written consent in the
absence of a stockholders' meeting, it must be obtained by the written consent
of all stockholders of the Company who would have been entitled to cast the
minimum number of votes which would be necessary to authorize such action at a
meeting at which all stockholders entitled to vote thereon were present and
voting.
10. INDEMNIFICATION OF BOARD. In addition to such other rights of
indemnification as they may have as directors or as members of the Board, the
members of the Board shall be indemnified by the Company against the reasonable
expenses, including attorneys' fees actually and necessarily incurred in
connection with the defense of any action suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan or
any Option granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such action, suit or proceeding that such Board
member is liable for negligence or misconduct in the performance of his duties,
provided that within sixty (60) days after institution of any such action, suit
or proceeding a Board member shall, in writing, offer the Company the
opportunity, as its own expense, to handle and defend the same.

20. OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect
any other stock option or incentive or other compensation plans in effect for
the Company or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation for employees
and directors of the Company or any Subsidiary.

21. COMPLIANCE WITH EXCHANGE ACT RULE 16b-3. With respect to persons
subject to Section 16 of the Exchange Act, transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of the Plan or
action by the Board fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Board.

22. SINGULAR, PLURAL; GENDER. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.

23. HEADINGS, ETC., NO PART OF PLAN. Headings of Articles and Sections
hereof are inserted for convenience and reference; they constitute no part of
the Plan.

MILESTONE SCIENTIFIC INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING ON JUNE 20, 2006.

The undersigned hereby appoints Leonard Osser and Rosaline Shau, and each of
them, with full power of substitution, the attorneys and proxies of the
undersigned to attend the Annual Meeting of Stockholders of Milestone Scientific
Inc. (the "Company") to be held on June 20, 2006, at 10:00 a.m., local time, at
The American Stock Exchange, 86 Trinity Place, New York, NY and at any
adjournment thereof, hereby revoking any proxies heretofore given, to vote all
shares of common stock of the Company held or owned by the undersigned as
indicated on the proposals as more fully set forth in the Proxy Statement, and
in their discretion upon such other matters as may come before the meeting.

Please mark "X" your votes as indicated:

1. ELECTION OF DIRECTORS--- Leonard Osser, Leonard M. Schiller, Jeffrey Fuller,
Leslie Bernhard and Pablo F. Serna C..

FOR election of all nominees |_|

WITHHOLD vote from all nominees |_|

FOR all nominees, |_|
EXCEPT for nominee(s) listed below from whom Vote is withheld.

2. Approval of Plan to issue up to 300,000 shares of Common Stock in lieu of
cash compensation for services performed by officers, employees and consultants.

FOR |_| AGAINST |_| ABSTAIN |_|

3. Confirmation of the appointment of Eisner LLP as Milestone's independent
auditors for the fiscal year ending December 31, 2006.

FOR |_| AGAINST |_| ABSTAIN |_|

(Continued, and to be signed, on Reverse Side)
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FOLD HERE

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THE SHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY SIGNED, WILL
BE VOTED AS DIRECTED OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR ALL
NOMINEES FOR DIRECTOR AND FOR EACH OF THE PROPOSALS.

The undersigned hereby acknowledges receipt of the Notice of, and Proxy
Statement for, the aforesaid Annual Meeting.

Dated:____________________________, 2006

__________________________________________
SIGNATURE OF STOCKHOLDER

NOTE: When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or guardian, please give full title
as such. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by
an authorized person.

IMPORTANT - PLEASE FILL IN, DATE, SIGN AND RETURN PROMPTLY USING THE
ENCLOSED ENVELOPE.