##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 001-14053
 MILESTONE SCIENTIFIC INC.
  Delaware
    

13-3545623(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 220 South Orange Avenue, Livingston, New Jersey 07039
 (973) 535-2717  (Registrants telephone number, including area code)
 
  þ o
  Large accelerated filer o
    
    Accelerated filer
o
    
    Non-accelerated filer o
    
    Smaller reporting company
þ(Do not check if a smaller reporting company)
 o þ
 
 o o
 SEC1296 (02-08)
    
    Potential persons who are to respond to the collection of information contained in this form are not required
to respond unless the form displays a currently valid OMB control number.




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##### 



MILESTONE SCIENTIFIC INC
 INDEX
 PART I  FINANCIAL INFORMATION
 Item 1. Financial Statements.Condensed
Balance Sheets
June 30, 2008 (Unaudited) and December 31, 2007Condensed Statements of Operations
Three Months and Six Months Ended June 30, 2008 and 2007 (Unaudited)Condensed Statements of Changes in Stockholders Equity (Deficiency)
Six Months Ended June 30, 2008 (Unaudited)Condensed Statements of Cash Flow

Six Months Ended June 30, 2008 and 2007 (Unaudited)Notes to Condensed Financial Statement (Unaudited)Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.Item 3. Quantitative and Qualitative Disclosures About Market Risk.Item 4. Controls and Procedures.PART II  OTHER INFORMATIONItem 1. Legal Proceedings.Item 1A. Risk Factors.Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.Item 3. Defaults Upon Senior Securities.Item 4. Submission of Matters to a Vote of Security Holders.Item 5. Other Information.Item 6. Exhibits.SIGNATURESCERTIFICATIONSEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION
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FORWARD-LOOKING STATEMENTS
 When used in this Quarterly Report on Form 10-Q, the words may, will, should, expect,
believe, anticipate, continue, estimate, project, intend and similar expressions are
intended to identify forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act regarding events, conditions and financial trends that may
affect Milestones future plans of operations, business strategy, results of operations and
financial condition. Milestone wishes to ensure that such statements are accompanied by meaningful
cautionary statements pursuant to the safe harbor established in the Private Securities Litigation
Reform Act of 1995. Prospective investors are cautioned that any forward-looking statements are not
guarantees of future performance and are subject to risks and uncertainties and that actual results
may differ materially from those included within the forward-looking statements as a result of
various factors. Such forward-looking statements should, therefore, be considered in light of
various important factors, including those set forth herein and others set forth from time to time
in Milestones reports and registration statements filed with the Securities and Exchange
Commission (the Commission). Milestone disclaims any intent or obligation to update such
forward-looking statements.
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##### Table of Contents



June 30, 2008
    
    
    December 31, 2007(Unaudited)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    260,643
    
    
    $
    745,003Accounts receivable, net of allowance for doubtful accounts of $5,000 in 2008 and 2007
    
    
    564,086
    
    
    
    346,347Royalty receivable
    
    
    9,006
    
    
    
    15,358Inventories
    
    
    1,088,399
    
    
    
    1,636,744Advances to contract manufacturer
    
    
    977,433
    
    
    
    1,192,584Prepaid expenses
    
    
    92,849
    
    
    
    169,727Total current assets
    
    
    2,992,416
    
    
    
    4,105,763Investment in distributor, at cost
    
    
    76,319
    
    
    
    76,319Equipment, net of accumulated depreciation of $311,254 as of June 30, 2008
and $284,145 as of December 31, 2007
    
    
    175,144
    
    
    
    220,808Patents, net of accumulated amortization of $103,086 as of June 30, 2008
and $79,498 as of December 31, 2007
    
    
    734,550
    
    
    
    559,378Other assets
    
    
    10,081
    
    
    
    27,297Total assets
    
    $
    3,988,510
    
    
    $
    4,989,565LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    1,220,827
    
    
    $
    1,855,835Accrued expenses
    
    
    264,174
    
    
    
    201,103Deferred compensation payable to officers
    
    
    19,792
    
    
    
    15,833Total current liabilities
    
    
    1,504,793
    
    
    
    2,072,771Long-term Liabilities:Accounts payable-long term
    
    
    
    
    
    $
    443,847Line of credit-net of discount of $73,251 and $65,371 respectively
    
    
    1,226,749
    
    
    
    934,629Total long-term liabilities
    
    
    1,226,749
    
    
    
    1,378,476Commitments and ContingenciesStockholders EquityCommon stock, par value $.001; authorized 50,000,000 shares; 12,226,000 shares issued;
504,639 shares to be issued, and 12,192,696 shares outstanding as of June 30, 2008;
11,787,572 shares issued, 421,306 shares to be issued, and 11,754,239 shares outstanding
as of December 31, 2007
    
    
    12,731
    
    
    
    12,210Additional paid-in capital
    
    
    59,290,670
    
    
    
    58,483,539Accumulated deficit
    
    
    (57,134,917
    )
    
    
    (56,045,915
    )Treasury stock, at cost, 33,333 shares
    
    
    (911,516
    )
    
    
    (911,516
    )Total stockholders equity
    
    
    1,256,968
    
    
    
    1,538,318Total liabilities and stockholders equity
    
    $
    3,988,510
    
    
    $
    4,989,565
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Three Months Ended June 30,
    
    
    Six Months Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Product sales, net
    
    $
    1,540,883
    
    
    $
    1,770,337
    
    
    $
    2,928,873
    
    
    $
    4,032,364Royalty income
    
    
    9,007
    
    
    
    35,834
    
    
    
    23,170
    
    
    
    83,770Total revenue
    
    
    1,549,890
    
    
    
    1,806,171
    
    
    
    2,952,043
    
    
    
    4,116,134Cost of products sold
    
    
    594,437
    
    
    
    955,274
    
    
    
    1,058,361
    
    
    $
    1,786,484Royalty expense
    
    
    
    
    
    
    (7,338
    )
    
    
    
    
    
    $
    (1,586
    )Total cost of revenue
    
    
    594,437
    
    
    
    947,936
    
    
    
    1,058,361
    
    
    
    1,784,898Gross profit
    
    
    955,453
    
    
    
    858,235
    
    
    
    1,893,682
    
    
    
    2,331,236Selling, general and administrative expenses
    
    
    1,367,807
    
    
    
    1,809,554
    
    
    
    2,839,784
    
    
    
    3,646,442Research and development expenses
    
    
    36,000
    
    
    
    121,398
    
    
    
    84,319
    
    
    
    299,964Total operating expenses
    
    
    1,403,807
    
    
    
    1,930,952
    
    
    
    2,924,103
    
    
    
    3,946,406Loss from operations
    
    
    (448,354
    )
    
    
    (1,072,717
    )
    
    
    (1,030,421
    )
    
    
    (1,615,170
    )Interest expense
    
    
    (18,668
    )
    
    
    
    
    
    
    (49,592
    )
    
    
    Interest-Amortization of debt issuance
    
    
    (7,567
    )
    
    
    
    
    
    
    (13,696
    )
    
    
    Interest income
    
    
    1,471
    
    
    
    3,799
    
    
    
    4,707
    
    
    
    11,135Net loss applicable to common stockholders
    
    $
    (473,118
    )
    
    $
    (1,068,918
    )
    
    $
    (1,089,002
    )
    
    $
    (1,604,035
    )Loss per share applicable to common stockholders 
basic and diluted
    
    $
    (0.04
    )
    
    $
    (0.09
    )
    
    $
    (0.09
    )
    
    $
    (0.13
    )Weighted average shares outstanding and to be issued 
basic and diluted
    
    
    12,228,792
    
    
    
    12,043,103
    
    
    
    12,370,659
    
    
    
    12,020,790
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AdditionalCommon Stock
    
    Paid-in
    
    Accumulated
    
    TreasuryShares
    
    Amount
    
    Capital
    
    Deficit
    
    Stock
    
    TotalBalance, January 1, 2008
    
    
    12,208,878
    
    
    $
    12,210
    
    
    $
    58,483,539
    
    
    $
    (56,045,915
    )
    
    $
    (911,516
    )
    
    $
    1,538,318Options issued to employees and consultants
    
    
    
    
    
    
    
    
    
    
    86,815
    
    
    
    
    
    
    
    
    
    
    
    86,815Common stock issued for payment of services
    
    
    156,448
    
    
    
    156
    
    
    
    262,590
    
    
    
    
    
    
    
    
    
    
    
    262,746Common stock issued for payment of
consulting services
    
    
    201,936
    
    
    
    202
    
    
    
    255,897
    
    
    
    
    
    
    
    
    
    
    
    256,099Common stock issued for payment of
employee compensation
    
    
    80,044
    
    
    
    80
    
    
    
    80,337
    
    
    
    
    
    
    
    
    
    
    
    80,417Common stock to be issued for settlement of
deferred compensation
    
    
    83,333
    
    
    
    83
    
    
    
    99,917
    
    
    
    
    
    
    
    
    
    
    
    100,000Warrants issued in connection with
amendment of Line of Credit
    
    
    
    
    
    
    
    
    
    
    21,575
    
    
    
    
    
    
    
    
    
    
    
    21,575Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,089,002
    )
    
    
    
    
    
    
    (1,089,002
    )Balance, June 30, 2008
    
    
    12,730,639
    
    
    $
    12,731
    
    
    $
    59,290,670
    
    
    $
    (57,134,917
    )
    
    $
    (911,516
    )
    
    $
    1,256,968
 6




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SIX MONTHS ENDED JUNE 30,2008
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (1,089,002
    )
    
    $
    (1,604,035
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation expense
    
    
    37,214
    
    
    
    50,262Amortization of patents
    
    
    23,588
    
    
    
    11,424Amortization of debt discount
    
    
    13,696
    
    
    
    Common stock and options issued for compensation, consulting
and vendor services
    
    
    267,232
    
    
    
    393,809Loss on sale/disposal of equipment
    
    
    4,996
    
    
    
    Bad debt expense
    
    
    
    
    
    
    64,378Changes in operating assets and liabilities:(Increase) in accounts receivable
    
    
    (217,739
    )
    
    
    (417,180
    )Decrease in royalty receivable
    
    
    6,352
    
    
    
    24,273Decrease (Increase) in inventories
    
    
    548,345
    
    
    
    (242,689
    )Decrease (Increase) to advances to contract manufacturer
    
    
    215,151
    
    
    
    (71,250
    )Decrease to prepaid expenses and other current assets
    
    
    76,878
    
    
    
    51,848Decrease in other assets
    
    
    17,216
    
    
    
    1,892(Decrease) Increase in accounts payable
    
    
    (560,010
    )
    
    
    661,974Increase in accrued expenses
    
    
    63,071
    
    
    
    1,872Increase in deferred compensation
    
    
    3,959
    
    
    
    75,000Net cash used in operating activities
    
    
    (589,053
    )
    
    
    (998,422
    )Cash flows from investing activities:Purchases of property and equipment
    
    
    (4,296
    )
    
    
    (23,768
    )Proceeds on sale of equipment
    
    
    7,749
    
    
    
    Payment for patents rights
    
    
    (198,760
    )
    
    
    Net cash used in investing activities
    
    
    (195,307
    )
    
    
    (23,768
    )Cash flows from financing activities:Proceeds from exercise of stock options
    
    
    
    
    
    
    54,601Long-term borrowing-other
    
    
    300,000
    
    
    
    Net cash provided by financing activities
    
    
    300,000
    
    
    
    54,601NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (484,360
    )
    
    
    (967,589
    )Cash and cash equivalents at beginning of period
    
    
    745,003
    
    
    
    1,160,116Cash and cash equivalents at end of period
    
    $
    260,643
    
    
    $
    192,527Supplemental disclosure of cash flow information:Interest expense paid in cash
    
    
    
    
    
    
    Income taxes paid
    
    $
    3,140
    
    
    
    Warrants issued in connection with Line of Credit
    
    $
    21,575
    
    
    
    Shares
issued to settle accounts payable
    
    $
    518,845
    
    
    $
    
  7




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MILESTONE SCIENTIFIC INC.
 
 NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
 ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION
         CompuFlo
 8




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NOTE  1 SUMMARY OF ACCOUNTING POLICIES
           .
   9




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The Fair
Value Option for Financial Assets and Financial Liabilities -Including an amendment of FASB
Statement No. 115.
 Summary No. 141 (revised 2007)
 Non-controlling Interest in Consolidated Financial Statements- and amendment of ARB No. 51.
   NOTE  2 BASIC AND DILUTED NET LOSS PER COMMON SHARE
   NOTE  3 STOCK OPTION PLANS
 Share-Based Payment
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WeightedWeighted
    
    Average
    
    AggregateNumber
    
    Averaged
    
    Remaining
    
    Intrinsicof
    
    Exercise
    
    Contractual
    
    OptionsOptions
    
    Price
    
    Life (Years)
    
    ValueOutstanding, January 1, 2008
    
    
    391,334
    
    
    
    1.86
    
    
    
    2.54
    
    
    $
    108,800Granted
    
    
    201,666
    
    
    
    0.87
    
    
    
    4.87
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited or expired
    
    
    (43,001
    )
    
    
    1.50
    
    
    
    
    
    
    
    Outstanding, June 30, 2008
    
    
    549,999
    
    
    
    1.56
    
    
    
    3.44
    
    
    
    Exercisable, June 30, 2008
    
    
    369,221
    
    
    
    1.83
    
    
    
    2.88
    
    
    
    
      WeightedWeighted
    
    Average
    
    AggregateNumber
    
    Averaged
    
    Remaining
    
    Intrinsicof
    
    Exercise
    
    Contractual
    
    OptionsOptions
    
    Price
    
    Life (Years)
    
    ValueOutstanding, January 1, 2008
    
    
    639,133
    
    
    
    3.15
    
    
    
    2.56
    
    
    $
    20,667Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited or expired
    
    
    (11,666
    )
    
    
    
    
    
    
    
    
    
    
    Outstanding, June 30, 2008
    
    
    627,467
    
    
    
    3.14
    
    
    
    2.11
    
    
    
    Exercisable, June 30, 2008
    
    
    502,467
    
    
    
    3.48
    
    
    
    1.74
    
    
    
    
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NOTE  4 CONCENTRATION OF CREDIT RISK
 CompuDent
  NOTE  5 LINE OF CREDIT
  12




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NOTE  6 STOCK ISSUANCE
  NOTE  7 SIGNIFICANT CUSTOMERS
   Three Months Ended June 30,2008
    
    
    2007Units
    
    $
    343,025
    
    
    $
    600,980Handpieces
    
    
    1,238,143
    
    
    
    1,133,670Other
    
    
    (40,285
    )
    
    
    35,687$
    1,540,883
    
    
    $
    1,770,337United States
    
    $
    989,303
    
    
    $
    1,445,686Canada
    
    
    157,185
    
    
    
    148,978Other Foreign
    
    
    394,395
    
    
    
    175,673$
    1,540,883
    
    
    $
    1,770,337
 Six Months Ended June 30,2008
    
    
    2007Units
    
    $
    562,230
    
    
    $
    1,616,544Handpieces
    
    
    2,414,534
    
    
    
    2,315,870Other
    
    
    (47,891
    )
    
    
    99,951$
    2,928,873
    
    
    $
    4,032,365United States
    
    $
    1,887,018
    
    
    $
    3,309,237Canada
    
    
    317,507
    
    
    
    148,978Other Foreign
    
    
    724,348
    
    
    
    574,150$
    2,928,873
    
    
    $
    4,032,365
 STA CompuDent
 STA CompuDent CompuMed
 NOTE  8 COMMITMENTS AND OTHER
 Contract Manufacturing Arrangement
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##### Table of Contents



CompuDent CompuMed The Wand The Wand
  Other Commitments
 CoolBlue Ionic White
 Single Tooth Anesthesia (STA) System CompuDent STA System CompuDent
 NOTE  9 SUBSEQUENT EVENTS
  14




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##### Table of Contents



ITEM 2. Managements Discussion and Analysis and Plan of Operation.
  OVERVIEW
   
    
    Optimizing our tactical approach to product sales and marketing in order to
significantly increase penetration of the global dental and medical markets with our
proprietary, patented Computer-Controlled Local Anesthesia Delivery (C-CLAD) solution, the
STA System; and
    
    Identifying and pursuing strategic collaborations with third parties to jointly develop
new products utilizing our CompuFlo®pressure force technology for innovative new medical
applications.
    STA System STA System
  15




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##### Table of Contents



STA System STA System STA STA System
 STA System STA System STA System Dentistry Today
 STA System
 STA System
    STA System The Wand
 STA System STA
 CompuFlo
 16




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##### Table of Contents



CompuFlo
 CompuFlo
  Three
Months Ended June 30,2008
    
    
    2007DOMESTICUnits
    
    $
    174,047
    
    
    
    17.6
    %
    
    $
    606,113
    
    
    
    41.9
    %Handpieces
    
    
    844,756
    
    
    
    85.4
    %
    
    
    820,992
    
    
    
    56.8
    %Other
    
    
    (29,500
    )
    
    
    -3.0
    %
    
    
    18,581
    
    
    
    1.3
    %Total Domestic
    
    $
    989,303
    
    
    
    100.0
    %
    
    $
    1,445,686
    
    
    
    100.0
    %INTERNATIONALUnits
    
    $
    168,978
    
    
    
    30.7
    %
    
    $
    (5,133
    )
    
    
    -1.6
    %Handpieces
    
    
    393,387
    
    
    
    71.3
    %
    
    
    312,678
    
    
    
    96.3
    %Other
    
    
    (10,785
    )
    
    
    -2.0
    %
    
    
    17,106
    
    
    
    5.3
    %Total International
    
    $
    551,580
    
    
    
    100.0
    %
    
    $
    324,651
    
    
    
    100.0
    %DOMESTIC/INTERNATIONAL ANALYSISDomestic
    
    $
    989,303
    
    
    
    64.2
    %
    
    $
    1,445,686
    
    
    
    81.7
    %International
    
    
    551,580
    
    
    
    35.8
    %
    
    
    324,651
    
    
    
    18.3
    %Total Product Sales
    
    $
    1,540,883
    
    
    
    100.0
    %
    
    $
    1,770,337
    
    
    
    100.0
    %
 Six
Months Ended June 30,2008
    
    
    2007DOMESTICUnits
    
    $
    255,191
    
    
    
    13.5
    %
    
    $
    1,525,648
    
    
    
    46.1
    %Handpieces
    
    
    1,669,665
    
    
    
    88.5
    %
    
    
    1,715,349
    
    
    
    50.5
    %Other
    
    
    (37,838
    )
    
    
    -2.0
    %
    
    
    68,239
    
    
    
    2.1
    %Total Domestic
    
    $
    1,887,018
    
    
    
    100.0
    %
    
    $
    3,309,236
    
    
    
    100.0
    %INTERNATIONALUnits
    
    $
    307,039
    
    
    
    29.5
    %
    
    $
    90,895
    
    
    
    12.6
    %Handpieces
    
    
    744,869
    
    
    
    71.5
    %
    
    
    600,521
    
    
    
    83.0
    %Other
    
    
    (10,053
    )
    
    
    -1.0
    %
    
    
    31,712
    
    
    
    4.4
    %Total International
    
    $
    1,041,855
    
    
    
    100.0
    %
    
    $
    723,128
    
    
    
    100.0
    %DOMESTIC/INTERNATIONAL ANALYSISDomestic
    
    $
    1,887,018
    
    
    
    64.4
    %
    
    $
    3,309,236
    
    
    
    82.1
    %International
    
    
    1,041,855
    
    
    
    35.6
    %
    
    
    723,128
    
    
    
    17.9
    %Total Product Sales
    
    $
    2,928,873
    
    
    
    100.0
    %
    
    $
    4,032,364
    
    
    
    100.0
    %
  Technology Rights
 SafetyWand CompuFlo CompuDent
 Summary of Significant Accounting Policies, Judgments and Estimates
  17




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.
  Accounts Receivable
  Inventories
  Impairment of Long-Lived Assets
  Revenue Recognition
   18




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##### Table of Contents



Results of Operations
 STA System CompuFlo
  Three Months Ended June 30
    
    
    Six Months Ended June 302008
    
    
    2007
    
    
    2008
    
    
    2007Products sales, net
    
    $
    1,540,883
    
    
    
    99
    %
    
    $
    1,770,337
    
    
    
    98
    %
    
    $
    2,928,873
    
    
    
    99
    %
    
    $
    4,032,364
    
    
    
    98
    %Royalty income
    
    
    9,007
    
    
    
    1
    %
    
    
    35,834
    
    
    
    2
    %
    
    $
    23,170
    
    
    
    1
    %
    
    
    83,770
    
    
    
    2
    %Total revenue
    
    
    1,549,890
    
    
    
    100
    %
    
    $
    1,806,171
    
    
    
    100
    %
    
    
    2,952,043
    
    
    
    100
    %
    
    $
    4,116,134
    
    
    
    100
    %Cost of products sold
    
    
    594,437
    
    
    
    38
    %
    
    
    955,274
    
    
    
    53
    %
    
    
    1,058,361
    
    
    
    36
    %
    
    
    1,786,484
    
    
    
    43
    %Royalty expense
    
    
    
    
    
    
    
    
    
    
    (7,338
    )
    
    
    0
    %
    
    
    
    
    
    
    
    
    
    
    (1,586
    )
    
    
    0
    %Total cost of revenue
    
    
    594,437
    
    
    
    38
    %
    
    
    947,936
    
    
    
    52
    %
    
    
    1,058,361
    
    
    
    36
    %
    
    
    1,784,898
    
    
    
    43
    %Gross Profit
    
    
    955,453
    
    
    
    62
    %
    
    
    858,235
    
    
    
    48
    %
    
    
    1,893,682
    
    
    
    64
    %
    
    
    2,331,236
    
    
    
    57
    %Selling, general and
administrative expenses
    
    
    1,367,807
    
    
    
    88
    %
    
    
    1,809,554
    
    
    
    99
    %
    
    
    2,839,784
    
    
    
    96
    %
    
    
    3,646,442
    
    
    
    88
    %Research and development expenses
    
    
    36,000
    
    
    
    2
    %
    
    
    121,398
    
    
    
    7
    %
    
    
    84,319
    
    
    
    3
    %
    
    
    299,964
    
    
    
    7
    %Total operating expenses
    
    
    1,403,807
    
    
    
    91
    %
    
    
    1,930,952
    
    
    
    107
    %
    
    
    2,924,103
    
    
    
    99
    %
    
    
    3,946,406
    
    
    
    96
    %Loss from operations
    
    
    (448,354
    )
    
    
    -29
    %
    
    
    (1,072,717
    )
    
    
    -59
    %
    
    
    (1,030,421
    )
    
    
    -35
    %
    
    
    (1,615,170
    )
    
    
    -39
    %Other income  interest & expense
    
    
    (24,764
    )
    
    
    -2
    %
    
    
    3,799
    
    
    
    0
    %
    
    
    (58,581
    )
    
    
    -2
    %
    
    
    11,135
    
    
    
    0
    %Net loss
    
    $
    (473,118
    )
    
    
    -31
    %
    
    $
    (1,068,918
    )
    
    
    -59
    %
    
    $
    (1,089,002
    )
    
    
    -37
    %
    
    $
    (1,604,035
    )
    
    
    -39
    %
 Three months ended June 30, 2008 compared to three months ended June 30, 2007
 STA CompuDent STA STA
 Ionic White
   19




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STA
 STA
      Six months ended June 30, 2008 compared to the six months ended June 30, 2007
 STA STA CompuDent CompuDent Ionic White
  20




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STA
 STA CompuFlo
     Liquidity and Capital Resources
     21




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Item 3. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
  22




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PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
 Single Tooth Anesthesia (STA) System CompuDent STA System CompuDent
 
 ITEM 1A. RISK FACTORS
  We have no history of profitable operations. Continuing losses could exhaust our capital resources
and force us to discontinue operations.
    23




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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
   Shares
    
    
    $Shares issued for Employee Compensation
    
    
    70,730
    
    
    $
    64,584Shares issued for services
    
    
    36,156
    
    
    
    30,000106,886
    
    
    $
    94,584
 
 ITEM
3. DEFAULT UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  1.
    
    Election of six (6) Directors; and2.
    
    Ratification of the appointment of Holtz Rubenstein Reminick LLP as Milestones
independent auditors for the current fiscal year
  (1)
    
    Board of Directors
 Member
    
    Period to Serve
    
    Votes in Favor
    
    Votes Against
    
    AbstainLeonard Osser
    
    One Year
    
    
    9,045,981
    
    
    
    269,309
    
    
    
    0Joe W. Martin
    
    One Year
    
    
    9,056,314
    
    
    
    258,976
    
    
    
    0Leslie Bernhard
    
    One Year
    
    
    9,044,747
    
    
    
    270,543
    
    
    
    0Jeffrey Fuller
    
    One Year
    
    
    9,044,747
    
    
    
    268,543
    
    
    
    0Leonard M. Schiller
    
    One Year
    
    
    9,044,031
    
    
    
    271,259
    
    
    
    0Pablo F. Serna C.
    
    One Year
    
    
    9,051,481
    
    
    
    263,809
    
    
    
    0
 (2)
    
    Ratification of Holtz Rubenstein Reminick LLP as independent auditors of Milestone Scientific
Inc
 Votes in Favor
    
    Votes Against
    
    Abstain7,769,915
    
    
    
    76,158
    
    
    
    167,322
 
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
  31.1
    
    Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Chief Financial Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Chief Executive Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Chief Financial Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
 24




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MILESTONE SCIENTIFIC INC./s/ Joe W. MartinJoe W. MartinChief Executive Officer/s/ Joseph DAgostinoJoseph DAgostinoActing Chief Financial Officer  25