UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 20142017

or

For the transition period from to

Commission file number 001-14053

Milestone

Milestone Scientific Inc.

(Exact name of registrant as specified in its charter)

220 South Orange Avenue, Livingston, NJ 07039

(Address of principal executive offices)

Registrant’sRegistrant’s telephone number, including area codecode: 973-535-2717

Securities registered pursuant to Section 12(b) of the Act:None

Securities registered pursuant to section 12(g) of the Act: Common Stock, par value $.001 per share                   NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.¨    ☐ Yes    þ☑ No  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    ¨☐ Yes    þ☑ No  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    þ☑ Yes    ¨☐ No    No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    þ☑ Yes    ¨☐ No    No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K.    £☑

Indicate by checkcheck mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes ¨☐   No þ☑

As of June 30, 2014,2017, the last business day of Milestone’sthe registrants most recently completed second fiscal quarter, the aggregate market value of the common stock held by non –non- affiliates of the issuer was $40,263,722.$27,488,612. This amount is based on the closing price of $1.35$1.50 per share of Milestone’sthe registrant's common stock as of such date, as reported on the OTCQB.NYSE American.

As of March 31, 2015April 2, 2018, the registrant has a total of 21,371,16133,183,238 shares of Common Stock, $0.001 par value outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

MILESTONE SCIENTIFIC INC.

Form 10-K Annual Report

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

Certain statements made in this Annual Report on Form 10-K are “forward-looking“forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Milestone Scientific Inc. (“Milestone Scientific”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Milestone’sMilestone Scientific’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Milestone.Milestone Scientific. Although Milestone Scientific believes that its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate. In light ofConsidering the significant uncertainties inherent in the forward-looking statements included herein, particularly in view of Milestone’sMilestone Scientific’s early stage operations, the inclusion of such information should not be regarded as a representation by Milestone Scientific or any other person that the objectives and plans of Milestone Scientific will be achieved. Milestone Scientific undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

      Milestone Scientific is the owner of the following registered U.S. trademarks: CompuDent®; CompuMed®; CompuFlo®; DPS Dynamic Pressure Sensing Technology®; Milestone Scientific ®; the Milestone logo ®; Safety Wand®; STA Single Tooth Anesthesia System®; and The Wand ®.

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PART I

Item 1. Description of Business

All references in this report to “Milestone Scientific, Inc.,” “us,”, “our”, “we” or “Milestone Scientific” “our,” “we,” the “Company “or “Milestone” refer to Milestone Scientific Inc., and its consolidated subsidiaries, Wand Dental, Inc., Milestone ScientificAdvanced Cosmetic Inc. and subsidiaryMilestone Medical Inc. and affiliate, Milestone Education LLC, unless the context otherwise indicates. Milestone has rights toScientific is the owner of the following registered U.S. trademarks: CompuDent^®,; CompuMed^®,; CompuFlo^®, The Wand^®, The Wand Plus^®, The SafetyWand^®, ; DPS Dynamic Pressure Sensing Technologytechnology^®, ; Milestone Scientific^®; the Milestone logo^®; Safety Wand^®; STASingle Tooth Anesthesia System^™, (STA Instrument, instruments and handpieces), Ionic White^® (light emitting diode),; and The WandIonic White^™® (whitening toothpaste). Milestone was incorporated in the State of Delaware in 1989.

In July 2014 Milestone acquired all of the 750,000 outstanding shares of an inactive, previously established Florida corporation and changed its name to Wand Dental, Inc. (“Wand Dental”).  In September 2014, that corporation was merged into a Delaware Corporation, retaining the same name and capitalization. On July 1, 2014, Wand Dental was capitalized with cash and received the Milestone Scientific dental business and related dental assets including the exclusive license of Milestone Scientific’s, patents, trademarks, and technology for use in the dental marketplace. Wand Dental is consolidated into Milestone Scientific Inc.

BUSINESSItem 1. Business

Background

Overview

Milestone since its inception has engaged in pioneering proprietary,Scientific is a biomedical technology research and development company that patents, designs, develops and commercializes innovative computer-controlleddiagnostic and therapeutic injection technologies and solutionsdevices for the medical, dental, cosmetic and dental markets. Milestone hasveterinary applications. We have focused its energy andour resources on redefining the worldwide standard of care for injection techniques by making the experience more comfortable for the patient and by reducing the anxiety and stress of administeringreceiving injections forfrom the healthcare provider. Our computer-controlled injection systems make injections precise, efficient and virtually painless. Milestone’s proprietary DPS Dynamic Pressure Sensing technology^® is our technology platform that advances the development of next-generation devices, regulating flow rate and monitoring pressure from the tip of the needle, through platform extensions for local anesthesia for subcutaneous drug delivery, with specific applications for cosmetic botulinum toxin injections, epidural space identification in regional anesthesia procedures and intra-articular joint injections.

Milestone

Since our inception, we have engaged in pioneering proprietary, innovative, computer-controlled injection technologies and its technology are widely recognized by key opinion leaders, industry experts andsolutions for the medical and dental practitionersmarkets. We believe our technologies are proven and well established.

In 1997, Milestone Scientific released its first commercial product, the first computer-controlled local anesthesia delivery (C-CLAD) system, into the North American marketplace. This product was our proprietary, computer-controlled anesthetic delivery device, initially marketed as The Wand^®, a computer-controlled local anesthesia delivery (C-CLAD) device with a single-use disposable handpiece for the dental market, regulating and controlling the flow rate of anesthetics.  This device was later rebranded commercially as the noted leaderCompuDent^® System with the addition of several new features.

In 2001, Milestone Scientific was issued the initial United States Patent for CompuFlo^® technology, entitled “Pressure/Force Computer Controlled Drug Delivery Instrument with Exit Pressure,” allowing the device to continuously monitor and control the exit pressure of medication and/or fluid during an injection. We call this innovation DPS Dynamic Pressure Sensing technology. This same technology also enables doctors to accurately identify different tissue types based on detecting exit pressure during an injection. Later in 2004, the United States Patent Office issued a “Notice of Allowance” for patent protection on two additional critical elements of our CompuFlo technology: “Drug Delivery Instrument with Profiles” and “Pressure/Force Computer Controlled Drug Delivery with Automated Charging”.

Given our experience and established brand awareness within the dental industry, we elected to focus our initial product development efforts on the integration of CompuFlo’s DPS Dynamic Pressure Sensing technology into our legacy dental injection system.  In 2006, the FDA cleared the first system utilizing CompuFlo'sDPS Dynamic Pressure Sensing technology— the STA (Single Tooth Anesthesia) System and handpiece for use in the emerging, highdental market, providing continuous real-time visual and audible pressure feedback from the tip of the needle while also precisely regulating the flow rate.  Because of combining the ability to regulate the flow rate and monitor pressure at the tip of the needle, Milestone Scientific developed the industry’s first solution for painlessly administering an intra-ligamnetary injection, i.e., “single-tooth anesthesia” which could be used as the only injection necessary for achieving dental anesthesia, foregoing the need to administer traditional injections such as a nerve branch block.  In addition to single-tooth anesthesia the STA System can effectively perform all the traditional injections that dentist’s routine gives but can provide them virtually pain free and with a numerous clinical advantage.  This device, which also utilizes a disposable handpiece, is currently marketed by Milestone Scientific as the Wand STA^® System. 

Milestone Scientific believes our dental devices have set a new standard of care for dental injections. Our dental devices have been used to administer tens of millions of injections worldwide. Each of our devices has a related single use disposable handpiece, leading to a continuing revenue stream following sale of the device. At present, we sell disposable handpieces unique to our legacy product (the Wand and CompuDent) to users who have not upgraded to our current dental product, the Wand STA System.

Building on the success of our proprietary, core technology platform for dental injections, and desiring to pursue other growth computer-controlled injection industry;opportunities, we have recently begun to expand the uses and remains intent on expanding the use and applicationapplications of itsour proprietary, patented technologies to achieve greater operational efficiencies, enhanced patient safety and therapeutic adherence, patient satisfaction, and improved quality of care withinacross a broad range of medical disciplines.specialties. In June 2017, we received FDA regulatory clearance to sell the CompuFlo Epidural Computer Controlled Anesthesia System in the United States for certain medical applications. We intend to continue to expand the uses and applications of our DPS Dynamic Pressure Sensing technology.

In 1997,

We believe that we and our technology solutions are widely recognized by key opinion leaders (i.e., academics, anesthesiologists and practicing dentists whose opinions are widely respected), industry experts and medical and dental practitioners as a leader in the emerging, computer-controlled injection industry.

Milestone Scientific remains focused on advancing efforts to achieve the following five primary objectives:

●         Establishing Milestone’s DPS Dynamic Pressure Sensing technology platform as the standard-of-care in painless and precise drug delivery, providing for the first introduced time objective visual and audible in-tissue pressure feedback, and continuing to expand platform applications;

●The Wand         Following obtaining successful FDA clearance of our first medical device in June 2017, Milestone Scientific is transitioning from a research and development organization to a commercially focused medical device company;

●         Commercializing our CompuFlo Epidural System, a transformative device for epidural anesthesia procedures;

●         Expanding the global footprint of our CompuFlo Epidural System by partnering with distribution companies worldwide; and

●         Continuing the commercial launch of our proprietary cosmetic injection device for delivery of botulinum toxin (such as Botox^® (CompuDent and Dysport^®instrument)).

Our dental devices are sold in the United States, Canada and in 53 other countries with FDA, CE and other clearances Since receiving FDA clearance in 2017 our epidural devices have had minimal sales in the United States and Europe.

DPS Dynamic Pressure Sensing Technology^®; Our Proprietary Core Technology Platform

Our first commercial product, our proprietary, computer-controlled anesthetic delivery device, initially marketed as The Wand later rebranded commercially as the CompuDent^® System, for the dental market, uses patented technology, including a single-use disposable Wand handpiece. CompuDent provideshandpiece, to control the flow rate of the anesthesia during the injection, allowing virtually painless injections for all routine dental treatments, including root canals, crowns, fillings and cleanings. Milestone’s Computer-Controlled Local Anesthetic Delivery (C-CLAD) instrument handpiece does not look or feel likeprocedures with optimal effectiveness. Over the years, the CompuDentSystem has been widely heralded as a syringe.  And, what’s more, it works better than a syringe, resulting in a more pleasant experience for the patient and practitioner.  

Milestone subsequently expanded its product offerings with the introductionrevolutionary device, considered one of the CompuMed^® advanced injection instrument, designed for usemajor advances in a wide range of applications withindentistry in the medical industry, including cosmetic surgery, hair restoration surgery, podiatry, colorectal surgery, nasal20th Century, and sinus surgery, dermatology and orthopedics, among others.  has been favorably evaluated in more than 50 peers reviewed or independent clinical research reports.

In 2007, Milestone received FDA 510(k) Pre-market clearance for marketing and sale of the STA instruments, (dental instrument). Milestone introduced the instrument to the market in February 2007 and this instrument is currently being marketed throughout the world.

Central to Milestone’sOur next significant intellectual property platform and current productadvancement was a quantum improvement over our CompuDent^® System – the development strategy is its patented of our proprietary CompuFlo^® Computer-Controlled Drug Delivery System with DPS Dynamic Pressure Sensing technology, for the precise delivery of medicaments.    The CompuFlo pressure/force Computer-Controlled Local Anesthetic Delivery (C-CLAD) technology is an advanced patented and FDA-approved medical technology for the painless and accurate delivery of drugs, anesthetics and other medicaments into all tissue types, as well as for the aspiration of bodily fluids or previously injected substances. Its regulation and control of the flow rate continues to provide the CompuDent and CompuMed benefits of painless injections,delivery benefits, while its Dynamic Pressure Sensing^®innovative dynamic pressure sensing capability provides visual and audible in-tissue pressure feedback, identifying tissue types to the healthcare provider. This pressure feedback extends the benefit of painlessness from anesthetics with known viscosities to a wide range of liquid drugs and other medicaments with varying viscosities and flow rates. Such pressure feedback, part of our DPSDynamic Pressure Sensing technology, also allows the healthcare provider to know when certain types of tissues have been penetrated and permits the healthcare provider to inject medicaments precisely at the desired location. Thus, real-time continuous pressure feedback can prevent the suffusion ofinjection to tissue outside the intended target area, a vitallyan important characteristic in the injection of chemotherapeutics and other toxic substances.

The CompuFlo technology consists of two critical elements.  One element is

In addition to the ability to determine exit pressure In SituIn-Situ (in the injectioninjection site tissue) at the tip of the needle, in real time.  This minimizesminimizing tissue damage (and eliminateseliminating the pain of the injection) because the flow rate and pressure of the injection are controlled.  The other critical element of the technology is an integrated injection database of algorithms that have been definedprecisely controlled, CompuFlo^® computer-controlled Drug Delivery Systems features a proprietary algorithm, which allow for the measurement of the exit pressure. This database ofThese algorithms containscontain the critical components of specific drugs, parameters of needles, tubing and syringes and all other pertinent components for the safe and efficacious delivery of medications for all procedures.

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The CompuFloCompuFlo^® technology also consistsenables devices to provide a digital record of the time and volume of anesthetic or medicament injected.

Each CompuFlo^® System also includes a disposable injection handpiece that providesis extremely comfortable, light and easy to use, providing for precise tactile control during the injection, an electromechanical (computer-controlled) fluid delivery instrument and the ability to record data from the injection event. The pencil grip used with the handpieces provides the practitioner with enhanced tactile sense and accurate control and allows bi-directional rotation, eliminating needle deflection, resulting in a greater accuracy and success. The handpiece is vibration-free because it does not have a motor or electrical component in it and, since the handpiece does not look like a typical syringe, we believe it also reduces patient anxiety and offers the possibility of curing dental phobia of which an estimated 40 million Americans suffer.

As confirmed by numerous noted medical and dental experts within academia and the clinical practice arenas, CompuFlo hasSystems using DPS Dynamic Pressure Sensing technology have the potential to greatly increase the safety and efficacy of many drug delivery procedures that currently rely upon the over 150-year-old hypodermic syringe technology and the tactile senses and delivery expertise of the administrator.

On September 14, 2004, Milestone Scientific was issued United States Patent No. 6,786,885 for the

Devices using CompuFloDPS Dynamic Pressure Sensing technology entitled “Pressure/Force Computer Controlled Drug Delivery Instrument with Exit Pressure.” Proprietary software, working with an innovative technology, allows the instrument to continuously monitor and control the exit pressure of fluid and/or medication during an injection. This same technology also enables doctors to accurately identify different tissue types based on exit pressure during an injection. The technology has numerous applications in both medicine and dentistry, including epidural and intra-articular injections.

In December 2004, the United States Patent Office issued a “Notice of Allowance” for patent protection on two additional critical elements of the CompuFlo automated drug delivery technology: “Drug Delivery Instrument with Profiles” and “Pressure/Force Computer Controlled Drug Delivery with Automated Charging”.

In December 2005, Milestone submitted a pre-market notification to the U.S. Food and Drug Administration (FDA) on its CompuFlo technology, which was subsequently cleared by the FDA in July of 2006. This initial submission was critical for Milestone’s continuing efforts to develop and commercialize this important technology. Milestone has identified a number of potential applications for CompuFlo, including single-tooth dental injections, self-administered drug delivery, osteoarthritis joint pain management and epidurals.  

Given Milestone’s experience and established brand awareness within the dental industry, it elected to focus its initial product development efforts on the integration of CompuFlo into its legacy computer-controlled dental injection instrument.  As a result, Milestone developed the industry’s first solution for painlessly administering a single-tooth injectionsuch as the only injection necessary for achieving anesthesia, foregoing the need to administer a traditional nerve branch block.  This new instrument, which also provides for use of a disposable handpiece, was trademarked the “STA Single Tooth Anesthesia Instrument^™,” now more commonly known as the Wand STA Instrument.  

After receiving FDA 510(k) Pre-market Notification acceptance for the marketing and sale of the STA Instrument, Milestone introduced the instrument to market in February 2007 at the Chicago Dental Society’s 143^rd Midwinter Meeting.  The patented STA Instrument incorporates the "pressure feedback" elements of Milestone's patented CompuFlo technology, thereby allowing dentists to administer injections accurately and painlessly into the periodontal ligament space, effectively anesthetizing a single tooth. This injection is of significant value in that it allows the dentist to profoundly anesthetize the tooth within one or two minutes, versus up to 15-18 minutes for a block injection to take effect. Utilizing the STA Instrument single tooth injection, the patient will suffer neither pain nor collateral anesthesia in the cheek, lips or tongue at any time. The STA Instrument is capable of performing all of the injections that can be done with a conventional dental syringe, including the palatal-anterior superior alveolar, anterior middle superior alveolar and inferior alveolar nerve block.  The STA Instrument achieves these injections predictably and reliably.

Initial market response to the STA Instrument following its commercial debut in February 2007 proved to be less than robust.  Moreover, at that time, Milestone had granted exclusive U.S. and Canadian distribution and marketing rights for the STA Instrument to Henry Schein, Inc., the largest distributor of healthcare products and services to office-based practitioners in the combined North American and European markets.  Following several months of lackluster sales and after making critical senior management changes, Milestone initiated an in-depth market study to reassess its positioning and marketing strategies for the STA Instrument.  The insight gained from this study led management to redefine and implement a new messaging platform, created to emphasize key benefits that Milestone discovered are of most value to dental professionals.  This new product messaging was launched in January 2008 and has remained in constant review.

In the spring of 2009, Milestone signed an Exclusive Distribution and Marketing Agreement with China National Medicines Corporation, dba Sinopharm, which is China’s largest domestic manufacturer, distributor and marketer of pharmaceuticals and importer of medical devices and the country’s largest domestic distributor of dental anesthetic carpules to the Chinese dental industry.   Prior to the end of 2009, China National Medicines issued Milestone a blanket purchase order for 12,000 STA instruments and related handpieces to be delivered over 36 months, thereby marking Milestone’s initial penetration into China’s emerging dental market.  The agreement was terminated in September 2014 and a new distributor, Milestone China Inc. owned forty (40) percent by Milestone Scientific Inc. became the distributor for the STA Instruments and handpieces in China.

In early October 2012, the State Food and Drug Administration (SFDA) of the People’s Republic of China approved Milestone’s Single Tooth Anesthesia System® (STA System). Unfortunately, the SFDA bifurcated approval of the STA Systems from the Wand® handpieces. CFDA, (previously the SFDA), approval of the Wand® handpieces was received in May 2014 and the distribution of these handpieces has begun in China

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According to a report published by the U.S. Department of Commerce, titled “China’s Emerging Markets: Opportunities in the Dental and Dental Lab Industry,” China’s dental market lags behind other healthcare services and has largely been neglected in the past.  In fact, CS Market Research reports that “of China’s 1.3 billion plus population, 50% of the adults and 70% of the children are estimated to have decayed tooth problems, and over 90% have periodontal disease.”  However, with increasing affluence of the Chinese population, as well as increasing attention towards personal care, demand for dental services has been growing.  Market research firm Freedonia agrees, noting that demand for dental products in China is expected to climb due primarily to escalating personal income levels and government programs promoting awareness of the benefits of good oral care.  

Shortly before the end of the second quarter of 2009, Milestone elected to refine its international marketing strategy to gain greater access to and penetration of the international dental markets.  The new sales strategy provides for increasing hands-on oversight and support of its existing international distribution network, while also attracting new distributors throughout Europe, Asia and South America.  

Beginning in the second and third quarter 2010, Milestone expanded its international and domestic sales force by hiring a Director of International Sales and Director of Domestic Sales. These additions have proven to be a valuable addition to our dental market business, as we expand our distribution in both markets.

In November 2012, Milestone signed an exclusive distributor and marketing agreement with a well-known US domestic manufacturer and distributor, for the sale and distribution of the STA instrument and handpieces in the United States and Canada. The marketing initiative will include participation in U.S. and Canadian dental shows, as well as pediatric dental shows; an active advertising initiative targeting major dental publications; and direct mailing campaigns to over 150,000 dentists across the U.S. and Canada.

In August 2013, Milestone appointed Henry Schein as its exclusive distributor in the USA and Canada for the CompuDent handpieces.

In May of 2014, Milestone completed a private placement, which raised gross proceeds in the total of $10 million, for the sale of $3 million in common stock (2 million shares at $1.50 per share) and $7 million in Series A Convertible Preferred Stock, convertible into common stock at $2.545 per share on May 14, 2019, or $1.50 per share unless certain conditions are not met both subject to anti-dilution adjustment .

CompuFlo^® Advanced Injection Technology – Core Technology

The CompuFlo technology is patented and embedded in the STA Instrument that is being sold worldwide in the dental market.  CompuFlo technology has been tried and proven in human and animal studies, as well as by dentists in most parts of the world who are using the STA Instrument in their practices.  

CompuFlo is a revolutionary new technology for injections. CompuFlo enables health care practitioners to monitor and precisely control “pressure,” “rate” and “volume” during all injections and System can be used to inject alla wide variety of liquid medicaments as well as anesthetics. We believe our CompuFlo can also be used to aspirate body fluids.

Negative System avoids the negative side effects from the use of traditional hypodermic drug delivery injection instrumentsdevices, which are well documented in dental and medical literature and include risk of death, transient or permanent paralysis, pain, tissue damage and post-operative complications. The painPain and tissue damage are a directoften result offrom uncontrolled flow rates and pressures that arepressure created during the administration of drug solutions into human tissue. While several technologies have been capable of controllingcan control the flow rate, we believe our patented DPS Dynamic Pressure Sensing technology and CompuFlo Systems provide the ability to accurately and precisely control the pressure of the injection as well.

We believe our DPS Dynamic Pressure Sensing technology and CompuFlo Systems provides the following benefits:

●         minimizes the pain associated with injections, resulting in a more comfortable injection experience for the patient;

●         provides visual and audible in-tissue pressure feedback, identifying the desired target location to the healthcare provider, extending the benefit of painlessness from anesthetics with known viscosities to a wide range of liquid drugs and other medicaments with varying viscosities and flow rates;

●         allows the healthcare provider to know when the target location is present and permits the healthcare provider to inject medicaments precisely at the desired location;

●         provides a digital record of the time and volume of anesthetic or medicament injected;

●         minimizes tissue damage because the flow rate and pressure of the injection are controlled;

●         provides an integrated injection database of algorithms that have been defined which allow for the measurement of the exit pressure, containing the critical components of specific drugs, parameters of needles, tubing and syringes and all other pertinent components for the safe and efficacious delivery of medications;

●         the pencil grip used with the handpieces allows significant tactile sense and accurate control;

●         new injections made possible with the technology eliminate collateral numbness;

●         bi-directional rotation of the handpieces eliminates needle deflection resulting in greater success and more rapid onset of anesthesia in injections;

●         the use of a single patient use, disposable handpieces minimize the risk of cross contamination; and

Our first system utilizing a DPS Dynamic Pressure Sensing technology platform was our STA System and related handpiece for the dental market, currently marketed as the Wand STA System. Another platform extension of our DPS Dynamic Pressure Sensing technology^® platform is the CompuFlo Epidural System. In addition, we have developed platform extensions of our DPS Dynamic Pressure Sensing technology platform for intra-articular (for administering corticosteroids, hyaluronic acid and other medicaments into both major and minor joints for the alleviation of pain associated with arthritis and other deleterious joint conditions), cosmetic and veterinary applications. We intend to continue to develop and commercialize new applications of our DPS Dynamic Pressure Sensing Technology Platform as commercial line extensions.

CompuFlo Epidural Computer Controlled Anesthesia System

In June 2017, we received FDA regulatory clearance to sell the CompuFlo Epidural Computer Controlled Anesthesia System in the United States for certain medical applications. The CompuFlo Epidural Computer Controlled Anesthesia System obtained CE mark approval in September 2014, allowing it to be marketed and sold in most European countries and many other countries accepting CE approved devices. Because of receiving such FDA clearance, we are transitioning from a research and development organization to a commercially focused medical device company and beginning to commercialize our DPS Dynamic Pressure Sensing technology platform and related devices for medical applications.

The CompuFlo Epidural Computer Controlled Anesthesia System is one such platform extension of our DPS Dynamic Pressure Sensing technology platform, providing anesthesiologists and other healthcare providers the ability, for the first time, to quantitatively determine and document the pressure at the needle tip in real-time for proper needle placement in epidural procedures used for labor/delivery and back pain management. Our proprietary DPS Dynamic Pressure Sensing technology allows the CompuFlo Epidural Computer Controlled Anesthesia System to provide objective visual and audible in-tissue pressure feedback that allows anesthesiologists to identify and confirm placement in the epidural space.

Our CompuFloEpidural Computer Controlled Anesthesia System provides an objective tool that we believe consistently and accurately identifies the epidural space by detecting the difference in pressure between the ligamentum flavum and the intrafilamentary tissue. In studies, the CompuFlo Epidural Systemwith DPS Dynamic Pressure Sensing technology has been unobtainable untilshown to be effective in correctly identifying the developmentepidural space. Knowing the precise location of CompuFlo.  a needle tip during an epidural injection procedure provides a measure of safety not presently available to doctors using conventional syringes. In the absence of fluoroscopy, identifying the epidural space by relying on the subjective perception of loss of resistance to saline requires a very long education period and learning curve and could result in morbidity and lack of efficacy. During back pain management epidural procedures, where fluoroscopy is commonly used, the CompuFlo Epidural Computer Controlled Anesthesia System allows the clinician to locate the epidural space, without using fluoroscopy, thereby protecting the patient and clinician from unnecessary exposure to radiation along with significantly reducing capital and operating costs.

Precisely controlling

An abstract presented at the 45th Chilean Congress of Anesthesiology on November 11, 2017, entitled: Utilization of Dynamic Pressure Sensing™ in Epidural Procedures for Child Birth and representing the first formal presentation of our CompuFlo Epidural Computer Controlled Anesthesia System device in South America, summarized the results of a recent independent, investigator-led clinical study evaluating the use of Milestone’s CompuFlo Epidural device in 50 labor and delivery patients, concluding that the epidural space was correctly identified in 100% of the patients. In addition, the epidural space was located on the first attempt with all the patients. There were no cases of accidental puncture of the dura, a common risk factor for traditional epidural procedures using the loss of resistance technique. We believe that this represents a significant benefit for the payors, physicians, and most importantly, the patients.

In July 2017, Milestone Scientific acquired certain patent rights and other intellectual property rights related to the computer-controlled injection device of APAD Octrooi B.V. and APAD B.V. This patent portfolio solidifies our patent rights for computer-controlled local anesthetic delivery (C-CLAD) technology and expands our proprietary rights and provides low cost and simple instrument to deliver epidural injections.

CompuFlo Intra-Articular Computer Controlled Injection System

Another platform extension utilizing our DPS Dynamic Pressure Sensing technology platform and CompuFlo System are our devices for administering corticosteroids and other medicaments into both major and minor joints for the alleviation of pain associated with arthritis and other deleterious joint conditions. As features of our DPS Dynamic Pressure Sensing technology, this device also precisely controls in-tissue pressure, increasesincreasing patient safety by reducing the risk of tissue damage and post-treatment pain related to excessive pressure that may occur during certain injections. Identification of the tissue, in which the needle tip is imbedded, is believed to be highly important in epidural injections, intra-articular injections and numerous organ, subcutaneous and intramuscular injections.

CompuFlo’s pressure sensing technology provides an objective tool that consistently and accurately identifies the epidural space by detecting the difference in pressure between the ligamentum flavum and the extraligamentary tissue. In studies utilizing the CompuFlo technology the epidural space has been correctly identified 100% of the time.  Knowing the precise location of a needle during an epidural injection procedure provides a measure of safety not presently available to doctors using conventional syringes, who identify the epidural space by relying on the subjective perception of loss of resistance to saline.

In the absence of curative procedures,

We believe our intra-articular injection device is particularly efficacious for arthritis patients who are obliged to endure multiple painful injections annually for a lifetime. Often these injections are not efficacious because the doctor using a syringe failedfails to locate the intra-articular space or diddoes not inject the appropriate volume of hyaluronic acidcorticosteroids or other medicament into that space. The Our CompuFloCompuFlo ^Systemtechnology has been

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shown successful in an independent animal study in administering viscous hyaluronic acid and other medicaments into thea certain intra-articular space in both small and large joints using its computer-controlled pressure sensing capabilitiescapabilities.

The intra-articular device has obtained CE mark clearance and may be marketed and sold in an independent animal study.most European countries and many other countries accepting CE approved devices. In December 2016, we received notification from the FDA that our 510(k) applications for marketing approval of the intra-articular device did not demonstrate that the device was as safe and effective as legally marketed devices. We intend to submit a new 510(k) application that we believe will demonstrate substantial equivalency; however, we can provide no assurances of when, if ever, we will receive FDA clearance for our intra-articular device.

There are a number of injectable drugs routinely self-administered in a home or office setting using spring loaded automatic injection devices by people who suffer from long term chronic conditions such as Multiple Sclerosis diseases of the auto immune system and Rheumatoid Arthritis.  The CompuFlo technology, using pressure sensing capabilities, can serve as a painless subcutaneous injection method for these self-administered drugs.  A significant reduction in pain during delivery should have a positive impact on compliance, which is a major consideration when physicians are treating patients.Cosmetic Botulinum Injection Device

Medical Instrument for Joint Venture

In July 2011, Milestone entered intoThe American Society of Plastic Surgeons (ASPS) reported that among the 14.2 million cosmetic minimally-invasive procedures performed in 2015, the top performed procedure, at 6.7 million procedures, was Botulinum Toxin Type A (commonly known as Botox) injection. Leveraging our experience in minimizing the pain of dental anesthetic injections, we established a joint venture agreement with Beijing 3H (Heart-Help-Health) Scientific Technology Co., Ltd. (Beijing 3H)in 2014 to develop and commercialize a device for the development, commercialization, manufacturepain free injection of botulinum toxin. The joint venture entity, Milestone Advanced Cosmetic Systems, Inc., is owned 50% by us and marketing50% by Milestone China Company Limited (“Milestone China”), a company organized under the laws of Hong Kong and then owned 40% by Milestone Scientific, but as to which Milestone Scientific now only has an epiduraloption to purchase up to 40% of Milestone China (as more particularly described below under Distribution and intra-articular injection instruments.Marketing Arrangements). Milestone held a 50% interest inChina contributed $900,000 of cash to the joint venture Milestone Medical Inc. (Milestone Medical), and shareholders of Beijing 3H, andwe have provided a group of individual investors including a large shareholder in Milestone who is also a principal of a supplier to Milestone, also held a 50% interest in the joint venture.

The joint venture provided for Milestone’s contribution of an exclusive worldwide royalty-free license to use its patents. Shareholders of Beijing 3H, and a group of individual investors contributed $1.5 millionutilize our technology to the joint venture to designdevelop a botulinum toxin injection device.

In November 2017, we announced plans for the commercial launch of our proprietary cosmetic injection device using our DPS Dynamic Pressure Sensing technology platform and develop twoour CompuFlo Cosmetic System for delivery of botulinum toxin. Our proprietary cosmetic injection device features improved needle placement with a comfortable stylus grip, precise dosing, the same technology platform that has made dental and epidural injections painless, and an intuitive touch-screen interface. Based on the positive outcomes of a series of multi-state human factor studies with targeted customers, we are moving towards the commercial instruments using Milestone’s CompuFlo® technologylaunch of our cosmetic device and disposables. Milestone will have distribution responsibilityapplying for marketing clearance in Europe (CE clearance), and United States (FDA clearance). Although the Company’s instrument has progressed beyond the development stage, additional equity financing is necessary to fund the commercialization of the instrument. To this end, the Company is currently in the U.S., Canada.process of pursuing additional financing. However, the Company and Milestone MedicalChina can provide no assurance that additional financing will distributebe consummated on acceptable terms, or at all

We believe that the touch screen and other platform improvements embodied by our cosmetic device will form the basis for our next generation of devices.

Veterinary Nerve Block Anesthesia Device

The effectiveness of our veterinary nerve block anesthesia device (existing medical device) for such use was confirmed by a pilot study and final report completed by Cornell University, College of Veterinary Medicine. Additional studies with other universities are in process with respect to horses and small animals. We are exploring commercialization opportunities.

The WandSTA System

In 2006, we received FDA clearance for our Wand STA System and disposable handpiece, the restfirst system utilizing CompuFlo’s DPS Dynamic Pressure Sensing technology, for use in the dental market. The Wand STA System and handpiece continue to provide all of the world, while Beijing 3H had rights to distribute products exclusively in the People’s Republic of China, Macao, Hong Kong and other regions of Asia. In September 2014, shareholders of Beijing 3H sold their shares in Milestone Medical (shares individually owned by two shareholders of Beijing 3H to other founding investors) and the distribution agreement with Beijing 3H for the medical instruments was terminated. Milestone Medical entered into an agreement with Milestone China Inc. (Hong Kong Company), forty (40) percent owned by Milestone Scientific to distribute both medical instruments in the People’s Republic of China, Macao, Hong Kong and other regions of Asia.

In the fourth quarter of 2013, Milestone Medical. sold 2 million shares of its common stock for $1.50 per share in a private placement transaction in Poland. As a resultbenefits of the sale, Milestone Medical received net proceeds of $2,363,000. The effect of this sale wasCompuDent System, allowing dentists to reduce Milestone’s ownership percentage from 50% to 45.5% (post transaction).

Inprovide virtually painless injections for all dental procedures, including routine fillings, as well as more sophisticated implants, root canals and crowns, while better facilitating single tooth anesthesia (now generally performed with a high pressure spring loaded gun-like device), but also incorporates the fourth quarter of 2014, Milestone purchased 995,000 shares from a founding shareholder"pressure feedback" elements of Milestone Medical for $447,750 ($0.45 per share). As a result, Milestone increased its aggregate ownership of Milestone Medical to 10,995,000 shares, or 49.9% of its issued and outstanding shares, as of December 31, 2014.

On December 31, 2014 Milestone entered into a line of credit with Milestone Medical, to provide up to $2 million of funding through April 15, 2016 for the further commercialization, and marketing of the two medical instruments. Interest will be charged at a rate of 3.25% per annum, the prime rate in the U.S. at the inception of the agreement.

Product Platform

Milestone has developed and brought to market a highly differentiated portfolio of industry innovations.  Thus far, Milestone’s proprietary solutions have succeeded in elevating the state of the art in the professional dental arena. The product portfolio includes:

STA Single Tooth Anesthesia Instrument^™ (Wand STA Instrument)

The STA Single Tooth Anesthesia Instrument™ (STA Instrument) is aScientific's patented computer-controlled local anesthesia delivery instrument that incorporates the “pressure feedback” elements of Milestone’s patented CompuFlo technology, System, thereby allowing dentists to administer injections accurately and painlessly into the periodontal ligament space, effectively anesthetizing a single tooth. WhileInjections made by the periodontal ligamentWand STA System eliminate collateral numbness of the tongue, lips and facial muscles and often hasten the onset of anesthesia by eliminating the need for mandibular blocks. The Wand STA also identifies intrafilamentary tissue, so dentists can find the precise location for single tooth anesthesia. This injection is of significant value in that it allows the dentist to profoundly anesthetize the tooth within one minute per root, versus up to 15-18 minutes for a block injection to take effect. The Wand STA System can perform all the injections that can be done with a conventional dental syringe, and in addition, we provide the ability to perform the following: the palatal-anterior superior alveolar, anterior middle superior alveolar and inferior alveolar nerve block. The Wand STA System achieves these injections predictably and reliably. To date, substantially all our revenue has been availablegenerated by the Wand STA System for some time, there has been no effective technology that allows dentists to easily perform the procedure painlessly, safely and predictably until now. With this unique procedure dentists can easily and predictably anesthetize a single tooth root in one minute as the primary and sole injection, as compared to a general blocking injection and waiting up to 18 minutes (or longer if the blocking injection needs to be re-administered) before proceeding to perform a procedure on the targeted tooth. An instrument which allows dentists to effectively anesthetize a single tooth will greatly enhance the productivity of dental practices and, when combined with the painless injection capabilities already present in the CompuDentapplications. instrument, such an instrument should provide a compelling value in the marketplace. The STA Instrument will generate recurring revenues from per-patient disposable handpieces.

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Since its market introductionintroduction in the spring of 2007, the Wand STA InstrumentSystem has received favorable reviews and awards from the dental industry. In July 2007, noted industry publication Dentistry Today featured the Wand STA InstrumentSystem as one of the “Top 100 Products in 2007,” helping to promote much broader recognition of the instrument and validating the Wand STA’sSystem’s value proposition for dentists and patients, alike. In early 2008, Medical Device & Diagnostic Industry magazine distinguished the Wand STA Instrument System as a 2008 Medical Design Excellence Award winner in the “Dental Instruments, Equipment and Supplies” product category. Of the 33 products to receive this coveted award, the Wand STASystem was one of only two winning products that serve dental practitioners. In December 2008, Milestone Scientific continued to win broad acclaim for the Wand STA InstrumentSystem by winning a “Townie Choice Award”Award”. The “Townie Choice” awards were originally started by Dr. Howard Darran and Farran Media, publisher of Dentaltown Magazine,, to assist dentists in making product purchasing decisions, and are considered the “people’s choice” of the products and services available to the dental industry today. That same month, the Wand STA InstrumentSystem was also named as a Dental Products Report “Top 100 2008 Product of Distinction.” Additionally, the Wand STA Instrument System was named one of Dentistry Today’s “Top 100 Products” for the third consecutive year in 2010.

CompuDent^®

CompuDent

Other Devices

At earlier stages of development are our products using (also knownCompuFlo’s DPS Dynamic Pressure Sensing technology for less painful injections for use in rhinoplasty, colorectal surgery, podiatry and other disciplines. In the self-injectable market, there are many injectable drugs routinely self-administered in a home or office setting using spring loaded automatic injection devices by people who suffer from long term chronic conditions such as the Wand Plus^® internationally) is Milestone’s proprietary, patented Computer-Controlled Local Anesthetic Delivery (C-CLAD) instrumentmultiple sclerosis, rheumatoid arthritis, and predecessorother diseases of the STA Instrument.  CompuDent delivers anesthesia at a precise and consistent rate below a patient’s pain threshold.  Over the years, CompuDent has been widely heraldedauto immune system. We believe CompuFlo’s DPS Dynamic Pressure Sensing technology, using pressure sensing capabilities, can serve as a revolutionary instrument, considered one of the major advances in dentistry in the 20^th Century. The instrument has been favorably evaluated in more than 50 peer reviewedpainless subcutaneous injection method for these self-administered drugs. However, there can be no assurance that we will be able to successfully develop any such products, or independent clinical research reports. CompuDent, including its ergonomically designed single-use handpieces (The Wand^®), provides numerous, well documented benefits:that if developed, that we will be able to obtain FDA approval to market any such products, or even if we do obtain such FDA approval, that any such products will generate any revenue for us or be a commercial success.

Despite CompuDent’s many benefits, including the administration of less painful

Distribution and more comfortable injections, dentistsMarketing Arrangements

Our dental devices are sold in the United States, have been slowCanada, and in over 53 countries abroad. In June 2017, we received FDA regulatory clearance to give upsell our first medical device, the use of traditional syringes. Dentists have all been trained to use syringes in dental school and often have become accustomed to and are comfortable with their use during many years of clinical practice, in spite of the obvious reluctance and/or fear of the patient in relation to injections administered by hypodermic syringe. There are approximately 40 million dental phobics, those people afraid to visit a dentist,CompuFlo Epidural Computer Controlled Anesthesia System in the United States. Therefore, Milestone believes there is a disconnectSince receiving FDA clearance in 2017 our epidural devices have had minimal sales in the way dentists perceive their patients’ attitudes toward injectionUnited States and Europe.

Dental Market

In the spring of 2009, Milestone Scientific signed a distribution and marketing agreement with China National Medicines Corporation, dba Sinopharm. In early October 2012, the State Food and Drug Administration (“CFDA”) of the People’s Republic of China approved the Wand STA System. However, the CFDA’s approval of the Wand STA handpieces was not received until May 2014 and the distribution of these handpieces in China began in the fourth quarter of 2014. The distribution and marketing agreement with Sinopharm was terminated in September 2014. Proximate to that time, we entered into a new agreement with Milestone China to be our distributor for the Wand STA System and handpieces in China. Milestone Scientific then owned, but now has an option to purchase, forty (40%) percent of Milestone China (the “Milestone China Shares”). In June 2017, Milestone Scientific sold its Milestone China Shares to an unaffiliated United States domiciled purchaser for a promissory note secured by hypodermic syringe. The CompuDent is used today by thousandsa pledge of dentists around the world, manyMilestone China Shares, and received a 10-year option to repurchase the Milestone China Shares at the same price as the purchase price paid for the Milestone China Shares within the first two years and at fair market value (as defined in such agreement) for the remainder of whom have long since abandoned the over 150-year old syringe.  10-year term.

CompuMed^®

CompuMed isAs of March 2, 2018, the promissory note was in default. If Milestone Scientific exercises its rights as a patented computer-controlled injection instrument gearedsecured party it may be obligated to return to the needspurchaser up to the $250,000 received for the Milestone China Shares as surplus. At this time Milestone Scientific has not received a response from the purchaser of the medicalMilestone China Shares, Milestone Scientific has not recorded any financial benefit from the sale of Milestone China Shares to date.

In November 2012, Milestone Scientific signed an exclusive distributor and marketing agreement with a well-known U.S. domestic manufacturer and distributor, for the sale and distribution of the Wand STA System and handpieces in the United States and Canada. The marketing initiative included participation in United States and Canadian dental shows, as well as pediatric dental shows; an active advertising initiative targeting major dental publications; and direct mailing campaigns to over 150,000 dentists across the United States and Canada. This exclusive distributor and marketing agreement was converted to a non-exclusive agreement as of December 31, 2016. 

Beginning January 1, 2016, Milestone Scientific entered into a non-exclusive distribution agreement with Henry Schein. In June 2016, that agreement was replaced by a new agreement with Henry Schein providing for an exclusive distribution arrangement for our dental products in the United States and Canada by a newly formed marketing and sales group at Henry Schein. Under this arrangement, we have a semi-dedicated independent sales force visiting dentists. Henry Schein’s exclusive products sales specialist team, which is comprised of 25 sales representatives and supported by over 1,000 field service representatives, will exclusively market and providing benefits similardistribute the Wand STA System and handpieces, together with a select group of other devices in the United States and Canada. Our agreement with Henry Schein has minimum purchase orders to maintain exclusivity in the third through tenth years. We believe that this exclusive arrangement will be more effective than previous arrangements relying on Wand Dental's appearances at dental shows and catalog sales.CompuDent. CompuMed

Medical Market

Having received FDA clearance to sell the allowsCompuFlo Epidural Computer Controlled Anesthesia System in June 2017, we are in discussions with a small number of regional and national distributors. Our immediate focus is on marketing our epidural device throughout Europe.

In February and March 2018 Milestone Scientific hired an Executive VP of Global Sales and Marketing and a Vice President of US Sales to fill a significant gap in our commercialization efforts of the CompuFlo Epidural System.

We have entered into a limited number of distributor arrangements in Europe and the Middle East for our CompuFlo Epidural Computer Controlled Anesthesia System. Our distribution strategy is initially aimed at having KOLs use and accept the device and initiate their own studies.

Veterinary Market

We are exploring various commercialization opportunities.

Patents and Intellectual Property

Milestone Scientific and its subsidiaries currently hold approximately 214 U.S. and foreign patents, and many medical procedures, now requiring intravenous sedation,patent applications. The Company’s patents and patent applications relate to be performeddrug delivery methodologies, drug flow rate measurement, pressure/force computer-controlled drug delivery with only local anesthesia due to dramatic pain reduction. Also, dosages of localexit pressure, dynamic pressure sensing, automated rate control, automated charging, drug profiles, audible and visual pressure/force feedback, tissue identification, drug delivery injection unit, drug drive unit for anesthetic, can often be significantly reduced, thus reducing side effects, accelerating recovery times, lowering costshandpiece and eliminating potential complications. CompuMed has accumulated clinical evidence demonstrating benefits from use in colorectal surgery; podiatry; dermatology,injection device. Milestone Scientific and its subsidiaries also currently hold approximately 29 registered U.S. and foreign trademarks, including surgery for the removal of basal cell carcinomas CompuDent^®, CompuFlo^®, DPS Dynamic Pressure Sensing technology^®, Safety Wand^®, STA Single Tooth Anesthesia System^®, and other oncological dermatologic procedures; nasal and sinus surgery, including rhinoplasty; hair transplantation and cosmetic surgery, among others. The CompuMed is being replaced by instruments that include CompuFlo technology geared to specific medical disciplines.

The Wand^®

Milestone Scientific relies on a combination of patent, copyright, trade secret, and trademark laws and employee and third party non-disclosure agreements to protect its intellectual property rights. Despite the precautions taken by Milestone Scientific to protect products, unauthorized parties may attempt to reverse engineer, copy, or obtain and use products and information that Milestone Scientific regards as proprietary, or may design products serving similar purposes that do not infringe on Milestone Scientific’s patents. Milestone Scientific’s failure to protect its proprietary information and the expenses of doing so could have a material adverse effect on our business, financial condition and results of operations.

If Milestone Scientific’s products infringe upon patent or proprietary rights of others, we may be required to modify processes or to obtain licenses. There can be no assurance that Milestone Scientific would be able to do so in a timely manner, upon acceptable terms and conditions, or at all. The Wand handpiece is used in conjunctionfailure to do so could have a material adverse effect on our business, financial condition and results of operations.

Manufacturing

Milestone Scientific has informal arrangements with the manufacturer of the Wand STA CompuDent and CompuMed instruments.  It is an ergonomically designed System, epidural and patentedintra-articular devices and with one of the principal manufacturers of the handpieces that enables all traditionalfor those items, respectively. Pursuant to these informal arrangements, our third-party manufacturers manufacture the Wand STA System under specific purchase orders without minimum purchase commitments, and newer injections, such as AMSA, P-ASA and Modified-PDL,at prices to be more comfortableagreed upon in each such purchase order.

Our agreement with the principal manufacturer of handpieces includes pricing terms. Milestone Scientific has been supplied by the manufacturer of the Wand STA System and easier to deliver. Moreover,its predecessor, the pen-like graspCompuDent System, since the commencement of production in 1998, and by the manufacturer of its handpieces since 2003. The Wand allows bi-directional rotation during injection, which prevents needle deflection that occurs with a traditional syringe. A straighter path results in a more accurate injection, meaning

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fewer missed mandibular blocks, and more rapid onsetmanufacturer of anesthesia. Missed blocks are reportedour handpieces is in the literature to occur 30%People’s Republic of China and the manufacturer of the time. This raises both patient anxietydevice is in the United States. Changes to pricing of the Wand STA System by the manufacturer could have a material adverse effect on our financial condition, business and difficultiesresults of operations. Termination of the manufacturing relationship with any of these third-party manufacturers could significantly and adversely affect our ability to produce and sell the products. Though other alternate sources of supply for handpieces exist, Milestone Scientific would need to recover its existing tools or have new tools produced to establish relationships with new suppliers. Establishing new manufacturing relationships could involve significant expense and delay. Any curtailment or interruptions of the dentists in managing their business. While awaiting profound anesthesia,supply, whether as a result or termination of the dentist is losing timerelationship, would have a material adverse effect on our financial condition, business and money.results of operations.

Competition

Milestone’s

Now, there is no subcutaneous drug delivery platform or device on the market regulating the flow rate and pressure of an injection capable of delivering a painless injection at the desired location like Milestone Scientific’s proprietary, patented Computer-Controlled Local Anesthesia Deliverydevices having our DPS Dynamic Pressure Sensing technology.

Milestone Scientific’s devices compete based on their performance characteristics and the benefits provided to the practitioner, patient and the business operations. Clinical studies have shown that our devices reduce fear, pain and anxiety for many patients, and Milestone Scientific believes that they can reduce practitioner stress levels, as well. Other computer-controlled local anesthesia delivery (C-CLAD) instrumentsoptions are the Quicksleeper and SleeperOne, from Dental Hi Tec, and the Comfort Control Syringe by Dentsply.

The Quicksleeper was invented in France by Dr. Alain Villette in 1991. It is marketed as the only local anesthetic delivery device in France that allows the ability to perform all intraoral local anesthetic injection techniques, including osteocentral anesthesia, quickly and without failure. The extra feature that gives the Quicksleeper this ability is a built-in motor in the syringe/handpiece that renders the syringe both an injector and a perforator of bone. That is, the handpiece of the Quicksleeper can perform an intraosseous injection via a motor driven perforation of the cortical plate of bone. A standard dental needle that attaches to the syringe spins as the motor rotates the handpiece thus acting as a perforator. However, the handpiece is relatively heavy, weighing 240 g. as compared to a standard syringe that weighs 80 g. Injection speed increases during the injection, but the operator cannot control when the injection speed increases.

Another computer-controlled injection instrument is called the Comfort Control Syringe or CCS. In the early 1990s, Dr. Mark Smith, a dentist from Ontario, Canada, invented a device that he incorporated into his practice as the local anesthetic delivery method. After perfecting the system, he released the rights of this device to Dentsply. In this system, many of the functions of the computer can be controlled directly from the syringe during the injection process. The base unit allows the dentist to program one of five different injections by pressing a single button. The five buttons marked on the base unit are block, infiltration, PDL, intraosseous and palatal. Each of these injections has a specific corresponding rate of local anesthetic delivery associated with it. The CCS enables a wide range of injection speeds controlled by the operator and the ability to control the computer directly from the syringe, but, since the CCS computer can be controlled by hand, the syringe must contain a certain amount of electronic equipment and this adds bulk to its circumference. The circumference of the CCS syringe is 112mm compared to 36mm for a traditional syringe, and 17mm for the Wand STA System. In addition, because of the electronics in the syringe, the operator will feel a slight amount of vibration in the syringe while the injection occurs. This will not affect the anesthesia, but it certainly is a feeling that is different from the traditional syringe or the Wand STA System, which both have no such vibration. The vibration in the Quicksleeper is minimal. This instrument is no longer being marketed.

The newest competition is the Calajet instrument. This instrument is manufactured in Europe and has been very slow to grow market acceptances. It recently began marketing in the USA with similar result. The instrument is a higher price than the Wand STA and does not provide the DPS software. Although a competitor, without a substantial distribution network this instrument will have a difficult time to be successful in the USA.

Milestone Scientific’s proprietary, patented devices with its DPS Dynamic Pressure Sensing technology platform also compete with disposable and reusable syringes that generally sell at lower prices and that use established and well-understood methodologies in both the dental and medical marketplaces.

Milestone’s instruments compete on the basis of their performance characteristics and the benefits provided to both the practitioner, patient and the dental business operations. Clinical studies have shown that the instruments reduce fear, pain and anxiety for many patients, and Milestone believes that they can reduce practitioner stress levels, as well.  Milestone’s newest product introduction, the STA Instrument, can be used for all dental injections that can be performed with a traditional dental syringe. Moreover, the STA Instrument can also be used for new and modified dental injection techniques that cannot be performed with traditional syringes. These new techniques allow for faster procedures shortening chair-time, minimizing the numbing of the lips and facial muscles, enhancing practice productivity, reducing stress and virtually eliminating pain and anxiety for both the patient and the dentist.

Milestone faces intense competition from many companies in the medical and dental device industry, possessing substantially greater financial, marketing, personnel, and other resources. Most competitors have established reputations, stemming from their success in the development, sale, and service of competing dental products. Further, rapidRapid technological change and research may affect theour products. Current or new competitors could, at any time, introduceintroduce new or enhanced products with features that render theour products less marketable or even obsolete. Therefore, Milestone Scientific must devote substantial efforts and financial resources to improve existing products, bring products to market quickly, and develop new products for related markets. In addition, the ability to compete successfully requires that Milestone Scientific establish an effective distribution network with a strong marketing plan. Historically, Milestone has been unsuccessful in executing the marketing plans for the products, primarily due to resource constraints. NewAny new products must be first approved by applicable regulatory authorities before they may be marketed. Milestone Scientific cannot assure you that it can compete successfully;successfully, that competitors will not develop technologies or products that render theour products less marketable or obsolete;obsolete, or, that Milestone Scientific will succeed in improving theits existing products, effectively develop new products, or obtain required regulatory approval for those products.

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Patents and Intellectual Property

Milestone holds the following U.S. utility and design patents:

During the 2014 and 2013 fiscal years, Milestone expensed $88,243 and $191,345, respectively, on research and development activities. The higher costs incurred in 2013 were primarily associated with the continued development of the Single Tooth Anesthetic (STA) delivery instrument and continuing efforts on developing medical products utilizing the CompuFlo technology.

Milestone relies on a combination of patent, copyright, trade secret, and trademark laws and employee and third party non-disclosure agreements to protect intellectual property rights. Despite the precautions taken by Milestone to protect the products, unauthorized parties may attempt to reverse engineer, copy, or obtain and use products and information that Milestone regarded as proprietary, or may design products serving similar purposes that do not infringe on Milestone’s patents. Milestone’s failure to protect its proprietary information and the expenses of doing so could have a material adverse effect on the operating results and financial condition.

In the event that the products infringe upon patent or proprietary rights of others, Milestone may be required to modify processes or to obtain a license. There can be no assurance that Milestone would be able to do so in a timely manner, upon acceptable terms and conditions, or at all. The failure to do so would have a material adverse effect on Milestone.

Government Regulation

The FDA cleared the CompuDent instrument and its disposable handpieces for marketing in the U.S. for dental applications in July 1996; the CompuMed instrument for marketing in the U.S. for medical applications in May 2001; and, the Safety Wand for marketing in the U.S. for dental applications in September 2003. For us to commercialize the other products in the U.S., Milestone will have to submit additional 510(k) applications with the FDA.  Milestone received FDA 510 (k) approval for the STA Instrument in August 2006.

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The manufacture and sale of medical devices and other medical products are subjectsubject to extensive regulation by the FDA pursuant to the U.S. Food, Drug and Cosmetic Act (“FDC Act,Act”), and by other federal, state and foreign authorities. Under the FDC Act, medical devices must receive FDA clearance before they can be marketed commercially in the U.S.United States. Some medical products must undergo rigorous pre-clinical and clinical testing and an extensive FDA approval process before they can be marketed. These processes can take a number ofmany years and require the expenditure of substantial resources. The time required for completing such testing and obtaining such approvals is uncertain, and FDA clearance may never be obtained. Delays or rejections may be encountered based upon changes in FDA policy during the period of product development and FDA regulatory review of each product submitted. Similar delays also may be encountered in other countries. Following the enactment of the Medical Device Amendments to the FDCU.S. Food, Drug and Cosmetic Act in May 1976, the FDA classified medical devices in commercial distribution into one of three classes. This classification is based on the controls necessary to 

reasonably ensure the safety and effectiveness of the medical device.devices. Class I devices are those devices whose safety and effectiveness can reasonably be ensured through general controls, such as adequate labeling, pre-market notification, and adherence to the FDA’sFDA’s Quality Instrument Regulation (“QSR”), also referred to as “Good Manufacturing Practices” (“GMP”) regulations. Some Class I devices are further exempted from some of the general controls. Class II devices are those devices whose safety and effectiveness reasonably can be ensured through the use ofusing special controls, such as performance standards, post-market surveillance, patient registries, and FDA guidelines. Class III devices are those which must receive pre-market approval by the FDA to ensure their safety and effectiveness. Generally, Class III devices are limited to life-sustaining, life-supporting or implantable devices.

If a manufacturer or distributor can establish that a proposed device is “substantially equivalent” to a legally marketed Class I or Class II medical device or to a Class III medical device for which the FDA has not required pre-market approval, the manufacturer or distributor may seek FDA marketing clearance for the device by filing a 510(k) Pre-market Notification. The 510(k) Pre-market Notification and the claim of substantial equivalence may have to be supported by various types of data and materials, including test results indicating that the device is as safe and effective for its intended use as a legally marketed predicate device. Following submission of the 510(k)

Pre-market Notification, the manufacturer or distributor may not place the device into commercial distribution until an order is issued by the FDA. By regulation, the FDA has no specific time limit by which it must respond to a 510(k) Pre-market Notification. At this time,Currently, the FDA typically responds to the submission of a 510(k) Pre-market Notification within 180 days. The FDA response may declare that the device is substantially equivalent to another legally marketed device and allow the proposed device to be marketed in the U.S. United States. However, the FDA may determine that the proposed device is not substantially equivalent or may require further information, such as additional test data, before the FDA is able to make a determinationdecide regarding substantial equivalence. Such determination or request for additional information could delay market introduction of products and could have a material adverse effect on us.products. If a device that has obtained 510(k) Pre-market Notification clearance is changed or modified in design, components, method of manufacture, or intended use, such that the safety or effectiveness of the device could be significantly affected, separate 510(k) Pre-market Notification clearance must be obtained before the modified device can be marketed in the U.S..United States. If a manufacturer or distributor cannot establish that a proposed device is substantially equivalent to a legally marketed device, the manufacturer or distributor will have to seek pre-market approval of the proposed device, a more difficult procedure requiring extensive data, including pre-clinical and human clinical trial data, as well as extensive literature to prove the safety and efficacy of the device.

The FDA cleared the Wand, our CompuDent System and its disposable handpieces, for marketing in the United States for dental applications in July 1996; the CompuMed^® System for marketing in the United States for medical applications in May 2001; the Safety Wand^® for marketing in the United States for dental applications in September 2003; the Wand STASystem for dental applications in August 2006; and our CompuFlo Epidural Computer Controlled Anesthesia System in June 2017. For us to commercialize other products in United States, Milestone Scientific would have to submit additional 510(k) applications to the FDA.

In 2017, the FDA reduced barrier to marketing clearance for certain dental devices. As such the entry into the dental market for other manufactures of injection devices may increase. However, any new device will be very limited in sales volume without a significant distributor in the dental market.

Though the STA Instrument, CompuDent, the Safety Wand and CompuMed certain dental devices have received FDA marketing clearance, there can be no assurance that any of the other productsmedical devices under development will obtain the required regulatory clearance in a timely manner, or at all. If regulatoryregulatory clearance of a product is granted, such clearance may entail limitations on the indicated uses for which the product may be marketed. In addition, modifications may be made to the products to incorporate and enhance their functionality and performance based upon new data and design review. There can be no assurance that the FDA will not request additional information relating to product improvements; that any such improvements would not require further regulatory review, thereby delaying the testing, approval and commercialization of product improvements; or, that ultimately any such improvements will receive FDA clearance.

Compliance with applicable regulatory requirements is subject to continual review and will be monitored through periodic inspectionsinspections by the FDA. Later discovery of previously unknown problems with a product, manufacturer, or facility may result in restrictions on such product or manufacturer, including fines, delays or suspensions of regulatory clearances, seizures or recalls of products, operating restrictions and criminal prosecution and could have a material adverse effect on Milestone.prosecution.

Milestone Scientific is subject to pervasive and continuing regulation by the FDA, whose regulations require manufacturers of medical devices to adhere to certain QSR requirements as defined by the FDC Act. QSR compliance requires testing, quality control and documentation procedures. Failure to comply with QSR requirements can result in the suspension or termination of production, product recall or fines and penalties. Products also must be manufactured in registered establishments. In addition, labeling and promotional activities are subject to scrutiny by the FDA and, in certain circumstances, by the Federal Trade Commission. The export of devices is also subject to regulation in certain instances.

The Medical Device Reporting (“MDR”) regulation obligates us to provide information to the FDA on product malfunctions or injuries alleged to have been associated with the use of the product or in connection with certain product failures that could cause serious injury. If, as a resultbecause of FDA inspections, MDR reports or other information, the FDA believes that Milestone Scientific is not in

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compliance with the law, the FDA can institute proceedings to detain or seize products, enjoin future violations, or assess civil and/or criminal penalties against us, theour officers or employees. Any action by the FDA could result in disruption of operations for an undetermined amount of time.

In March 2012, MilestoneSeptember 2014 we received approval for the Wand STA Single Tooth Anesthesia Instrument from ANVISA in Brazil. In June 2007, Milestone received a CE mark approval for the marketing of the STA InstrumentCompuFlo Epidural Computer Controlled Anesthesia System, in Europe.  In June 2003 Milestone received aeach case allowing such product to be marketed in most European countries and many other countries accepting CE mark for marketing of the Safety Wand and The Wand Handpieces with Needle in Europe.approved devices. In July 2003, Milestone Scientific obtained regulatory approval to sell the CompuDent System and its handpieces in Australia and New Zealand.

As of May 2014, China National Medicines received the appropriate registration approval from the regulatory body in China, therefore, shipment of Wand STA handpieces beganSystem was approved for sale in China. In the fourth quarter of 2014, the distribution agreement with China National Medicines was terminated and Milestone China Ltd. (owned 40% by Milestone Scientific) became the authorized distributor of the STA instruments and handpieces in China.

Product Liability

Failure to use any of the products in accordance with recommended operating procedures could potentially result in health hazards or injury. Failures of the products to function properly could subject Milestone to claims of liability. Milestone maintains liability insurance in an amount that Milestone believes is adequate. However, there can be no assurance that the insurance coverage will be sufficient to pay product liability claims brought against Milestone. A partially or completely uninsured claim, if successful and of significant magnitude, could have a material adverse effect on Milestone.

Employees

OnAs of December 31, 2014, Milestone2017, the Company had a total of 14 full-time employees consisting of two executive officers of Milestone and an executive officer of Wand Dental , a director of International and Professional Relations, a director of engineering, a director of marketing, two customer service representatives, three accountants, a quality care person, a personal assistant and an administrative manager.Scientific. Milestone Scientific also has a consultant who serves as a Director of Clinical Affairs and a consultant for marketing strategy.business development consultant.

None of our employees are subject to a collective bargaining agreement and we believe our employee relations are good.

Corporate Information

We were organized in August 1989 under the laws of the State of Delaware. Our principal executive office is located at 220 South Orange Avenue, Livingston, New Jersey 07039 and our telephone number is (973) 535-2717. Our web address is www.milestonescientific.com. Information contained on or accessed through our website is not part of this prospectus supplement. Our common stock is listed on the NYSE American under the ticker symbol “MLSS”.

Item 1A. CERTAIN RISK FACTORS THAT MAY AFFECT GROWTH AND PROFITABILITYRisk Factors

The followingfollowing factors may affect the growth and profitability of Milestone Scientific and should be considered by any prospective purchaser or current holder of Milestone’s securities:our securities.  Our business, financial condition, results of operations and stock price could be materially adversely affected by any of these risks.

Milestone does not

We have a consistent history of profitable operations.  Continuingoperating losses could exhaust capital resourcesthat are expected to continue, and force uswe are unable to discontinue operations.predict the extent of future losses, whether we will generate significant revenues or whether we will achieve or sustain profitability.

For

We are a small, medical device company with a history of limited revenue and significant operating losses and our prospects must be considered considering the uncertainties, risks, expenses and difficulties frequently encountered by similarly situated companies.  With only one exception (i.e., 2013), we have generated net losses in all periods since the commencement of our operations, including operating losses of approximately $5.2 million and $6.5 million for the years ended December 31, 20142017 and 2013, revenues were approximately $10.3 million and $10 million,2016, respectively. Milestone has a net loss of approximately $1,708,000 for year endedOverall, at December 31, 2014 and a net profit of approximately $1,465,000 for year ended December 31, 2013. In addition, Milestone has2017, we had losses for each year since the commencement of operations with the exception of 2013. Milestone has an accumulated deficit of approximately $62$78.6 million. AtWe expect to make substantial expenditures and incur increasing operating costs in the future and our accumulated deficit will increase significantly as we undertake to commercialize our CompuFlo^® Epidural Computer Controlled Anesthesia System.  Our losses have had, and are expected to continue to have, an adverse impact on our working capital, total assets and stockholders' equity.  Because of the risks and uncertainties associated with product development, we are unable to predict the extent of any future losses, whether we will ever generate significant revenues or if we will ever achieve or sustain profitability

We require additional funding and may be unable to raise capital when needed, which may force us to delay, curtail or eliminate commercialization efforts of our CompuFlo^® Epidural Computer Controlled Anesthesia System.

Our operations have consumed substantial amounts of cash since inception.  During the years ended December 31, 2014, Milestone had2017 and 2016, net cash flow used in operations was approximately $ 1.2 million and approximately $5.4 million, respectively.  We expect to continue to spend substantial amounts on product development and commercialization activities, including the commercialization of our recently FDA-approved CompuFlo^® Epidural Computer Controlled Anesthesia System.  Until such time, if ever, as we can generate a sufficient amount of product revenue and achieve profitability, we expect to seek to finance future cash equivalents,needs through equity or debt financings or corporate collaboration and licensing arrangements.  In addition, we may seek other alternatives to maximize the value of our intellectual property for dental applications, to focus more on, and finance, our medical applications.  If we are unable to raise additional capital, we will have to delay, curtail or eliminate the commercialization of our CompuFlo^® Epidural Computer Controlled Anesthesia System, our efforts to obtain FDA approval of our intra-articular device and/or our product development and other commercialization efforts.

Raising additional funds by issuing securities or through licensing or lending arrangements may cause dilution to our existing stockholders, restrict our operations or require us to relinquish proprietary rights.

To the extent that we raise additional capital by issuing equity securities, the share ownership of existing stockholders will be diluted.  Any future debt financing may involve covenants that restrict our operations, including Treasury Billslimitations on our ability to incur liens or additional debt, pay dividends, redeem our stock, make certain investments and engage in certain merger, consolidation or asset sale transactions, among other restrictions.  In addition, if we raise additional funds through licensing arrangements or the disposition of $10,367,993any of our assets, it may be necessary to relinquish potentially valuable rights to our product candidates or grant licenses on terms that are not favorable to us.

Relying exclusively on third parties to manufacture our products, changes in our informal manufacturing arrangements made by the manufacturer of our devices and working capitaldisruptions at the manufacturing facility of $13,147,257. The working capital increasedour manufacturer exposes us to risks that may harm our business.

We have limited internal experience in manufacturing operations and have not historically established our own manufacturing facilities.  We currently lack the internal resources to manufacture any of our products, including our CompuFlo^® Epidural Computer Controlled Anesthesia System.  At present, we have an informal arrangement with the manufacturer of our products.  While we have more than one manufacturer of the hand pieces for our devices, we only have a single manufacturer manufacturing our devices.  Our current arrangement with such sole source of supply is on a purchase order by $9,223,234 from December 31, 2013. The positivepurchase order basis.  As a result, we do not have price protection or a supply commitment for our devices.  If the manufacturer insists on a material change in working capital is primarilyterms or determines to discontinue manufacture of our devices, it could have an adverse effect on our financial condition and results of operation.

An operational disruption in the facility of the manufacturer of our devices could negatively impact production and our financial results.  The occurrence of a natural disaster, such as a hurricane, tropical storm, earthquake, tornado, severe weather, flood, fire or other unanticipated problems such as labor difficulties, equipment failure or unscheduled maintenance could cause operational disruptions of varied duration.  These types of disruptions could materially adversely affect our financial condition and results of operations to varying degrees dependent upon the facility, the duration of the disruption, our ability to shift business to another facility or find alternative sources of supply.  Any losses due to these events may not be covered by our existing insurance policies or may be subject to certain deductibles.  Given our current manufacturing relationships, it is possible that our manufacturing requirements may exceed the cash proceed fromavailable supply allotments under our existing agreements.  Our anticipated future reliance on third-party manufacturers exposes us to the Private Placementfollowing additional risks:

We may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited, and the FDA must approve any replacement contractor.  This approval would require new testing and compliance inspections.  In addition, a new manufacturer would have to develop substantially equivalent processes for production of our products.

●   Contract manufacturers might be unable to manufacture our products in May 2014 ($10 million). Milestone management continues to examine all areasthe volume and of the business to manage our cash flow. Milestone is actively pursuing the generation of positive cash flows from operating activities through an increase in revenue based upon management’s assessment of present contracts and current negotiations and reductions in operating expenses.

As of December 31, 2014, Milestone believes that it has sufficient cash reservesquality required to meet all of its anticipated obligationsour clinical and commercial needs.

●   Contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the next twelve months. Milestone will continuetime required to manage its cash position while taking strategic stepssuccessfully produce, store and distribute our products.

●   Contract manufacturers are subject to expand its businessongoing periodic unannounced inspections by the FDA and corresponding state agencies to ensure strict compliance with current good manufacturing practice and other government regulations and corresponding foreign standards. We do not have control over third-party manufacturers' compliance with these regulations and standards and our manufacturers may be found to be in noncompliance with certain regulations, which may impact their ability to manufacture our product.

●   If any third-party manufacturer makes improvements in the medical and dental, business sectors.

Milestone cannot become successful unless it gains greater market acceptancemanufacturing process for itsour products, and technology.

As with any new technology, there is substantial risk thatwe may not own, or may have to share, the marketplace will not acceptintellectual property rights to the potential benefits of this technology orinnovation.  We may be unwillingrequired to pay fees or other costs for any cost differential withaccess to such improvements

Each of these risks could delay the existing technologies. Market acceptancecommercialization of our CompuDentCompuFlo, ^® Epidural Computer Controlled Anesthesia System, limit our available supply of The Wand^®STA Instrument, the SafetyWand, CompuMed and CompuFlo depends,for dental applications, cause damage to our reputation, result in large part, upon the ability to educatehigher costs and/or deprive us of potential customers of the product’s distinctive characteristics and benefits and will require substantial marketing efforts and expense. More than 41,000 product revenues.instruments of the STA Instrument and its predecessors have been sold worldwide since 1998. Since being introduced to market in February 2007, more than 13,000 instruments of the STA Instrument have been sold.  Milestone cannot assure that its current or

11

proposed products will be accepted by practitioners or that any of the current or proposed products will be able to compete effectively against current and alternative products.

Milestone’s limited distribution channels must be expanded in order to become successful.

Future revenuesWe depend on Milestone’s ability to market and distribute its computer-controlled injection products successfully. In November 2012, Milestone signed on an exclusive distributor and marketing company to sell and distribute the STA instruments and handpieces in the USA and Canada.  To be successful, Milestone will need to engage additional distributors, provide for their proper training and ensure adequate customer support.  Milestone cannot assure that it will be able to hire and retain an adequate sales force or engage suitable distributors, or that the sales force or distributors will be able to successfully market and sell the products.

In early October 2012, the State Food and Drug Administration (SFDA) of the People’s Republic of China approved Milestone’s Single Tooth Anesthesia System® (STA System). In May 2014, the CFDA, (previously the SFDA), granted registration approval of the STA handpieces in China.

Milestone depends on two principal manufacturers. If Milestonewe cannot maintain itsour existing relationships or develop new ones, itwe may have to cease operations.operations.

Milestone Scientific and its subsidiary has informal arrangements with the manufacturer of the Wand STA Instrument, CompuDent^®, CompuMedCompuDent ^® CompuFlo Epidural, and CompuMed instrumentsCompuFlo Intra-Articular and with one of the principal manufacturers of the handpieces, for those items, respectively. Pursuant to the informal arrangements, they manufacture these productsdevices and handpieces under specific purchase orders without minimum purchase commitment. However, in November 2009,commitments. Milestone issued a purchase order to Tricor System Inc. to manufacture 12,000 STA Instruments, over the following three years. MilestoneScientific has a manufacturing agreement with one of the principal manufacturers, which is a related party, of its handpieces pursuant to which they manufacture products under specific purchase orders but without minimum purchase commitments. Milestone Scientific has been supplied by the manufacturer of the Wand STA Instrument, CompuDent^®, CompuMed^® CompuFlo Epidural and CompuMed CompuFlo Intra-Articular devices since the commencement of production in 1998, and the manufacturer of its handpieces since 2003.

However, termination of the manufacturing relationship with any of these manufacturers could significantly and adversely affect theour ability to produce and sell thethese products. Though other alternate sources of supply for handpieces exist, Milestone Scientific would need to recover its existing tools or have new tools produced to establish relationships with new suppliers. Establishing new manufacturing relationships could involve significant expense and delay. Any curtailment or interruptions of the supply, whether or not as a result or termination of the relationship, would have a material adverse effect on our financial condition, business and results of operations.

Issues with product quality could have a material adverse effect upon our business, subject us to regulatory actions and cause a loss of customer confidence in us or our products.

In general, our success depends upon the quality of our products.  Quality management plays an essential role in meeting customer requirements, preventing defects, improving our products and services and assuring the safety and efficacy of our products.  Our future success depends on our ability to maintain and continuously improve our quality management program.  A quality or safety issue may result in adverse effect.inspection reports, warning letters, product recalls or seizures, monetary sanctions, injunctions to halt manufacture and distribution of products, civil or criminal sanctions, costly litigation, refusal of a government to grant approvals and licenses, restrictions on operations or withdrawal of existing approvals and licenses.  An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, a loss of customer confidence in us or our current or future products, which may result in the loss of sales and difficulty in successfully launching new products.

Milestone

We may be subject to product liability claims that are not fullyfully covered by insurance and that could put Milestone Scientific under financial strain.

Milestone Scientific could be subject to claims for personal injury from the alleged malfunction or misuse of the dental and medical products. While Milestone Scientific carries liability insurance that is believed to be adequate, Milestone cannot assurethere is no assurance that the insurance coverage will be sufficient to pay such claims should they be successful. A partially or completely uninsured claim, if successful and of significant magnitude, could have a material adverse effect on Milestone.our business, financial condition and results of operations.

Milestone relies

If physicians do not accept nor use our CompuFlo^® Epidural Computer Controlled Anesthesia System, our ability to generate revenue from sales will be materially impaired.

Although the FDA has cleared our application to begin marketing the CompuFlo^® Epidural Computer Controlled Anesthesia System, this is no assurance that physicians, hospitals, clinics and other health care providers will accept and use it.  Acceptance and use of the CompuFlo^® Epidural Computer Controlled Anesthesia System will depend on many factors including:

            ●          perceptions by members of the health care community, including physicians, about the safety and effectiveness of our product;

            ●          cost-effectiveness of our product relative to competing products and systems;

            ●          convenience, ease of use and reliability of our product relative to competing products and systems;                       

            ●          patient satisfaction;

            ●          product availability as well as, manufacturer warranty, maintenance, and customer and technical support;

            ●          availability of reimbursement for our product from government or other healthcare payers; and

            ●          effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any.

Because we expect sales of the CompuFlo^® Epidural Computer Controlled Anesthesia System to generate substantially all our medical product revenues in the near-term, the failure of this product to find market acceptance would harm our business and could require us to seek additional financing or make such financing difficult to obtain on favorable terms, if at all.

Developments by competitors may render our products or technologies obsolete or non-competitive.

The medical device industry is intensely competitive and subject to rapid and significant technological change.  We expect that other companies (or individuals), whether located in the United States or abroad, will pursue the development of alternative injection-based or imaging-based systems that will compete with our products.  Many of these potential competitors have substantially greater capital resources, larger research and development staffs and facilities, longer product development history in obtaining regulatory approvals and greater manufacturing and marketing capabilities than we do.  These companies also compete with us to attract qualified personnel and parties for acquisitions, joint ventures or other collaborations.  As a result, we may not be able to compete effectively against these companies or their products.

If we are unable to adequately protect our patents, trade secrets and other proprietary rights, if our patents are challenged or if our provisional patent applications do not get approved, our competitiveness and business prospects may be materially damaged.

Intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names and trade dress, are important to our business.  We will endeavor to protect our intellectual property rights in key jurisdictions in which our products are produced or used and in jurisdictions into which our products are imported.  Our success will depend to a significant degree upon our ability to protect and preserve our intellectual property rights.  However, we may be unable to obtain or maintain protection for our intellectual property in key jurisdictions.  Although we own and have applied for patents and trademarks throughout the world, we may have to rely on judicial enforcement of our patents and other proprietary rights.  Our patents and other intellectual property rights may be challenged, invalidated, circumvented and rendered unenforceable or otherwise compromised.  A failure to protect, defend or enforce our intellectual property could have an adverse effect on our financial condition and results of operations.  Similarly, third parties may assert claims against us and our customers and distributors alleging our products infringe upon third party intellectual property rights.

We believe that the intellectual property underlying our products is a competitive advantage.  We rely on a combination of patent rights, trade secrets and nondisclosure and non-competition agreements to protect our proprietary intellectual property, and we will continue to do so.  There can be no assurance that our patents, trade secret policies and practices or other agreements will adequately protect our intellectual property.  Our issued patents may be challenged, found to be over-broad or otherwise invalidated in subsequent proceedings before courts or the U.S. Patent and Trademark Office.  Even if enforceable, we cannot provide any assurances that they will provide significant protection from competition.  The processes, systems, and/or security measures we use to preserve the integrity and confidentiality of our data and trade secrets may be breached, and we may not have adequate remedies resulting from such breaches.  In addition, our trade secrets may otherwise become known or be independently discovered by competitors.  There can be no assurance that the confidentiality, nondisclosure and non-competition agreements with employees, consultants and other parties with access to our proprietary information to protect our trade secrets, proprietary technology, processes and other proprietary rights, or any other security measures relating to such trade secrets, proprietary technology, processes and proprietary rights, will be adequate, will not be breached, that we will have adequate remedies for any breach, that others will not independently develop substantially equivalent proprietary information or that third parties will not otherwise gain access to our trade secrets or proprietary knowledge.  To the extent that our consultants, contractors or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

If we must take legal action to protect, defend or enforce our intellectual property rights, any suits or proceedings could result in significant costs and diversion of our resources and our management’s attention, and we may not prevail in any such suits or proceedings.  A failure to protect, defend or enforce our intellectual property rights could have an adverse effect on our results of operations.

We could lose our market advantage earlier than expected.

We believe that our products represent a significant improvement over any existing drug delivery injection system in use today.  However, this competitive advantage can evaporate quickly if we are not able to commercialize our products quickly.  In the medical device industry, the majority of an innovative product’s commercial value is realized during the early stages of commercialization, before competing products are developed.  Our market advantage is based, in part, on patent rights and the need for new competing products and systems to obtain regulatory approval before they can be commercialized.  The scope of our patent rights may be limited and may also depend on the availability of meaningful legal remedies. 

Our failure to adequately protect our intellectual property rights, through patents or otherwise, or limitations on the use or loss of such rights, could have a material adverse effect on our ability to prevent the commercialization of competing anesthetic delivery systems.  In some countries, basic patent protections for our products may not exist because certain countries did not historically offer the right to obtain specific types of patents and/or we (or our licensors) did not file in those markets.  In addition, the patent environment can be unpredictable, and the validity and enforceability of patents cannot be predicted with certainty.

Third parties could obtain patents that may require us to negotiate licenses to commercialize our technologies, and we cannot assure you that the required licenses would be available on reasonable terms or at all.

Third parties may claim that one or more aspects of our technologies or products may infringe on their intellectual property rights. 

Our computer-controlled anesthesia systems are complex systems and numerous U.S. and foreign patents and pending patent applications owned by third parties exist in fields that relate to the development and commercialization of drug delivery systems.  In addition, many companies have employed intellectual property litigation as a strategy to gain a competitive advantage.  It is possible that infringement claims may occur as the number of products and competitors in our market increases.  In addition, to the extent that we gain greater visibility and market exposure as a public company, we face a greater risk of being the subject of intellectual property infringement claims.  We cannot be certain that the conduct of our business does not and will not infringe intellectual property or other proprietary rights of others in the U.S. and in foreign jurisdictions.  If any of our computer-controlled anesthesia systems are found to infringe third party patent rights, we could be prohibited from manufacturing and commercializing the infringing technology unless we obtain a license under the applicable third-party patent and pay royalties or are able to design around such patent.  We may be unable to obtain a license on terms acceptable to us, or at all, and we may not be able to redesign the system to avoid infringement.  Even if we can redesign our products or processes to avoid an infringement claim, our efforts to design around the patent could require significant time, effort and expense and ultimately may lead to an inferior or costlier product.  Any claim of infringement by a third party, even those without merit, could cause us to incur substantial costs defending against the claim and could distract our management from our business.  Furthermore, if any such claim is successful, a court could order us to pay substantial damages, including compensatory damages for any infringement, plus prejudgment interest and could, in certain circumstances, treble the compensatory damages and award attorney fees.  These damages could be substantial and could harm our reputation, business, financial condition and operating results.  A court also could enter orders that temporarily, preliminarily or permanently prohibit us, our licensees, if any, and our customers from making, using, selling, offering to sell or importing one or more of our products or using our proprietary technologies or processes, or could enter an order mandating that we undertake certain remedial activities.  Any of these events could seriously harm our business, operating results and financial condition.

We are exposed to the risks inherent in international sales and operations.

In 2017, export sales outside of the United States made up approximately 57% of our total sales, and we sell our products to customers in approximately 53 countries.  We have exposure to risks of operating in many foreign countries, including:

●         fluctuations in foreign currency exchange rates, could increase the end user cost for instruments;

●         restrictions on, or difficulties and costs associated with, the currency exchange from foreign countries to obtain US dollars;

●         difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;

●         unexpected changes in political or regulatory environments;

●         political and economic instability;

●         import and export restrictions and other trade barriers;

●         difficulties in obtaining approval for significant transactions;

Continued instability in the credit and financial markets may negatively impact our ability to commercialize our products.

Financial markets in the United States, Canada, Europe and Asia continue to experience disruption, including, among other things, significant volatility in security prices, declining valuations of certain investments, as well as severely diminished liquidity and credit availability.  Business activity across a wide range of industries and regions continues to be reduced.  As a small medical device company, we rely on third parties for several important aspects of our business, including contract manufacturing of products, distribution of our products and sales and marketing.  These third parties may be unable to satisfy their commitments to us due to tightening of global credit from time to time, which would adversely affect our business.  The continued volatility in the credit and financial market conditions may also negatively impact our ability to access capital and credit markets and our ability to manage our cash balance.  While we are unable to predict the continued duration and severity of any adverse conditions in the United States and other countries, any of the circumstances mentioned above could adversely affect our business, financial condition, operating results and cash flow or cash position.

Our ability to commercialize our products will depend in part on the extent to which reimbursement will be available from governmental agencies, health administration authorities, private health maintenance organizations and health insurers and other healthcare payers.

Our ability to generate revenues from our products will be diminished if the products sell for inadequate prices or hospitals or physicians are unable to obtain adequate levels of reimbursement for the cost they incur in connection with the use of the product.  Significant uncertainty exists as to the reimbursement status of newly approved healthcare products.  Healthcare payers, including Medicare, are challenging the prices charged for medical products and services.  Government and other healthcare payers increasingly attempt to contain healthcare costs by limiting both coverage and the level of reimbursement for products.  Insurance coverage may not be available, or reimbursement levels may be inadequate, to cover the charges for the use of such product.  If government and other healthcare payers do not provide adequate coverage and reimbursement for any of our products, market acceptance of such product could be reduced.  Prices in many countries, including many in Europe, are subject to local regulation and price controls.  In the United States, where pricing levels for medical products, procedures and services are substantially established by third-party payors, including Medicare, if payors reduce the amount of reimbursement for a product, it may cause groups or individuals dispensing the product to discontinue use of the product, to substitute lower cost products even if the alternatives are less effective or to seek additional price-related concessions.  These actions could have a negative effect on our financial results.  The existence of direct and indirect price controls and pressures on our products could materially adversely affect our financial prospects and performance.

We are subject to substantial domestic and international government regulation, including regulatory quality standards applicable to our manufacturing and quality processes. Failure by us to comply with these standards could have an adverse effect on our business, financial condition or results of operations.

The FDA regulates the approval, manufacturing and sales and marketing of many of our products in the United States. Significant government regulation also exists in other countries in which we conduct business. As a device manufacturer, we are required to register with the FDA and are subject to periodic inspection by the FDA for compliance with the FDA’s Quality System Regulation requirements, which require manufacturers of medical devices to adhere to certain regulations, including testing, quality control and documentation procedures. In addition, the federal Medical Device Reporting regulations require us to provide information to the FDA whenever there is evidence that reasonably suggests that a device may have caused or contributed to a death or serious injury or, if a malfunction were to occur, could cause or contribute to a death or serious injury. Compliance with applicable regulatory requirements is subject to continual review and is rigorously monitored through periodic inspections by the FDA. In the European community, we are required to maintain certain ISO certifications to sell our products and must undergo periodic inspections by notified bodies to obtain and maintain these certifications. Failure to comply with current governmental regulations and quality assurance guidelines could lead to temporary manufacturing shutdowns, product recalls or related field actions, product shortages or delays in product manufacturing. Efficacy or safety concerns, an increase in trends of adverse events in the marketplace, and/or manufacturing quality issues with respect to our products could lead to product recalls or related field actions, withdrawals, and/or declining sales.

We may be subject, directly or indirectly, to U.S. federal and state health care fraud and abuse and false claims laws and regulations. Prosecutions under such laws have increased in recent years and we may become subject to such litigation. If we are unable to comply or have not fully complied with such laws, we could face substantial penalties.

Our operations are and will continue to be directly, or indirectly through our distributors, customers and health care professionals, subject to various U.S. federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, federal False Claims Act, and the Foreign Corrupt Practice Act of 1977 (“FCPA”). These laws may impact, among other things, our proposed sales, and marketing and education programs. The federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made under a federal health care program such as Medicare or Medicaid. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal health care covered business, the statute has been violated. The Anti-Kickback Statute is broad and, despite a series of narrow safe harbors, prohibits many arrangements and practices that are lawful in businesses outside of the health care industry. Penalties for violations of the federal Anti-Kickback Statute include criminal penalties and civil and administrative sanctions such as fines, imprisonment and possible exclusion from Medicare, Medicaid and other federal health care programs. An alleged violation of the Anti-Kickback Statute may be used as a predicate offense to establish liability pursuant to other federal laws and regulations such as the federal False Claims Act. Many states have also adopted laws like the federal Anti-Kickback Statute, some of which apply to the referral of patients for health care items or services reimbursed by any source, not only the Medicare and Medicaid programs.

The federal False Claims Act prohibits persons from knowingly filing, or causing to be filed, a false claim to, or the knowing use of false statements to obtain payment from, the federal government. Suits filed under the False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of the government and such individuals, commonly known as “relators” or “whistleblowers,” may share in any amounts paid by the entity to the government in fines or settlement. The frequency of filing qui tam actions has increased significantly in recent years, causing greater numbers of medical device, pharmaceutical and health care companies to have to defend False Claim Act actions. The Affordable Care Act includes provisions expanding the ability of certain relators to bring actions that would have been previously dismissed under prior law. When an entity is determined to have violated the federal False Claims Act, it may be required to pay up to three times the actual damages sustained by the government, plus civil penalties for each separate false claim. The Deficit Reduction Act of 2005 encouraged states to enact or modify their state false claims act to be at least as effective as the federal False Claims Act by granting states a portion of any federal Medicaid funds recovered through Medicaid-related actions. Most states have enacted state false claims laws, and many of those states included laws with qui tam provisions.

 The Affordable Care Act includes provisions known as the Physician Payments Sunshine Act, which require manufacturers of drugs, biologics, devices and medical supplies covered under Medicare and Medicaid to record any transfers of value to physicians and teaching hospitals and to report to the Centers for Medicare and Medicaid Services for subsequent public disclosure. Manufacturers must also disclose investment interests held by physicians and their family members. Failure to submit the required information may result in civil monetary penalties of up to $1 million per year for knowing violations and may result in liability under other federal laws or regulations. Similar reporting requirements have also been enacted on the state level in the United States, and an increasing number of countries worldwide either have adopted or are considering similar laws requiring transparency of interactions with health care professionals. In addition, some states, such as Massachusetts and Vermont, impose an outright ban on certain gifts to physicians. These laws could affect our promotional activities by limiting the kinds of interactions we could have with hospitals, physicians or other potential purchasers or users of our products. Both the disclosure laws and gift bans will impose administrative, cost and compliance burdens on us. If we are found to be in violation of any of the laws described above and other applicable state and federal fraud and abuse laws, we may be subject to penalties, including civil and criminal penalties, damages, fines, or an administrative action of suspension or exclusion from government health care reimbursement programs and the curtailment or restructuring of our operations.

In addition, we are subject to the Foreign Corrupt Practices Act (“FCPA”) and other countries’ anti-corruption/anti-bribery regimes, such as the U.K. Bribery Act. The FCPA prohibits improper payments or offers of payments to foreign governments and their officials for obtaining or retaining business. Safeguards we implement to discourage improper payments or offers of payments by our employees, consultants, sales agents or distributors may be ineffective, and violations of the FCPA and similar laws may result in severe criminal or civil sanctions, or other liabilities or proceedings against us, any of which would likely harm our reputation, business, results of operations and financial condition.

Excessive returns under our Exclusive Distribution and Supply Agreement with Henry Schein, Inc. could have a material adverse effect on our business, financial condition and results of operations.

In June 2016, we entered into a new exclusive distribution and supply agreement with Henry Schein pursuant to which they were appointed as the exclusive distributor for our dental products in the United States and Canada.  Under that agreement, Henry Schein has a right to return our products for full credit against the purchase price paid by them under limited circumstances in accordance with such agreement, including but not limited to, returns due to shipment error by us or factory defect.  Excessive returns during any calendar year could have a material adverse effect on our business, financial condition and results of operations.

Changes in laws and regulations over which we have no control can significantly affect our business and results of operations.

Any governmental entity that regulates our operations in the country in which they are located may enact new legislation or adopt new laws and regulations or policies at any time, and new judicial decisions may change the interpretation of existing legislation or regulations at any time in any of the countries in which our operations or projects are located. We have no control over any such changes. Any new laws or regulations governing our operations could have an adverse impact on our business, results of operations and prospects.

We rely on the continuing services of our Interim Chief Executive Officer and Director of Clinical Affairs.

We depend on the personal efforts and abilities of our Interim Chief Executive Officer and Director of Clinical Affairs.

Milestone depends on the personal efforts and abilities of the Chief Executive Officer and the Director of Clinical Affairs. MilestoneScientific maintains a key man life insurance policy in the amount of $1,000,000 on the life of theits Interim Chief Executive Officer.  However, the loss of his services or the services of our Director of Clinical Affairs, on whom Milestone maintainswe maintain no insurance, could have a materially adverse effect on the business.  

The market priceour business results of Milestone’s common stock has been volatileoperations and may continue to fluctuate significantly because of various factors, some of which are beyond Milestone’s control.prospects.

Milestone’s stock price has been extremely volatile, fluctuating during the last two years between $2.45 and $1.00 The market price of common shares could continue to fluctuate significantly in response to a variety of factors, some of which may be beyond Milestone’s control.

MilestoneMilestone Scientific is effectively controlled by a limited number of shareholders.stockholders.

Milestone’s

Milestone Scientific’s principal shareholders,stockholders, Leonard Osser, Gian Domenico Trombetta and K. Tucker Andersen beneficially own 44%approximately 39.68% of the issued and outstanding shares of common stock. As a result, they have the ability tocan exercise substantial control over Milestone’sour affairs and corporate actions requiring shareholderstockholder approval, including electing directors, selling all or substantially all of

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theour assets, merging with another entity or amending itsour certificate of incorporation. This de facto control could delay, deter or prevent a change in control and could adversely affect the price that investors might be willing to pay in the future for Milestone’sMilestone Scientific’s securities.

Future sales or  In addition, because of the potential for saleconcentration of a substantial numberownership of our shares of Milestone’s common stock could cause the trading price of common stock, our stockholders may from time to decline and could impair Milestone’s ability to raise capital through subsequent equity offerings.

Sales of a substantial number of shares of Milestone’s common stocktime, observe instances where there may be less liquidity in the public markets or the perception that these sales may occur, could cause the market price of the stock to decline and could materially impair its ability to raise capital through the sale of additional equityfor our securities. At December 31, 2014, Milestone had outstanding options to purchase 1,488,796 shares of common stock at prices ranging from $0.36 to $2.23 per share with a weighted average exercise price of $1.33. Holders of these options are given the opportunity to profit from a rise in the market price of the common stock and are likely to exercise their securities at a time when Milestone would be able to obtain additional equity capital on more favorable terms. Thus, the terms upon which Milestone will be able to obtain additional equity capital may be adversely affected, since the holders of outstanding options and warrants can be expected to exercise them at a time when Milestone would, in all likelihood, be able to obtain any needed capital on terms more favorable than the exercise terms provided by such outstanding securities. The market price of the common shares has been volatile and may continue to fluctuate significantly because of various factors, some of which are beyond Milestone’s control.

Adherence to Sarbanes-Oxley Act and SEC rules concerningconcerning internal controls may be so costly thatand compliance could have an adverse effect on Milestone.Milestone Scientific.

The Managementmanagement of Milestone Scientific has assessed the effectiveness of internal control over financial reporting as of December 31, 2014.2017.  In making this assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Milestone Scientific complied with Sarbanes-Oxley requirements to include in the annual report a management report on the effectiveness of the internal control over financial reporting.  In 2005,2017 and 2016, Milestone hiredScientific utilized an outside consultant to assist with the development and implementation of the necessary internal controls and reporting procedures. In 2014 and 2013, Milestone utilized the outside consultant on a quarterly basis to review compliance with the internal controls over financial reporting. This expense amounted to $5,250approximately $15,000 and $9,500$20,000 in 20142017 and 2013,2016, respectively and the cost is expected to continue in 2015.2018.

The market price of our common stock may be volatile and may fluctuate in a way that is disproportionate to our operating performance.

Our stock price may experience substantial volatility because of many factors, including:

 ●          sales or potential sales of substantial amounts of our common stock;

            ●          delay or failure in initiating our strategy to commercialize our CompuFlo® Epidural Computer Controlled Anesthesia System;

            ●          the success of our strategy to commercialize our CompuFlo® Epidural Computer Controlled Anesthesia System;

            ●          announcements about us or about our competitors, including clinical trial results, regulatory approvals or new product introductions that could adversely impact the market acceptance or competitive advantages of our CompuFlo® Epidural Computer Controlled Anesthesia System;

            ●          developments concerning our licensors or product manufacturers;

            ●          litigation and other developments relating to our patents or other proprietary rights or those of our competitors;

            ●          our ability to successfully develop and commercialize to products and services for the healthcare industry;

            ●          conditions in the medical device industries;

            ●          governmental regulation and legislation;

            ●          variations in our anticipated or actual operating results; and

            ●          change in securities analysts’ estimates of our performance, or our failure to meet analysts’ expectations.

Many of these factors are beyond our control.  The stock markets in general, and the market for small, medical device companies have historically experienced extreme price and volume fluctuations.  These fluctuations often have been unrelated or disproportionate to the operating performance of these companies.  These broad market and industry factors could reduce the market price of our common stock, regardless of our actual operating performance.

Sales of a substantial number of shares of our common stock, or the perception that such sales may occur, may adversely impact the price of our common stock.

Almost all our 33,191,571 outstanding shares of common stock, as well as a substantial number of shares of our common stock underlying outstanding warrants, are available for sale in the public market, either freely or pursuant to Rule 144 under the Securities Act of 1933, as amended.  In addition, we have an effective S-3 registration statement on file with the SEC covering the sale by us of up to $30 million of securities, including common stock, preferred stock, debt, convertible debt and warrants.  To date, we have sold $3,435,775 (2,452,900 shares) of common stock under that registration statement.  Sales of a substantial number of shares of our common stock, or the perception that such sales may occur, may adversely impact the price of our common stock

We have never paid and do not intend to pay cash dividends in the foreseeable future.  As a result, capital appreciation, if any, will be your sole source of gain.

We have never paid cash dividends on any of our capital stock and we currently intend to retain future earnings, if any, to fund the development and growth of our business.  In addition, the terms of existing and future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

Provisions in our certificate of incorporation, our by-laws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our common stock.

Provisions of our certificate of incorporation, our by-laws and Delaware law may have the effect of deterring unsolicited takeovers or delaying or preventing a change in control of our company or changes in our management, including transactions in which our stockholders might otherwise receive a premium for their shares over then current market prices. In addition, these provisions may limit the ability of stockholders to approve transactions that they may deem to be in their best interests.  These provisions include:

●   the inability of stockholders to call special meetings; and the ability of our Board of Directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could include the right to approve an acquisition or other change in our control or could be used to institute a rights plan, also known as a poison pill, that would work to dilute the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our Board of Directors; and

●   limitations on filling of vacancies could make it more difficult for a third party to acquire, or discourage a third party from seeking to acquire, control of our company.   

In addition, Section 203 of the Delaware General Corporation Law prohibits a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years, has owned 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.  The existence of the forgoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock.  They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition. 

If we fail to adhere to the strict listing requirements of NYSE American, we may be subject to delisting.  As a result, our stock price may decline, and our common stock may be delisted.  If our stock were no longer listed on NYSE American, the liquidity of our securities likely would be impaired.

Our common stock currently trades on the NYSE American under the symbol “MLSS”. If we fail to adhere to NYSE American's strict listing criteria, including with respect to stock price, our market capitalization and stockholders’ equity, our stock may be delisted.  This could potentially impair the liquidity of our securities not only in the number of shares that could be bought and sold at a given price, which may be depressed by the relative illiquidity, but also through delays in the timing of transactions and the potential reduction in media coverage.  As a result, an investor might find it more difficult to dispose of our common stock.  Any failure at any time to meet the continuing NYSE American listing requirements could have an adverse impact on the value of and trading activity in our common stock. Although we currently satisfy the listing criteria for NYSE American, if our stock price declines, we could be at risk of falling below NYSE American continuing listing criteria.

Item 1B. Unresolved Staff Comments

None.

Item 2. Description of Property

The headquarters for Milestone Scientific is located at 220 South Orange Avenue,Ave, Livingston, New Jersey which consists ofJersey. Milestone Scientific leases approximately 5,8937,625 square feet of office space. Milestone leases its headquartersThe lease term expires January 31, 2020 at a monthly cost of $9,085, which it believes to be competitive and the lease term expires on January 30, 2020. The leased office space is in good condition.$12,522. Additionally, Milestone Scientific has other smaller insignificant leases ending through 2017. A third partythird-party distribution and logistics center in Pennsylvania handles shipping and order fulfillment on a month-to-month basis.

Milestone Scientific does not own or intend to invest in any real property. Milestone Scientific currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.

Item 3. Legal Proceedings

At the present time,

    Milestone Scientific is not involved in any material litigation.

Item 4. Mine Safety Disclosure

Not applicable.

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PART II

Item 5. Market for Common Equity, and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities

Market Information

Milestone’s Common Stock trades

On June 1, 2015, our common stock was listed on the NYSE American under the symbol “MLSS”. Prior to its listing on the NYSE American, Milestone’s common stock traded on the OTC Market on the OTCQB market tier under the symbol “MLSS”. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions.

Common Stock

same symbol. The following table sets forth the high and low sales prices of Milestone’s common stock for the Common Stockperiods presented.

Holders

According to the records

         As of the transfer agent, there wereApril 2, 2018, we had approximately 142 and 144 shareholders130 stockholders of record of Milestone’sour common stock as of December 31, 2014 and 2013, respectively. However, Milestone believesstock. We believe that there arewe have approximately 1,8002,185 beneficial owners of Milestone’sour common stock at December 31, 2014 and 2013, respectively.

stock.

Dividends

The holders of Milestone’s common stock are entitled to receive such dividends as may be declared by Milestone’sMilestone Scientific’s Board of Directors. Milestone Scientific has not paid and does not expect to declare or pay any dividends in the foreseeable future.

For information regarding securities authorized under the equity compensation plan, see Item 12.

Sales of Unregistered Securities

See NOTE K – STOCKHOLDERS’ EQUITY, to the audited consolidated financial statements that accompany this Report for information regarding the issuance of unregistered securities.

These issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act") and a legend restricting the sale, transfer, or other disposition of these shares other than in compliance with the Act was imprinted on stock certificates evidencing the shares.

As of December 31, 2017, Milestone Scientific issued a total of 352,015 shares of its common stock as follows:

●   120,000 shares to the Board of Directors with a total value of $159,480;

●   10,913 shares to an employee for compensation with a total value of $15,000; and

●   an aggregate of 410,729 shares to consultants for services rendered with a total value of $548,511.

 In addition, as of July 13, 2017, pursuant to the Asset Purchase Agreement with APAD Octrooi B.V. and APAD B.V. (collectively, the “Sellers”), Milestone Scientific issued an aggregate of 1,646,358 shares of its common stock to the Sellers in consideration for certain patent rights and other intellectual property rights related to the Sellers’ computer-controlled injection instrument.

The foregoing shares were issued in reliance upon the exemptions from the registration requirements of the Securities Act of 1933, as amended (the "Act"), pursuant to Sections 4(a)(2), Section 4(a)(5) and/or Regulation D promulgated thereunder. A legend restricting resale, transfer, or other disposition of these shares other than in compliance with the Act was imprinted on the stock certificates evidencing such shares.

ITEM 6. Selected Financial Data

Milestone Scientific is a “smaller reporting company” as defined by Regulations S-K and as such, is not required to provide the information contained in this item pursuant to Regulation S-K.

ITEM 7. Management’sManagement’s Discussion and Analysis of Financial conditionCondition and Results of Operations.Operations

The following discussions of the financial condition and results of operations should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this annual report. Certain statements in this discussion and elsewhere in this report constitute forward-looking statements, within the meaning of section 21E of the Exchange Act, that involve

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risks and uncertainties. The actual results may differ materially from those anticipated in these forward-looking statements. See “Certain Risk Factors” on page 12-14 of"Risk Factors" elsewhere in this Form 10-K.

OVERVIEW

        Our common stock was listed on the NYSE American on June 1, 2015 and trades under the symbol “MLSS”. We have developed a proprietary, computer-controlled anesthetic delivery instrument, using The Wand®, a single use disposable handpiece. The instrument is marketed in dentistry under the trademark CompuDent®, and STA Single Tooth Anesthesia System® and in medicine under the trademark CompuMed®. CompuDent® is suitable for all dental procedures that require local anesthetic. CompuMed® is suitable for many medical procedures regularly performed in plastic surgery, hair restoration surgery, podiatry, colorectal surgery, dermatology, orthopedics and several other disciplines. The dental instruments are sold in the United States, Canada, and in over 53 other countries abroad. There have been no medical instruments sold in the United States and limited amounts sold internationally as of the reporting date. Certain of our medical instruments have obtained European CE mark approval and can be marketed and sold in most European countries. In June 2017, the FDA approved our 510(k) applications for marketing clearance in the United States of our CompuFlo® Epidural Computer Controlled Anesthesia System.  We are in the process of introductory meetings with medical device distributors within the United States and foreign markets. 

In 2014, Milestone continued to focus2017, we remained focused on advancing efforts to achieve our two three primary objectives; those being:

●    Worldwide distribution of the CompuFlo® Epidural Computer Controlled Anesthesia System.

●    Identify distributors in the United States for the Epidural instruments, now that FDA clearance has been received;

●    Complete the Cosmetic device and obtain European Regulatory Approve (CE market clearance)

Wand STA Instrument Growth

Since its market introduction in early 2007, the Wand STA Instrument and prior computerized controlled local anesthesia deliveryC-CLAD products have been used to deliver over 5566 million safe, effective and comfortable injections. The instrument has also been favorably evaluated in numerous peer-reviewed, published clinical studies and associated articles. Moreover, there appears to be a growing consensus among users that the STA Instrument is proving to be a valuable and beneficial instrument that is positively impacting the practice of dentistry worldwide.

Global Distribution Network

United States and Canadian Market

In August 2013,

         Beginning January 1, 2016, Milestone Scientific entered an exclusive distributorinto a non-exclusive distribution agreement (beginning October 1, 2013), with Henry Schein, Inc. (“Henry Schein”). In June 2016, that agreement was replaced with an exclusive distribution arrangement for the sale and distribution of the CompuDent handpieces inour dental products for the United States and Canada.Canada with Henry Schein. Under this arrangement we have a semi-dedicated independent sales force visiting dentists. We believe that this arrangement will be more effective than previous arrangements which primarily relied upon appearances at dental shows and catalog sales.

In July 2013, Milestone entered a strategic partnership with        To date, Henry Schein has endeavored to accomplish the largest provider of specialty sales and distribution solutions for healthcare. Pursuant to the strategic partnership, the distributor will hold, for a period of three years with the FDA market,goals set forth in the exclusive rights to market, resell, labeldistribution agreement for The Wand® STA instrument and distribute Milestone’s CompuFlo injection technology for use in epidural applications for childbirth and other pain management needshandpieces, including training of its exclusive products sales specialists. Specifically, 25 exclusive product sales specialists have now been fully trained as experts in the U.S. hospital sector.features, advantages and benefits of The Wand® STA instrument and handpieces and all 25 are currently in the field selling the instrument.

In November 2012, Milestone entered

         Henry Schein also plans to train an additional customer service representative to support dentists across North America through its exclusive distribution and marketing agreement with a well-known U.S. domestic manufacturer and distributor, for the sale and distribution of the STA instruments and handpieces in United States and Canada.product sales customer call center, as business volume increases.  

International Market

On the global front, we also have granted exclusive marketing and distribution rights for the Wand STA Instrument to select dental suppliers in various international regions in Asia, Africa, South America and Europe. They include Istrodent (Pty) Ltd. in South Africa and Unident AB in the Scandinavian countries of Denmark, Sweden, Norway and Iceland.

In early October 2012, the State Food and Drug Administration (SFDA)(CFDA) of the People’sPeople’s Republic of China approved Milestone’s our Wand STASingle Tooth Anesthesia System® (STA(STA System). In May 2014, the CFDA (previouslyalso approved the SFDA), granted registration approval of the Wand STA handpieces for sale in China.

Shortly before the end of the second quarter 2009, we announced that we were refining our international marketing strategy to gain greater access to and penetration of the international dental markets for the STA Instrument, CompuDent and related disposable handpieces. The new sales strategy provides for increasing hands-on oversight and support of our existing international distribution network, while also attracting new distributors throughout Europe, Asia and South America. To assist in this endeavor, Milestone added in the spring of 2010 an International Sales Director to focus on the growth of our products outside the USA and Canada.

In March 2011, we entered into a definitive joint venture agreement with shareholders of Beijing 3H (Heart-Help-Health) Scientific Technology Co., Ltd. (Beijing 3H) and a group of individual investors for the development, commercialization, manufacture and marketing of epidural and intra-articular injection medical instruments.  At December 31,September 2014, Milestone holds a 49.98% interest in the joint venture and other remaining founding shareholders holds a 40.93% interest in (the “Medical Joint Venture” or “Milestone Medical Inc.”).

Milestone contributed an exclusive worldwide royalty-free license to use its patents as they pertain to these two instruments and disposables only to the Medical Joint Venture. Shareholders Beijing 3H and a group of individual investors contributed $1.5 million to the joint venture to enable the joint venture to design and develop two commercial instruments and related disposables using

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Milestone’s CompuFlo® technology. Milestone will have distribution responsibility in the U.S. and Canada while Beijing 3H would distribute products exclusively in the People’s Republic of China, Macao, Hong Kong and other regions of Asia. In the third quarter of 2014, a shareholder of Beijing 3H sold his interest in Milestone Medical Inc. and its agreement to distribute said instruments in Asia terminated. Milestone China (40% owned by Milestone Scientific Inc.) signed distributor agreement with Milestone Scientific to distribute Milestone Medical Inc. instruments in Asia. As of December 31, 2014, the Medical Joint Venture and the development project is ongoing and nearing the completion of the two medical instruments. In fact, in September 2014 the Medical Joint Venture, Milestone Medical Inc. received CE clearance to distribute their epidural and intra-articular instruments in the European Community (EU). Milestone is actively pursuing Medical distributors for the instrument in the EU community. Milestone Medical Inc signed a distribution agreement in March 2015 with a Polish Medicalmedical distributor in Poland for the distribution of the epidural instrument startinginstrument. This distribution agreement was terminated in April 2015.

In November 2013,late 2016 due to the distributor’s inadequate performance under the distribution agreement. Milestone Medical Inc., issued 2 million shares of its common stock at $1.50 per share, totaling ($3.0 million) in a private placement in Poland.  The consummation of the private placement providedis continuing to pursue distributors for the admission ofinstrument in the Milestone Medical Inc. common stock for trading on a platform maintained by the Warsaw Stock Exchange.  As a result of this transaction, Milestone owned approximately forty-five (45.5%) percent (post-transaction) of Milestone Medical Inc. and Milestone recorded a $1,363,650 Gain on the Dilutive Effect of these additional shares issued by Milestone Medical Inc. In the fourth quarter of 2014, Milestone purchased an additional 995,000 shares from a founding shareholder. As a result, Milestone Scientific Inc. owns 49.98% of Milestone Medical Inc. at December 31, 2014.EU community.

In late June 2014, Milestone agreedScientific invested $1 million in Milestone China Ltd. (“Milestone China”) by contributing 772 STA Instruments to invest $1 millionMilestone China for a 40% ownership in a Hong Kong organized medical and dental distribution company (“interest. Milestone China”).  Milestone’s contribution to this entity will be 772 STA instruments.  Handpieces will be purchased for cash as required.  The new entity provides positive impact on dental and future medical business in China and other parts of Asia.  Milestone China did not begin operations until July 2014 and the first shipment of 300 STA instruments occurred in July 2014. MilestoneScientific recorded this investment under the equity method of accounting. The remaining 472 STA instruments were delivered by Milestone toScientific recorded a loss on its investment in Milestone China of $0 and $164,837 as of December 31, 2017 and 2016, respectively exclusive of deferral of gross profit. Milestone Scientific's investment in January 2015.Milestone China was $0 as of December 31, 2017 and December 31, 2016, respectively. Milestone Scientific incurred cumulative losses beyond its investment in Milestone China of $3,147,470 and $1,124,350 as of December 31, 2017 and December 31, 2016, respectively, which have been suspended.

In June 2017, Milestone Scientific entered into an agreement for the sale of its interest in Milestone China (a forty (40%) percent interest) (the “Milestone China Shares”) to an unaffiliated United States domiciled purchaser and a 10-year option agreement to repurchase the Milestone China Shares. The purchase price for the Milestone China Shares was $1,400,000 of which $125,000 was paid in cash and $1,275,000 was paid by delivery of a non-interest bearing secured promissory note. The note is payable in quarterly installments of $125,000 until paid in full and is secured by the Milestone China Shares until full repayment.  In addition, pursuant to such note, the purchaser is precluded from selling all or substantially all its assets prior to repayment of the note. The 10-year option agreement provides Milestone Scientific an option to repurchase the Milestone China Shares at $1,400,000 within the first two years and at fair market value (as defined in such agreement) for the remainder of the 10-year term. The transaction has been accounted for as a secured financing and Milestone Scientific will continue to account for its relationship with Milestone China under the equity method of accounting. A note receivable is presented on the Company’s balance sheet, along with a deferral from financing transaction ($1,400,000). The carrying value of the forty (40%) percent investment at the transaction date was zero.

The sale of the Milestone China Shares allows Milestone Scientific to continue to expand in the China market by supplying Milestone China with the STA Single Tooth Anesthesia System® and related hand pieces, while eliminating the burden on Milestone Scientific's management as a 40% minority owner.  Milestone Scientific believes that the sale will provide Milestone China with a new partner that may accelerate its penetration of the China market.

As of March 2, 2018, the promissory note was in default. If Milestone Scientific exercises its rights as a secured party it may be obligated to return to the purchaser up to the $250,000 received for the Milestone China Shares as surplus. At this time Milestone Scientific has not received a response from the purchaser of the Milestone China Shares, Milestone Scientific has not recorded any financial benefit from the sale of Milestone China Shares to date.

The following table shows a breakdown of Milestone’sMilestone Scientific’s product sales (net), domestically and internationally, by product category, and the percentage of product sales (net) by eachbusiness segment product category:

Milestone earned gross profit of 65% and 68% in the years ended December 31, 2014 and 2013, respectively.  However, the revenues and related gross profits have not been sufficient to support overhead, new product introduction and research and development expenses.  Although Milestone anticipates expending funds for research and development in 2015, these amounts will vary based on the operating results for each quarter. Milestone has incurred annual operating losses and negative cash flows from operating activities since its inception, except for 2013. Milestone, at December 31, 2014, as a result of $10 million capital raise ($9.4 million net cash) in May 2014, has sufficient cash reserves to meet all of its anticipated obligations for at least the next twelve months.  

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Milestone is actively pursuing the continued generation of positive cash flows from operating activities through increase in revenue, assessment of current contracts and current negotiations.

In 2015, MilestoneScientific plans to further support increased sales and marketing activity through our current distributors and through newly appointed distributors of the Wand STA instruments and handpieces in the international market. In the U.S.United States and Canada, Milestone Scientific will continue the utilization of independent hygienists’hygienists for training individual practitioners and group practices domestically, refined and directed advertising to dental professionals, continue to develop Key Opinion Leaders (KOL) and support and broaden our global distribution network.

Additionally, with the recent FDA marketing clearance for the epidural instrument, Milestone announced the formation of a strategic alliance, whereby a third party distributor will serve as the exclusive distributor of Milestone’s Single Tooth Anesthesia System® (STA System)Scientific is initiating marketing and all related disposable itemssales efforts in the United States and Canada, beginning November 15, 2012. Additionally,US to establish medical sector distributors for the third party distributor will initiate a marketing campaign to drive sales in these territories.sale of this instrument

In August 2013,February and March 2018 Milestone appointed Henry Schein as its exclusive distributorScientific hired an Executive VP of Global Sales and Marketing and a Vice President of US Sales to fill a significant gap in our commercialization efforts of the USA and Canada for the CompuDent handpieces.CompuFlo Epidural System.

Current ProductProduct Platform

See Item 1. Description of Business

Technology Rights

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

Milestone provided the exclusive worldwide royalty-free license to Milestone Medical Inc. for the use of Milestone’s patients for development of two medical instruments in 2011. In return for the license, Milestone originally received a 50% interest in Milestone Medical Inc. As of December 31, 2014, Milestone Scientific owns 49.98% if Milestone Medical Inc.

Summary of Critical Accounting Policies and Significant Judgments andEstimates

Milestone’s

         Milestone Scientific's discussion and analysis of the financial condition and results of operations areis based upon its consolidated financial statements whichthat have been prepared in accordance with accounting principles generally accepted in the U.S.United States ("GAAP") and include the accounts of its wholly-owned and majority-owned subsidiaries including, Wand Dental, Milestone Advanced Cosmetic and Milestone Medical. Milestone Education is a variable interest entity of which Milestone Scientific is the primary beneficiary and is consolidated into Milestone Scientific's financial statements. All significant, intra-entity transactions and balances have been eliminated in the consolidation.   

        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, Milestone Scientific evaluates its estimates, including those related to accounts receivable, inventories, stock-based compensation and contingencies. Milestone Scientific bases its 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 apparentclear from other sources. Actual results may differ from those estimates under different assumptions or conditions.

While significant accounting policies are more fully described in Note BC to the consolidated financial statements included elsewhere in this report, Milestone Scientific believes that the following accounting policies and significant judgments and estimates are most critical in understanding and evaluating the reported financial results.

Treasury Bills

The fair valuesAssessment of our Ability to Continue as a Going Concern

Our management has made various estimates in assessing our ability to continue as a going concern as of the report date of our independent auditor's report included in this Form 10-K. These estimates include, an increase in the revenues generated by Wand Dental because of the new distribution agreement with Henry Schein, an increase in international revenue, (non-China) a reduction in our profit margins due to the nature of the distribution relationships with both Henry Schein and Milestone marketable securities are determined in accordance with GAAP, with fair value being defined asChina, and reduction our selling, general and administrative costs for one-time expenses incurred during 2017. Based on this assessment, management believes that our cash on hand, accounts receivable and the amount that wouldanticipated revenues from the dental business will be receivedsufficient to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basisfund our business operations for considering such assumptions,at least the Company utilizesnext 12 months from the three-tier value hierarchy, as prescribed by GAAP.filing date of this Form 10-K.

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Accounts Receivable

The realization of Accounts Receivable current and long-term will have

Milestone Scientific sells a significant impactamount of its products on Milestone. The criteria used by managementcredit terms to evaluateits major distributors. Milestone Scientific estimates losses from the adequacyinability of the allowance for doubtful accounts included, among others,its customers to make payments on amounts billed. Most of credit worthiness of the customer, current trends, prior payment performance, the age of the receivables and Milestone’s overall historical experience.sales are due within ninety days from invoicing. Milestone Scientific has not incurred any significant credit losses.

Inventories

Inventory costing, obsolescence and physical control are significant to the on-going operation of the business.

Inventories principally consist of finished goods and component parts stated at the lower of cost (first-in, first-out method) or market. Inventory quantities on hand are reviewed on a quarterly basis and a provision for excess and obsolete inventory is recorded if required based on past and expected future sales.sales, potential technological obsolescence and product expiration requirement and regulations.

Investment in Medical Joint Venture

Milestone entered into a Medical Joint Venture with a third party, shareholders of Beijing 3H, and a group of individual investor for the development and commercialization of two medical products. Milestone as of December 31, 2014 own 49.98% of the Medical Joint Venture and have recorded the investment on the equity basis of accounting. Milestone’s proportionate share of expenses incurred by the Medical Joint Venture will be charged to the Statement of Operations on a periodic basis.

Investment in Milestone China

In July 2014, Milestone agreed to invest $1.0 million (distributor price), 772 STA instruments for a forty percent ownership in a Hong Kong based medical and dental distribution company, (“Milestone China”). The instruments will be shipped to the distributor over one year period. The distributor will purchase STA handpieces on a cash basis as required. 300 STA instruments were shipped in July 2014 and were recorded at Milestone’s cost in the investment account for Milestone China on the Balance Sheet in the third quarter 2014. Milestone China began operations in July 2014.

Impairment of Long-Lived Assets

The long lived assets of

 Milestone principally patents and trademarks are the base features of the business. MilestoneScientific reviews long-lived assets for impairment whenever events or circumstances and situations change such that there is an indication(i.e. a triggering event) indicate that the carrying amounts may not be recoverable. The carrying value of the assetassets is evaluated in relation to the operating performance and future undiscounted cash flows of the underlying assets. Milestone Scientific adjusts the net book value of an underlying asset if its fair value is determined to be less than its net book value. There have been no impairment indicators or triggering events and therefore there was no impairment as of December 31, 2017.

Revenue Recognition

Revenue from product sales is recognized, net of discounts and allowances to domestic distributors, on the date of shipment for essentiallysubstantially all shipments, since the shipment terms are FOB warehouse. Milestone will recognizeScientific recognizes revenue on date of arrival of the goods at the customer’scustomer's location, where shipments are FOB destination. Shipments to international distributors are FOB the warehouse and revenue is therefore recognized on shipment. In bothall cases the price to the buyer is fixed and the collectability is reasonably assured. Further, Milestone Scientific has no obligation on these sales for any post installation, set-up or maintenance, these being the responsibility of the buyer. Milestone’sMilestone Scientific's only obligation after sale is the normal commercial warranty against manufacturing defects if the alleged defective unit is returned within the warranty period. Devices and hand pieces are not bundled but rather sold separately and, as such, there are no multiple element determinations in connection with the revenue recognition

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Results of Operations

The following table sets forth for the consolidated results of operations for the year ended December 31, 20142017 compared to 20132016 as a percentage of revenues. The trends suggested by this table may not be indicative of future operating results: