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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549





FORM 10-QSB





|Mark One                                         
|-------------------------------------------------
|                                                 
|x                                                
|                                                 
|For the Quarterly Period Ended September 30, 2005
|                                                 
|OR                                               
|                                                 
|o                                                




For the transition period from _________ to  _________





Commission File Number 001-14053





|MILESTONE SCIENTIFIC, INC.                               
|---------------------------------------------------------
|                                                         
|(Exact name    of Registrant as specified in its charter)




|Delaware                                                |  | 13-3545623                                
|------------------------------------------------------- |  | ------------------------------------------
|                                                        |  |                                           
|State or    other jurisdiction    or organization)      |  | (I.R.S.    Employer    Identification No.)
|                                                        |  |                                           
|220 South Orange Avenue, Livingston, New Jersey 07039  
|                                                       
|(Address    of principal executive office) (Zip Code)  
|                                                        |  |                                           
|(973) 535-2717                                         
|                                                       
|(Registrants    telephone number, including area code)
|                                                        |  |                                           

Indicate by  check mark whether the Registrant (1) has filed all reports required to be  filed by Section 13 or 15(d) or 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.





YesNo





As of November 14, 2005, the Registrant had a  total of 11,510,072 shares of Common Stock, $.001 par value, outstanding.





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FORWARD LOOKING STATEMENTS





When used in this Quarterly Report on Form 10-QSB, 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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MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES





I N D E X





|               |                          |                                                                                                                                        | PAGE
|-------------- | ------------------------ | -------------------------------------------------------------------------------------------------------------------------------------- | ----
|               |                          |                                                                                                                                        |     
|PART I         | FINANCIAL    INFORMATION |                                                                                                                                       
|               |                          |                                                                                                                                       
|               | ITEM 1                   | Condensed    Consolidated Financial Statements (unaudited)                                                                             |     
|               |                          |                                                                                                                                        |     
|               |                          | Condensed Consolidated Balance Sheets September 30, 2005 (Unaudited)    and December 31, 2004                                          | 4   
|               |                          |                                                                                                                                        |     
|               |                          | Condensed Consolidated Statements of Operations Three and Nine Months    Ended September 30, 2005 and 2004 (Unaudited)                 | 5   
|               |                          |                                                                                                                                        |     
|               |                          | Condensed Consolidated Statement of Changes in Stockholders Equity    (Deficiency) - Nine Months Ended September 30, 2005 (Unaudited) | 6   
|               |                          |                                                                                                                                        |     
|               |                          | Condensed Consolidated Statements of Cash Flows Nine Months Ended    September 30, 2005 and 2004 (Unaudited)                           | 7   
|               |                          |                                                                                                                                        |     
|               |                          | Notes to Condensed Consolidated Financial Statements                                                                                   | 10  
|               |                          |                                                                                                                                        |     
|               | ITEM 2                   | Managements Discussion and Analysis or Plan of Operation                                                                              | 14  
|               |                          |                                                                                                                                        |     
|               | ITEM 3                   | Controls and Procedures                                                                                                                | 21  
|               |                          |                                                                                                                                        |     
|PART II        | OTHER INFORMATION        |                                                                                                                                       
|               |                          |                                                                                                                                       
|               | ITEM 2                   | Unregistered Sales of Equity Securities and Use of Proceeds                                                                            | 22  
|               |                          |                                                                                                                                        |     
|               | ITEM 6                   | Exhibits                                                                                                                               | 23  
|               |                          |                                                                                                                                        |     
|SIGNATURES     | 24                      
|               |                          |                                                                                                                                       
|CERTIFICATIONS | 25                      




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MILESTONE  SCIENTIFIC INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED BALANCE SHEETS





|                                                                                                                                                                                                               |  | September    30,    2005 |             | December    31,    2004 * |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ----------- | ------------------------- | -
|                                                                                                                                                                                                               |  |                          |             |                           |  
|                                                                                                                                                                                                               |  | (Unaudited)              |             |                           |  
|ASSETS                                                                                                                                                                                                         |  |                          |             |                           |  
|Current Assets:                                                                                                                                                                                                |  |                          |             |                           |  
|Cash    and cash equivalents                                                                                                                                                                                   |  | $                        | 3,651,943   |                           | $
|Accounts    receivable, net of allowance for doubtful accounts of $31,720 in 2005 and
$24,903 in 2004                                                                                                          |  |                          | 633,035     |                           |  
|Royalty    receivable                                                                                                                                                                                          |  |                          | 252,842     |                           |  
|Inventories                                                                                                                                                                                                    |  |                          | 1,309,940   |                           |  
|Advances    to contract manufacturer                                                                                                                                                                           |  |                          | 320,216     |                           |  
|Prepaid    expenses                                                                                                                                                                                            |  |                          | 102,755     |                           |  
|                                                                                                                                                                                                               |  |                          |             |                           |  
|Total    current assets                                                                                                                                                                                        |  |                          | 6,270,731   |                           |  
|Investment    in distributor, at cost                                                                                                                                                                          |  |                          | 76,319      |                           |  
|Equipment,    net                                                                                                                                                                                              |  |                          | 559,358     |                           |  
|Patents,    net                                                                                                                                                                                                |  |                          | 419,709     |                           |  
|Other    assets                                                                                                                                                                                                |  |                          | 26,711      |                           |  
|                                                                                                                                                                                                               |  |                          |             |                           |  
|Totals                                                                                                                                                                                                         |  | $                        | 7,352,828   |                           | $
|                                                                                                                                                                                                               |  |                          |             |                           |  
|LIABILITIES    AND STOCKHOLDERS EQUITY                                                                                                                                                                        |  |                          |             |                           |  
|Current Liabilities:                                                                                                                                                                                           |  |                          |             |                           |  
|Accounts    payable                                                                                                                                                                                            |  | $                        | 550,741     |                           | $
|Accrued    expenses                                                                                                                                                                                            |  |                          | 256,185     |                           |  
|                                                                                                                                                                                                               |  |                          |             |                           |  
|Total    current liabilities                                                                                                                                                                                   |  |                          | 806,926     |                           |  
|Deferred    compensation payable to officer                                                                                                                                                                    |  |                          | 262,500     |                           |  
|                                                                                                                                                                                                               |  |                          |             |                           |  
|Total    liabilities                                                                                                                                                                                           |  |                          | 1,069,426   |                           |  
|                                                                                                                                                                                                               |  |                          |             |                           |  
|Stockholders Equity:                                                                                                                                                                                          |  |                          |             |                           |  
|Preferred    stock, par value $.001; authorized 5,000,000 shares 8% cumulative convertible    preferred stock, par value $.001; authorized, issued and outstanding, 25,365    shares                           |  |                          | 25          |                           |  
|Common    stock, par value $.001; authorized 50,000,000 shares; 11,466,024 shares    issued
and 11,432,691 shares outstanding in 2005, and 9,824,287 shares issued    and
9,790,954 shares outstanding in 2004 |  |                          | 11,466      |                           |  
|Additional    paid-in capital                                                                                                                                                                                  |  |                          | 56,661,074  |                           |  
|Accumulated    deficit                                                                                                                                                                                         |  |                          | (49,477,647 | )                         |  
|Treasury    stock, at cost, 33,333 shares                                                                                                                                                                      |  |                          | (911,516    | )                         |  
|                                                                                                                                                                                                               |  |                          |             |                           |  
|Total    stockholders equity (deficiency)                                                                                                                                                                     |  |                          | 6,283,402   |                           |  
|                                                                                                                                                                                                               |  |                          |             |                           |  
|Totals                                                                                                                                                                                                         |  | $                        | 7,352,828   |                           | $
|                                                                                                                                                                                                               |  |                          |             |                           |  




See notes to Condensed Consolidated Financial  Statements





|                                                                          
|--------------------------------------------------------------------------
|*Derived from the audited    financial statements as of December 31, 2004.




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MILESTONE  SCIENTIFIC INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004  (Unaudited)





|                                                                        |  | Three    Months Ended    |            | Nine    Months Ended     |  
|----------------------------------------------------------------------- |  | ------------------------ | ---------- | ------------------------ | -
|                                                                        |  |                          |            |                          |  
|                                                                        |  | September    30,    2005 |            | September    30,    2004 |  
|                                                                        |  |                          |            |                          |  
|Products sales, net                                                     |  | $                        | 1,567,382  |                          | $
|Royalty income                                                          |  |                          | 252,842    |                          |  
|                                                                        |  |                          |            |                          |  
|Total revenue                                                           |  |                          | 1,820,224  |                          |  
|                                                                        |  |                          |            |                          |  
|                                                                        |  |                          |            |                          |  
|Cost of products sold                                                   |  |                          | 643,426    |                          |  
|Royalty expense                                                         |  |                          | 30,341     |                          |  
|                                                                        |  |                          |            |                          |  
|Total cost of revenue                                                   |  |                          | 673,767    |                          |  
|                                                                        |  |                          |            |                          |  
|                                                                        |  |                          |            |                          |  
|Gross profit                                                            |  |                          | 1,146,457  |                          |  
|                                                                        |  |                          |            |                          |  
|Selling, general and    administrative expenses                         |  |                          | 1,738,286  |                          |  
|Research and development    expenses                                    |  |                          | 53,678     |                          |  
|                                                                        |  |                          |            |                          |  
|                                                                        |  |                          | 1,791,964  |                          |  
|                                                                        |  |                          |            |                          |  
|                                                                        |  |                          |            |                          |  
|Loss from operations                                                    |  |                          | (645,507   | )                        |  
|                                                                        |  |                          |            |                          |  
|Other income (expense)                                                  |  |                          |            |                          |  
|Interest    income                                                      |  |                          | 33,132     |                          |  
|Interest    expense                                                     |  |                          |           |                          |  
|                                                                        |  |                          |            |                          |  
|Other    income (expense) net                                           |  |                          | 33,132     |                          |  
|                                                                        |  |                          |            |                          |  
|Net Loss                                                                |  |                          | (612,375   | )                        |  
|                                                                        |  |                          |            |                          |  
|Dividends applicable to    preferred stock                              |  |                          | (507       | )                        |  
|                                                                        |  |                          |            |                          |  
|Net loss applicable to    common stockholders                           |  | $                        | (612,882   | )                        | $
|                                                                        |  |                          |            |                          |  
|Loss    per share applicable to common stockholders - basic and diluted |  | $                        | (0.05      | )                        |  
|                                                                        |  |                          |            |                          |  
|Weighted    average shares outstanding - basic and diluted              |  |                          | 11,366,617 |                          |  
|                                                                        |  |                          |            |                          |  




See Notes to Condensed Consolidated Financial  Statements





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MILESTONE  SCIENTIFIC, INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY  (DEFICIENCY)  NINE MONTHS ENDED SEPTEMBER 30, 2005  (Unaudited)





|                                                                          |  | Preferred Stock |        | Common Stock |   | Additional    Paid-in Capital |                     |        |                |  |   |        |       |   |            | 
|------------------------------------------------------------------------- |  | --------------- | ------ | ------------ | - | ----------------------------- | ------------------- | ------ | -------------- |  | - | ------ | ----- | - | ---------- | 
|                                                                          |  |                 |        |              |   |                               | Accumulated Deficit |        | Treasury Stock |  |   |        |      
|                                                                          |  | Shares          |        | Amount       |   | Shares                        |                     | Amount |                |  |   |        | Total |  
|                                                                          |  |                 |        |              |   |                               |                     |        |                |  |   |        |       |   |            | 
|Balance, January 1, 2005                                                  |  |                 | 25,365 |              | $ | 25                            |                     |        | 9,824,287      |  | $ | 9,824  |       | $ | 52,618,913 | 
|Common stock and options    issued for payments of patent rights acquired |  |                 |        |              |   |                               |                     |        | 43,424         |  |   | 44     |       |   | 87,289     | 
|Common stock issued for    payment of vendor services                     |  |                 |        |              |   |                               |                     |        | 78,717         |  |   | 79     |       |   | 176,296    | 
|Common stock and options    issued for payment of consulting services     |  |                 |        |              |   |                               |                     |        | 139,362        |  |   | 140    |       |   | 211,917    | 
|Common stock issued for    payment of employee compensation               |  |                 |        |              |   |                               |                     |        | 23,461         |  |   | 23     |       |   | 39,978     | 
|Common stock issued for    exercised option                               |  |                 |        |              |   |                               |                     |        | 333            |  |   | 0      |       |   | 749        | 
|Proceeds from equity    financings, net                                   |  |                 |        |              |   |                               |                     |        | 1,356,440      |  |   | 1,356  |       |   | 3,525,932  | 
|Net loss                                                                  |  |                 |        |              |   |                               |                     |        |                |  |   |        |       |   |            | 
|                                                                          |  |                 |        |              |   |                               |                     |        |                |  |   |        |       |   |            | 
|Balance, September 30, 2005                                               |  |                 | 25,365 |              | $ | 25                            |                     |        | 11,466,024     |  | $ | 11,466 |       | $ | 56,661,074 | 
|                                                                          |  |                 |        |              |   |                               |                     |        |                |  |   |        |       |   |            | 




See Notes to Condensed Consolidated Financial  Statements





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MILESTONE  SCIENTIFIC INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004  (Unaudited)





|                                                                               |  | 2005 |            | 2004 |  
|------------------------------------------------------------------------------ |  | ---- | ---------- | ---- | -
|                                                                               |  |      |            |      |  
|Cash flows from operating    activities:                                       |  |      |            |      |  
|Net loss                                                                       |  | $    | (2,281,108 | )    | $
|Adjustments to reconcile    net loss to net cash used in operating activities: |  |      |            |      |  
|Depreciation                                                                   |  |      | 74,457     |      |  
|Amortization    of debt discount and deferred financing costs                  |  |      |           |      |  
|Amortization    of patents                                                     |  |      | 13,468     |      |  
|Common    stock and options issued for compensation and consulting services    |  |      | 428,433    |      |  
|Bad    debt expense                                                            |  |      | 6,817      |      |  
|Changes    in operating assets and liabilities:                                |  |      |            |      |  
|(Increase)    in accounts receivable                                           |  |      | (218,513   | )    |  
|(Increase)    in royalty receivable                                            |  |      | (252,842   | )    |  
|(Increase)    in inventories                                                   |  |      | (373,719   | )    |  
|(Increase)    decrease in advances to contract manufacturer                    |  |      | (258,182   | )    |  
|Decrease    in prepaid expenses                                                |  |      | 1,807      |      |  
|(Increase)    decrease in other assets                                         |  |      | (6,303     | )    |  
|Increase    (decrease) in accounts payable                                     |  |      | 76,666     |      |  
|(Decrease)    in accrued interest                                              |  |      |           |      |  
|Increase    in accrued expenses                                                |  |      | 31,636     |      |  
|Increase    (decrease) in deferred compensation                                |  |      | 112,500    |      |  
|                                                                               |  |      |            |      |  
|Net    cash used in operating activities                                       |  |      | (2,644,883 | )    |  
|                                                                               |  |      |            |      |  
|Cash flows from investing    activities:                                       |  |      |            |      |  
|Payment    for capital expenditures                                            |  |      | (21,552    | )    |  
|Payment    for patent rights                                                   |  |      | (244,602   | )    |  
|Payment    for investment in distributor                                       |  |      | (6,363     | )    |  
|                                                                               |  |      |            |      |  
|Net    cash used in investing activities:                                      |  |      | (272,517   | )    |  
|                                                                               |  |      |            |      |  
|Cash flows from financing    activities:                                       |  |      |            |      |  
|Proceeds    from equity financings, net                                        |  |      | 3,527,288  |      |  
|Proceeds    from exercise of option                                            |  |      | 749        |      |  
|Payments    of note payable - officer/stockholder                              |  |      |           |      |  
|                                                                               |  |      |            |      |  
|Net    cash provided by financing activities                                   |  |      | 3,528,037  |      |  
|                                                                               |  |      |            |      |  
|NET INCREASE IN CASH AND    CASH EQUIVALENTS                                   |  |      | 610,637    |      |  
|Cash and cash equivalents    beginning of period                               |  |      | 3,041,306  |      |  
|                                                                               |  |      |            |      |  
|Cash and cash equivalents    end of period                                     |  | $    | 3,651,943  |      | $
|                                                                               |  |      |            |      |  
|Supplemental disclosure of    cash flow information:                           |  |      |            |      |  
|Cash    paid during the period for interest                                    |  | $    |           |      | $
|                                                                               |  |      |            |      |  




See Notes to Condensed Consolidated Financial  Statements





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MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF CASH FLOWS   NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004(Unaudited)





Supplemental schedule of non-cash investing  and financing activities:





Pursuant  to a technology agreement to provide Milestone with patent rights, in the first  quarter of 2005, Milestone issued 43,424 shares valued at $70,000 to the  Companys outside director of clinical affairs.





In  the first quarter of 2005, Milestone issued a total of 29,043 shares valued at  $72,000 (of which $53,666 was expensed in the nine months ended September 30,  2005) to five consultants in satisfaction of various consulting agreements.





In  the first quarter of 2005, we issued a total of 16,026 shares valued at $33,333  to a former employee as part of a severance agreement and a current employee as  bonus.





In  the three months ended March 31, 2005, Milestone issued 38,730 shares to a  vendor in satisfaction of $100,000 of payables owed in connection with  warehousing and fulfillment services rendered.





On  April 4, 2005, Milestone completed a $2,999,996 private placement of 101,044  units to accredited investors. Each unit consists of 10 shares of common stock  and two warrants.  Proceeds from the  private placements were recorded net of a 7% placement agent fee of $209,978  and other offering expenses totaling $59,784.





On  June 27, 2005 Milestone issued 7,435 shares valued at $20,000 to an employee as  part of annual compensation (of which $6,668 was expensed in the nine-month  period ended September 30, 2005).In the second quarter of 2005, Milestone  issued a total of 70,319 shares valued at $200,000 to two consultants (of which  $90,929 was expensed in the nine months ended September 30, 2005) for  professional service rendered in April and for advertising and marketing  services to be rendered in a twelve-month period ending March 30, 2006.





On  June 16, 2005 Milestone issued 8,333 options valued at $17,333 to the Companys  outside director of clinical affairs in consideration of newly granted patent  rights.





On  June 30, 2005, Milestone completed an $847,960 private placement of 34,000  units to accredited investors. Each unit consists of 10 shares of common stock  and two warrants.  Proceeds from this private  placement were recorded net of a fee of $50,878 and 600 identical units to the  investment adviser. Dynamic Decisions acted as investment adviser to Milestone  in this transaction and received a fee of $50,878 and 600 Units, which are  substantially the same form as those issued to the investors.  Total proceeds from this private placement,  after commissions and other expenses, were $797,054.





On  August 31, 2005 we issued 40,000 shares valued at $100,000 (of which $4,167 was  expensed in the nine months ended September 30, 2005) to a marketing and sales  consultant to aid in the international sale and distribution of CoolBlue  Wanddental enhancement system.





In  the third quarter of 2005, Milestone issued a total of 39,987 shares to two  vendors in satisfaction of $76,375 of payables owed in connection with  exhibition facilities and warehousing services rendered.





Operations  for the nine months ended September 30, 2005 include an expense of $63,295 for  amortization of options issued in 2002 and 2004.





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In  February 2004, Milestone issued 335,614 units in consideration for notes  payable and accrued interest due to an officer and a shareholder of $1,604,204,  accounts payable due to outside legal counsel of $200,000 and deferred  compensation to an officer of $384,000. Each unit consisted of 2 shares of  Milestones common stock (671,228 shares of common stock) and a warrant.





As  part of its payment for services in connection with the February 2004 public  offering, Milestone issued  to its outside general counsel 5-year options to purchase 160,000 shares of  common stock at an exercise price of $3.26 per share and warrants to purchase  80,000 shares of common stock at an exercise price of $4.89.





In  April 2004, pursuant to an agreement to purchase media placement services, the  Company issued 1,106 shares of common stock valued at $2,500.





In  May 2004, the Company issued 1,133 options for consulting services valued at  $1,548 which was recognized as expense during the period.





In  September 2004, in consideration for payment of $70,411 of accounts payable,  the Company issued 36,331 shares of common stock to L. C. Mold Inc.





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MILESTONE SCIENTIFIC  INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED  FINANCIAL STATEMENTS (Unaudited)





|Note    1 - Summary of accounting policies:
|-------------------------------------------
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|Note    2  Private Placements             
|                                           
|                                           
|                                           
|                                           
|                                           
|Note 3  - Royalty Receivable:              
|                                           
|                                           
|                                           
|Note 4 -    Inventories:                   
|                                           
|                                           




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|Note 5 -    Basic and diluted net loss per common share:
|--------------------------------------------------------
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|Note    6  Significant Customer:                       
|                                                        
|                                                        
|                                                        
|Note 7  Employee Stock    Option Plan                  
|                                                        
|                                                        




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|                                                                                                                          |  | Three    Months Ended    September 30, |          | Nine    Months Ended     September 30, |  
|------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------- | -------- | -------------------------------------- | -
|                                                                                                                          |  |                                        |          |                                        |  
|                                                                                                                          |  | 2005                                   |          | 2004                                   |  
|                                                                                                                          |  |                                        |          |                                        |  
|Net loss applicable to common    stockholders, as reported                                                                |  | $                                      | (612,882 | )                                      | $
|Deduct total stock-based employee    compensation expenses determined under the fair value based method for all    awards |  |                                        | 615      |                                        |  
|                                                                                                                          |  |                                        |          |                                        |  
|Net loss applicable to common    stockholders, pro forma                                                                  |  | $                                      | (613,497 | )                                      | $
|                                                                                                                          |  |                                        |          |                                        |  
|Loss per share applicable to common stockholders:                                                                         |  |                                        |          |                                        |  
|Basic and diluted                                                                                                         |  |                                        |          |                                        |  
|As reported                                                                                                               |  | $                                      | (0.05    | )                                      | $
|                                                                                                                          |  |                                        |          |                                        |  
|Pro forma                                                                                                                 |  | $                                      | (0.05    | )                                      | $
|                                                                                                                          |  |                                        |          |                                        |  




|                                                              | The fair value of each    option granted is estimated on the date of the grant using the Black-Scholes    option pricing model with the following assumptions used for the grants in    the quarters ended September 30, 2005 and 2004, respectively: dividend yield    of 0%; expected volatility of 149.29% and 90%; risk free interest rate of    4.02% and 2.5%; and expected lives of 8 years and 3 years.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                              | During the nine months    ended September 30, 2005, Milestone issued 80,000 stock options to employees    at an exercise price of $3.27.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Note 8  Agreements to    Issue Common Stock and Stock Option
|                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                              | On    May 18, 2005, Milestone issued to Ionic White, Inc., its marketing partner    for a consumer tooth whitening product, 3-year options to purchase 100,000    shares of Milestone common stock at $4.89 per share.  The options are not exercisable unless the    marketing partner purchases at least 2,000,000 starter kits for the    registrants consumer tooth whitening system during the twelve month period    beginning July 1, 2005.  If 2,000,000    starter kits are purchased during that period, options to purchase 10,000    shares become exercisable.  If    2,500,000 starter kits are purchased during that period, options to purchase    an aggregate of 50,000 shares become exercisable.  If 3,000,000 starter kits are purchased during that period,    options to purchase all 100,000 shares become exercisable.
|                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                              | Under    a previous agreement, Ionic White, Inc., agreed to purchase 500,000 shares of    Milestone common stock in quarterly installments of 125,000 shares within 10    days after the end of each of the four fiscal quarters commencing July 1,    2005.  Milestone is not required to    sell these shares unless Ionic White has purchased at least 625,000 starter    kits in the first quarter, at least 1,250,000 starter kits in the first two    quarters and at least 1,875,000 starter kits in the first three    quarters.  Further, at Milestones    option, all shares previously purchased must be returned to Milestone and all    monies paid to Milestone returned to Ionic White if it has not purchased an    aggregate of at least 3,000,000 starter kits for the twelve-month period    ending June 30, 2006.          
|                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                              | On    September 30, 2005 this agreement was amended to defer for an additional    quarter the commencement date for Ionic Whites commitment to purchase    stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                              | On    August 12, 2005 Milestone engaged a special marketing and sales consultant to    aid in the international sale and distribution ofCoolBlue Wanddental    enhancement system, particularly in its applications for professional tooth    whitening.  As part of the    compensation for a two-year consulting service, Milestone issued 40,000    shares of common stock valued at $100,000 to the consultant.                                                                                                                                                                                                                                                                                                                                                                                                                            




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| | In    addition, if as a result of the consultants efforts, Milestone is able to    establish distribution relationships, on terms and conditions satisfactory to    Milestone, with one of the four top world-wide distributors of dental    products, or other major distributors as are acceptable to Milestone, and    Milestone sells such distributors $3,000,000 of product within 18 months    commencing August 12, 2005, Milestone will pay the consultant a $20,000    bonus, in shares of Milestone common stock, valued based on the then current    market value.  Furthermore, at    Milestones option, all shares of common stock issued to the consultant must    be returned to Milestone if the consultant has not arranged a meeting with a    major distributor within a specified period.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




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ITEM  2.  Managements Discussion and Analysis  or Plan of Operation.





OVERVIEW





You  should read the following discussions of our financial condition and results of  operations in conjunction with the financial statements and the notes to those  statements included elsewhere in this Form 10-QSB. This discussion may contain  forward-looking statements that involve risks and uncertainties. Our actual  results may differ materially from those anticipated in these forward-looking  statements as a result of certain factors, such as those set forth in our Form  10K-SB for the year ended December 31, 2004.





Milestone  has succeeded in improving its liquidity by acquiring the capital necessary to  grow our business and seize the market opportunity that our proprietary  products have created. During 2004 and continuing through the first three  quarters of 2005, we have grown our revenue base both with our existing product  line and the introduction of new products.





Most of our
revenues continue to be generated through sales of our CompuDent system
and The Wand disposable handpiece used with that system. Revenues have
been earned domestically and internationally through sales in more than 25
countries.  While worldwide revenues are growing, domestic CompuDent
and handpiece sales have provided an increasingly large portion of our revenues.
This is an important metric as it validates the investment made in our domestic
sales distribution organization. Additionally, we enjoy significantly higher
margins on domestic sales compared to the lower per unit and handpiece margins
we receive from our wholesale based international distribution network. We
anticipate that this growing base of new customers will generate increased
future sales of our disposable handpiece products. We also believe that our
ownership of the SafetyWand technology in light of OSHA regulations
issued pursuant to recent federal and state government legislation mandating
needle stick safety standards positions us to become a leading provider for
dentists and other health care professionals in the administration of local
anesthesia, thereby providing further revenue growth opportunities.





In  late March we launched, through widely broadcast infomercials, our consumer  tooth whitening product sold under our distributors trademark,Ionic White.  Our consumer tooth whitening product and the  CoolBlue  Professional Tooth Whitening System, complement our existing product line.  The tooth whitening market is a fast growing  dental segment and we believe that it will provide significant additional revenue  opportunities. Revenues for the second and third quarters reflect sales of Ionic White.  During the second quarter a competitor launched a confusingly similar tooth  whitening product through infomercials and retail distribution.  In April 2004, Milestone commenced an  infringement of trade dress action and the defendant has counterclaimed against  Milestone for a declaratory judgment of non-infringement.  The introduction of
this competitive product  has caused our distributor to focus its near-term marketing efforts on retail  sales.  Subsequent to the end of the  quarter, the defendant brought an action against us and our distributor to  enjoin alleged false advertising claims.   On October 31, 2005, we entered into a non-monetary Stipulation and  Order which: a) dismissed with prejudice our infringement of trade dress  claims, and b) dismissed with prejudice the false advertising claims filed by  the competitor against us and others involving the Ionic White tooth-whitening  product, and the distributor of the Ionic White product agreed to remove  certain claims from the packaging of the product.





Selling,  general and administrative expenses for the third quarter increased from last  year, reflecting our continuing enhancement of our domestic dental sales  capability and increased marketing and promotional efforts, including trade  show appearances, for our dental products. In August, we launched a consumer  focused marketing campaign through radio advertising in a test market. The  increase also reflects our continuing efforts to complete development of, and  find marketing partners for, medical devices using our advanced technology,  particularly our CompuFlo syringe pump technology.





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The  following table shows a breakdown of our product sales in each product  category, domestically and internationally, and the percentage of sales to  total product sales:





|                                   |  | Three    Months Ended |           | Nine    Months Ended  | 
|---------------------------------- |  | --------------------- | --------- | --------------------- | 
|                                   |  |                       |           |                       | 
|                                   |  | September    30, 2005 |           | September    30, 2004 | 
|                                   |  |                       |           |                       | 
|DOMESTIC                           |  |                       |           |                       | 
|CompuDent                          |  | $                     | 365,306   |                       | 
|Handpieces                         |  |                       | 749,800   |                       | 
|Other                              |  |                       | 39,624    |                       | 
|                                   |  |                       |           |                       | 
|Total Domestic                     |  | $                     | 1,154,730 |                       | 
|                                   |  |                       |           |                       | 
|INTERNATIONAL                      |  |                       |           |                       | 
|CompuDent                          |  | $                     | 100,103   |                       | 
|Handpieces                         |  |                       | 273,353   |                       | 
|Other                              |  |                       | 39,196    |                       | 
|                                   |  |                       |           |                       | 
|Total International                |  | $                     | 412,652   |                       | 
|                                   |  |                       |           |                       | 
|DOMESTIC/INTERNATIONAL    ANALYSIS |  |                       |           |                       | 
|Domestic                           |  | $                     | 1,154,730 |                       | 
|International                      |  |                       | 412,652   |                       | 
|                                   |  |                       |           |                       | 
|Total Product Sales                |  | $                     | 1,567,382 |                       | 
|                                   |  |                       |           |                       | 




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|Summary of    Significant Accounting Policies
|---------------------------------------------
|                                             
|                                             
|                                             
|Inventory                                    
|                                             
|                                             
|                                             
|Impairment of Long-Lived Assets              
|                                             
|                                             
|                                             
|Revenue Recognition                          
|                                             
|                                             




Results of Operations





The  consolidated results of operations for the nine months ended September 30, 2005  reflect growth of our user base and the initial additional expenditures  necessary to further expand our customer base both domestically and abroad.





The  following table sets forth, for the periods presented, statement of operations  data as a percentage of revenues.  The  trends suggested by this table may not be indicative of future operating  results.





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|                                                |  | Three    Months Ended |           | Nine    Months Ended  | 
|----------------------------------------------- |  | --------------------- | --------- | --------------------- | 
|                                                |  |                       |           |                       | 
|                                                |  | September    30, 2005 |           | September    30, 2004 | 
|                                                |  |                       |           |                       | 
|Products sales, net                             |  | $                     | 1,567,382 |                       | 
|Royalty income                                  |  |                       | 252,842   |                       | 
|                                                |  |                       |           |                       | 
|Total    revenue                                |  |                       | 1,820,224 |                       | 
|                                                |  |                       |           |                       | 
|Cost of products sold                           |  |                       | 643,426   |                       | 
|Royalty expense                                 |  |                       | 30,341    |                       | 
|                                                |  |                       |           |                       | 
|Total    costs                                  |  |                       | 673,767   |                       | 
|                                                |  |                       |           |                       | 
|Gross Profit                                    |  |                       | 1,146,457 |                       | 
|Selling, general and    administrative expenses |  |                       | 1,738,286 |                       | 
|Research and development    expenses            |  |                       | 53,678    |                       | 
|                                                |  |                       |           |                       | 
|Loss from operations                            |  | $                     | (645,507  | )                     | 
|                                                |  |                       |           |                       | 




Three Months ended September 30, 2005 compared to three months ended  September 30, 2004





Total
revenues for the three months ended September 30, 2005 and 2004 were $1,820,224
(product sales of $1,567,382 and royalty income of $252,842) and $1,110,043,
respectively. The amount of $252,842 or 14% of total revenues is royalty income
from granting United Systems Inc. a license to manufacture, market, and
sublicense the Ionic Whiteto the consumer market.  The
$457,339 or 41% increase in net product sales is primarily related to a 134% or
$209,347 increase in domestic CompuDent® sales and the increase in
handpiece sales of $319,136, offset by a decrease of $101,926 or 51% in
international units sales. This increase shows the effect of our investment in
our domestic sales force and marketing initiatives while maintaining a strong
presence internationally. Domestic handpiece sales increased $161,960 or 28%,
while international handpiece sales increased by $157,176 or 135%. This is the
result of innovative domestic sales programs where handpieces are bundled with
CompuDent® units at the point of sale as well as the success of the
bonded handpiece in international markets.  We believe that this will
ultimately result in a growing monthly order for handpieces as the initial
supply runs out.





For  the three months ended September 30, 2005, Milestone generated a gross profit  of $1,146,457 or 63% as compared to a gross profit of $546,313 or 49% for the  three months ended September 30, 2004. Excluding the net royalty income of  $222,501, improvement in gross profit was due to higher domestic sales in this  period, which has higher profit margins than international sales.





Selling,  general and administrative expenses for the three months ended September 30,  2005 and 2004 were $1,738,286 and $1,608,176, respectively.  The $130,110 or 8% increase is attributable  primarily to Milestones continued execution of its strategy to develop our  domestic sales force and distribution capacity.  Sales headcount increased from 4 managers, 4 inside sales  representatives, 9 sales support representatives, and 8 independent contractors  at September 30, 2004 to 2 sales managers, 20 inside sales representatives, 3  sales support representatives, and 7 independent contractors at September 30,  2005.  Accordingly, hiring and related  employee expenses including sales commissions increased by $102,074 or 16%.  Selling, marketing and advertising expenses  including related travel and tradeshows increased by $96,234 or 77%.  This reflects our aggressive
marketing  strategy to expand the domestic markets.   Legal fees increased by $89,514 or 67% primarily because of the  litigation expenses related to the action against the competitor to the Ionic White  .  Consulting expense increased by  $48,013 or 200% due to the engagement of several consultants for market  development services.





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Research and
development expenses for the three months ended September 30, 2005 and 2004 were
$53,678 and $41,679, respectively. These costs are associated with the continued
development of ourCoolBlue Tooth Whitening Systems
and CompuFlo products, and our consumer tooth whitening product sold
under our distributorsIonic Whitetrademark.





Interest  income of $33,132 was earned in the three months ended September 30, 2005  compared to $23,942 earned for the same period of the prior year due to  increased average cash balances.





There  was no interest expense for the three months ended September 30, 2005 compared  to interest expense of $3,576 for the three months ended September 30, 2004.  The difference is attributable to the completion of the amortization of debt  discount and deferred financing costs in 2004.





Net  loss for the three months ended September 30, 2005 and 2004 was $612,375 and  $1,083,176, respectively.  The decrease  of $470,801 or 43% is primarily because of the increase in total revenue, which  is moderately offset by the increase in operating expenses.





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Nine months ended September 30, 2005 compared to the nine months ended  September 30, 2004





Total  revenues for the nine months ended September 30, 2005 and 2004 were $4,954,068  and $3,392,288, respectively.  The 2005  total revenues include product sales of $4,482,016 and royalty income of  $472,052.  Total revenues increased by  $1,561,780 or 46%.  Contributing to this  increase was a $638,358 or 148% increase in domestic sales of CompuDent®units.





Gross profit
for the nine months ended September 30, 2005 and 2004 was $3,000,686 or 61% and
$1,512,874 or 45%, respectively.  The $1,487,812 or 98% increase in gross
profit was due principally to an increase in sales of domestic
CompuDent®units which has higher profit margins than international
sales, as well as the net royalty income generated by sales ofIonic
Whiteconsumer whitening products and the effect of a $101,608
inventory valuation write down in 2004 which did not recur in the 2005
period.





Selling,  general and administrative expenses for the nine months ended September 30,  2005 and 2004 were $5,194,541 and $3,804,961, respectively. The increase of  $1,389,580 or 37% in these expenses was anticipated and is consistent with  managements stated strategy of investing in revenue generating areas of the  business. Contributing to the increase was hiring and employee related expenses  related to the development of Milestones national sales force which will  benefit Milestone with additional revenues. Legal fees increased by  $170,328 or 46% primarily because of the litigation expenses related to the  action against the competitor to the Ionic White .  The increase of $52,582 or 21% in accounting fees was essentially  a result of requirements of the Sarbanes-Oxley Act. Professional fees related  to consulting services and investor relations increased by $181,936
or 78%  primarily related to the vested portion of stock options granted to outside  consultants and the engagement of several outside consultants for marketing  services.   Selling, marketing and  advertising expenses including related travel and tradeshows increased by  $235,991 or 90%.  This reflects our  aggressive marketing strategy to expand the domestic markets.





Research and
development expenses for the nine months ended September 30, 2005 and 2004 were
$155,067 and $135,300, respectively.  These costs are associated with the
continued development of our CoolBlueTooth Whitening Systems
and CompuFlo products and our consumer tooth whitening product sold
under our distributors Ionic Whitetrademark.





Interest  income of $67,814 was earned for the nine months ended September 30, 2005  compared to $64,952 interest income for the same period of the prior year.  This difference was due to the increased  average cash balances.





There  was no interest expense for the nine months ended September 30, 2005 compared  to interest expense of $67,213 for the nine months ended September 30, 2004.  The difference is attributable to the extinguishment of debt related to the  February 2004 equity placement.





For  the reasons explained above, net loss for the nine months ended September 30,  2005 decreased by $148,540 or 6% from the net loss for the nine month period  ended September 30, 2004.  The  difference is primarily a result of the increase in total revenue which is  partially offset by the increase in operating expenses.





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Liquidity and Capital Resources





Milestone  incurred net losses of approximately $2,281,000 and $2,430,000 and negative  cash flows from operating activities of approximately $2,645,000 and $3,196,000  during the nine months ended September 30, 2005 and 2004, respectively.  Milestone  improved its liquidity position with the private placement of Units completed  in April, and June, 2005, as discussed below.   We have maintained our net worth at $6,000,000 for the three consecutive  quarters ended September 30, 2005.  On  August 23, 2005, we announced that we had received notice from the American  Stock Exchange that we had regained compliance with all continued listing  requirements.   The American Stock  Exchange has removed the special symbol indicating that we were below continued  listing standards, although it will continue to monitor our compliance with  continued listing standards.  We will
continue to seek new sources of equity funding.





Private Placements





On  April 4, 2005 Milestone completed a $2,999,996 private placement of 101,044  Units to accredited investors. Each Unit consisted of 10 shares of Common Stock  and two Warrants.  Each Warrant entitles  the holder to purchase a share of Common Stock at $4.89 per share through the  close of business on February 16, 2009. I-Bankers Securities, Inc. acted as  Placement Agent for Milestone in this transaction and received a fee of  $209,978 and 101,044 Warrants identical in terms to those issued to the  investors.  The Units, which are  restricted securities and bear a restrictive legend, are subject to stop  transfer restrictions.  Total proceeds  to Milestone after commissions and other expenses were $2,730,234.





On  June 30, 2005 Milestone completed an  $847,960 private placement of 34,000 Units. Each Unit consists of 10 shares of  Common Stock and two Warrants.  Each  Warrant entitles the holder to purchase a share of Common Stock at $4.89 per  share through the close of business on February 16, 2009.  Dynamic Decisions acted as Placement Agent  for Milestone in this transaction and received a fee of $50,878 and 600 Units,  which are substantially the same form as those issued to the investors.  Total proceeds from this private placement,  after commissions and other expenses, were $797,054.





Cash flow results





As of  September 30, 2005, Milestone had cash and cash equivalents of $3,651,943 and  working capital of $5,463,805.





For the nine months ended September 30, 2005, Milestones net cash used in  operating activities was $2,644,883. This was attributable to a net loss of  $2,281,108 adjusted for noncash items totaling $523,175 and an increase in  operating assets net of operating liabilities of $886,950.





For the nine months ended September 30, 2005, Milestone used $272,517 in  investing activities. This was primarily attributable to the purchase of patent  rights for $145,000and $99,602 of legal fees related to new patent applications.  Capital expenditures of $21,552 were  primarily for the purchase of molds and tooling for new products.





For  the nine months ended September 30, 2005, Milestone generated $3,528,037 from  financing activities relating to the private placements discussed above and an  employee option exercise.





Management  believes that it has sufficient resources to meet its obligations over the next  twelve months.





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ITEM 3.  CONTROLS AND PROCEDURES





| | a) | Evaluation of    Disclosure Controls and Procedures.  Milestones management, with the participation of our chief    executive officer and the chief financial officer, carried out an evaluation    of the effectiveness of our disclosure controls and procedures (as defined    in the Securities Exchange Act of 1934 (the Exchange Act) Rules 13a-15(e)    as of the end of the period covered by this report (the Evaluation    Date).  Based upon that evaluation,    the chief executive officer and chief financial officer concluded that, as of    the Evaluation Date, our disclosure controls and procedures are effective to    ensure that information required to be disclosed by us in the reports that we    file or submit under the Exchange Act is recorded, processed, summarized and    reported, within the time periods specified in the SECs rules and    forms.  Information required to be    disclosed by
us in the reports we file or submit under the Exchange Act is    accumulated and communicated to our management, including our principal    executive and principal financial officers, as appropriate to allow timely    decisions regarding required disclosure.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | b) | Changes in Internal Control over Financial Reporting.There were no changes in our internal controls over financial    reporting that occurred during the period covered by this report that have    materially affected, or are reasonably likely to materially affect,    Milestones internal control over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               




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PART II





ITEM  2.          UNREGISTERED SALES  OF EQUITY SECURITIES AND USE OF PROCEEDS





Recent Sales of  Unregistered Securities





On  August 12, 2005, we issued to a nominee of certain partners of Milestones  legal counsel, 8-year options to buy shares of our common stock at an exercise  price of $4.37 per share for services.   The options are exercisable in accordance with their terms for up to a  maximum of 1/3 of the shares covered commencing on January 1, 2006 and for an  additional 1/3 of the shares covered on each of the first two anniversaries  thereof.





On  August 31, 2005 we issued 40,000 shares valued at $100,000 to a marketing and  sales consultant to aid in the international sale and distribution of CoolBlue  Wanddental enhancement system.





On  September 30, 2005 we issued a total of 39,987 shares valued at $76,375 to two  vendors in satisfaction of payables owed in connection with exhibition  facilities and warehousing services rendered.





All  the above issuances were acquired for investment by accredited investors and  were issued without registration under the Securities Act of 1933, as amended,  pursuant to the exemptions provided under sections 4(6), 4(2).  All the securities are restricted securities  and bear a restrictive legend and are subject to stop transfer  restrictions.





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ITEM 6.                 EXHIBITS





|EXHIBIT    NO.     |  | DESCRIPTION                                                                                                         
|------------------ |  | --------------------------------------------------------------------------------------------------------------------
|                   |  |                                                                                                                     
|3.1                |  | Certificate of    Incorporation of Milestone (1)                                                                    
|3.2                |  | Certificate of Amendment    filed July 13, 1995 (2)                                                                 
|3.3                |  | Certificate of Amendment    filed December 6, 1996 (3)                                                              
|3.4                |  | Certificate of Amendment    filed December 17, 1997 (4)                                                             
|3.5                |  | Certificate of Amendment    filed July 23, 2003 (5)                                                                 
|3.6                |  | Certificate of Amendment    filed January 8, 2004. (5)                                                              
|3.7                |  | Certificate of Designation    filed January 15, 2004 (5)                                                            
|3.8                |  | By-laws of Milestone (1)                                                                                            
|                   |  |                                                                                                                     
|4.1                |  | Specimen stock certificate    (2)                                                                                   
|4.2                |  | Intentionally Left Blank                                                                                            
|4.3                |  | Form of warrant agreement,    including form of warrant (6)                                                         
|                   |  |                                                                                                                     
|31.1               |  | Chief Executive Officer    Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.*                
|31.2               |  | Chief Financial Officer    Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.*                
|32.1               |  | Chief Executive Officer    Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002.*                
|32.2               |  | Chief Financial Officer    Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002.*                
|                   |  |                                                                                                                     
|                  
|*  Filed herewith.
|(1)                |  | Incorporated by reference    to Milestones Registration Statement on Form SB-2 No. 33-92324.                       
|                   |  |                                                                                                                     
|(2)                |  | Incorporated by reference    to Amendment No. 1 to Milestones Registration Statement on Form SB-2 No.    333-92324.
|                   |  |                                                                                                                     
|(3)                |  | Incorporated by reference    to Milestones Form 10-KSB for the year ended December 31, 1996.                       
|                   |  |                                                                                                                     
|(4)                |  | Incorporated by reference    to Milestones Form 10-KSB for the year ended December 31, 1999.                       
|                   |  |                                                                                                                     
|(5)                |  | Incorporated by reference    to Milestones Registration Statement on Form S-2 No. 333-110376, Amendment    No. 3.  
|                   |  |                                                                                                                     
|(6)                |  | Incorporated by reference    to Milestones Registration Statement on Form S-2 No. 333-110376, Amendment    No. 5.  




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SIGNATURES





In  accordance with the requirements of the Exchange Act, the registrant caused  this report to be signed on its behalf by the undersigned, thereunto duly  authorized.





|MILESTONE SCIENTIFIC INC. |  |                           
|------------------------- |  | --------------------------
|                          |  |                           
|                          |  | Registrant                
|                          |  |                           
|                          |  | /s/Leonard Osser          
|                          |  |                           
|                          |  | Leonard Osser Chairman and
|                          |  | Chief Executive Officer   
|                          |  |                           
|                          |  | /s/Rosaline Shau          
|                          |  |                           
|                          |  | Rosaline Shau             
|                          |  | Chief Financial Officer   
|                          |  |                           
|Dated: November 14, 2005  |  |                           




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