SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

Mark One

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the Quarterly Period ended September 30, 2000
-------------------------------------------------

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from _________ to ___________

Commission File Number 0-26284
                       -------

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

                  Delaware                                  13-3545623
        -------------------------------------------------------------------
        State or other jurisdiction                      (I.R.S. Employer
        of organization)                                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) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

As of November 13, 2000 the Registrant had a total of 10,652,898 shares of
Common Stock, $.001 par value, outstanding.


                                       1
<PAGE>

Forward looking statements

When used in this Quarterly Report on Form 10-Q, the words "may", "will",
"should", "expect", "believe", "anticipate", "continue", "estimate", "project",
"intend" and similar expressions are intended to identify forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act regarding events, conditions and financial trends that
may affect the Company's future plans of operations, business strategy, results
of operations and financial condition. The Company 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 the Company's reports and registration statements files with the Securities
and Exchange Commission (the "Commission"). The Company disclaims any intent or
obligation to update such forward-looking statements.


                                       2
<PAGE>

                                      INDEX

PART I.       FINANCIAL INFORMATION                                         Page

     ITEM 1.  Condensed Consolidated Financial Statements (unaudited)

              Condensed Consolidated Balance Sheets at September 30,
              2000 and December 31, 1999                                      4

              Condensed Consolidated Statements of Operations
              for the nine and three months ended September 30, 2000
              and 1999                                                        5

              Condensed Consolidated Statements of Cash Flows
              for the nine months ended September 30, 2000 and 1999           6

              Notes to Condensed Consolidated Financial Statements            8

     ITEM 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations                             13

PART II. OTHER INFORMATION

     ITEM 4.  Submission of Matters to Vote of Security Holders               20

     ITEM 6.  Exhibits and Reports on Form 8-K                                20

SIGNATURES                                                                    21


                                       3
<PAGE>

                          Part 1. Financial Information

ITEM 1. Condensed Consolidated Financial Statements

                   Milestone Scientific Inc. and Subsidiaries
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                     ASSETS                      September 30        December 31
                                                                     2000               1999
                                                                  (unaudited)             *
                                                                 --------------------------------
<S>                                                              <C>                 <C>
CURRENT ASSETS
    Cash and cash equivalents                                    $    561,104        $    242,843
    Accounts receivable                                               720,505             297,778
    Inventories                                                     1,133,118           1,717,094
    Prepaid expenses                                                  233,065             192,636
                                                                 ------------        ------------
           Total current assets                                     2,647,792           2,450,351

PROPERTY AND EQUIPMENT, NET                                         1,347,892           1,669,769

PATENTS, NET                                                        1,308,301           1,491,724

OTHER ASSETS                                                           10,318              10,318
                                                                 ------------        ------------

        Total assets                                             $  5,314,303        $  5,622,162
                                                                 ============        ============
                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable                                             $  1,023,698        $    996,120
    Accrued expenses                                                  328,169             226,390
    Accrued Interest                                                   66,905              20,063
    Notes Payable-Short Term                                          200,000                  --
    10% senior convertible notes                                      840,055                  --
                                                                 ------------        ------------

           Total current liabilities                                2,458,827           1,242,573

                                                                 ------------        ------------
NOTES PAYABLE-LONG TERM                                             1,324,094           2,250,000
                                                                 ------------        ------------

COMMITMENT AND CONTINGENCIES                                               --                  --
                                                                 ------------        ------------
STOCKHOLDERS' EQUITY
    Common stock, par value $.001; authorized,
      25,000,000 shares; 10,752,898 issued as of
      September 30, 2000 and 8,864,898 issued
      as of December 31, 1999                                          10,753               8,865
    Additional paid-in capital                                     33,578,366          30,877,375
    Accumulated deficit                                           (31,146,221)        (27,845,135)
    Treasury stock, at cost, 100,000 shares                          (911,516)           (911,516)
                                                                 ------------        ------------

           Total stockholders' equity                               1,531,382           2,129,589
                                                                 ------------        ------------

           Total liabilities and stockholders' equity            $  5,314,303        $  5,622,162
                                                                 ============        ============
</TABLE>

*Derived from audited financial statements at December 31, 1999

See notes to condensed financial statements


                                       4
<PAGE>

                   Milestone Scientific Inc. and Subsidiaries

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

               For the nine and three months ended September 30,
                                   (unaudited)

<TABLE>
<CAPTION>
                                                 Nine Months Ended                   Three Months Ended
                                                   September 30,                        September 30,
                                              2000              1999               2000              1999
                                              ----              ----               ----              ----
<S>                                      <C>                <C>                  <C>             <C>
Net Sales                                $  4,465,876       $ 2,045,210       $  1,532,079       $   511,056
Cost of sales                               2,163,252         1,044,489            891,696           227,718
                                         ------------       -----------       ------------       -----------

Gross profit                                2,302,624         1,000,721            640,383           283,338
                                         ------------       -----------       ------------       -----------
Selling, general and
   Administrative expenses                  5,012,701         5,217,767          1,552,890         1,513,148
Research and development expenses             251,014           398,180             52,064           288,724
                                         ------------       -----------       ------------       -----------
                                            5,263,715         5,615,947          1,604,954         1,801,872
                                         ------------       -----------       ------------       -----------

             Loss from operations          (2,961,091)       (4,615,226)          (964,571)       (1,518,534)

Settlement cost - Spinello lawsuit           (228,500)               --                 --                --
Loss from termination of
   Wisdom product line                             --           (76,345)                --                --
Interest expense                             (116,563)          (47,411)           (62,430)          (17,691)
Interest income                                 5,068            70,178              1,524            13,804
                                         ------------       -----------       ------------       -----------

                Net loss                 $ (3,301,086)      $(4,668,804)      $ (1,025,477)      $(1,522,421)
                                         ============       ===========       ============       ===========

Loss per share - basic and diluted       $       (.32)      $      (.54)      $       (.10)      $      (.18)
                                         ============       ===========       ============       ===========

Weighted average shares outstanding        10,435,286         8,718,054         10,652,898         8,718,393
                                         ============       ===========       ============       ===========
</TABLE>

      See notes to condensed consolidated financial statements.


                                       5
<PAGE>

                   Milestone Scientific Inc. and Subsidiaries

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                     For the nine months ended September 30,
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                  2000              1999
                                                                  ----              ----
<S>                                                           <C>               <C>
Cash flows from operating activities
   Net loss                                                   $(3,301,086)      $(4,668,804)
   Adjustments to reconcile net loss to
   net cash used in operating activities
   Amortization                                                   194,417           202,811
   Depreciation                                                   353,707           352,389
   Non cash compensation for services rendered                     95,000                --
   Non cash portion of settlement of Spinello lawsuit             203,500                --
   Changes in assets and liabilities
     Accounts receivable                                         (422,727)          279,409
     Inventories                                                  583,976          (601,865)
     Prepaid expenses                                             (40,429)          (64,912)
     Other assets                                                      --               280
     Accounts payable                                              27,578           165,464
     Accrued expenses                                             101,779            98,928
     Accrued interest                                              46,842                --
                                                              -----------       -----------

Net cash used in operating activities                          (2,157,443)       (4,236,300)
                                                              -----------       -----------
Cash flows from investing activities
     Capital expenditures                                         (31,830)          (70,181)
     Sale of treasury bills, net                                       --         2,758,174
                                                              -----------       -----------
     Net cash (used in) provided by investing activities          (31,830)        2,687,993
                                                              -----------       -----------
Cash flows from financing activities
     Net proceeds from issuance of notes                        1,840,055         2,250,000
     Proceeds from (repayments under) lines of credit             700,000          (150,000)
     Cost associated with registering shares                      (32,521)           (2,000)
                                                              -----------       -----------
     Net cash provided by financing activities                  2,507,534         2,098,000
                                                              -----------       -----------
NET INCREASE IN CASH
AND CASH EQUIVALENTS                                              318,261           549,693

Cash and cash equivalents at beginning of period                  242,843           316,706
                                                              -----------       -----------

Cash and cash equivalents at end of period                    $   561,104       $   866,399
                                                              ===========       ===========
Supplemental disclosures of cash flow information:
     Cash paid during the period for interest                 $    58,727       $       316
                                                              ===========       ===========
</TABLE>

See notes to condensed consolidated financial statements.


                                       6
<PAGE>

                   Milestone Scientific Inc. and Subsidiaries

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                  For the nine months ended September 30, 2000
                                   (unaudited)

Supplemental schedule of noncash financing activities:

On July 31, 2000, warrants to purchase 70,000 shares @ $3.00 per share were
issued in connection with the draw dawn of $500,000 of a $1,000,000 line of
credit. This resulted in a $186,900 debt discount and an equal increase in
additional paid in capital.

In December 1999, the holders of 3% Convertible Notes agreed, and in February
2000 formalized the agreement to convert at a modified price of $1.25 per share,
all $2,250,000 of such notes into 1,800,000 shares common stock.


                                       7
<PAGE>

                   Milestone Scientific Inc. and Subsidiaries

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               September 30, 2000

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

      The unaudited interim financial statements of Milestone Scientific Inc.
      and Subsidiaries (the "Company") have been prepared in accordance with
      generally accepted accounting principles for interim financial
      information. Accordingly, they do not include all of the information and
      footnotes required by generally accepted accounting principles for
      complete financial statements.

      These financial statements should be read in conjunction with the
      financial statements and notes thereto for the year ended December 31,
      1999 included in the Company's Annual Report on Form 10-KSB/A. The
      accounting policies used in preparing these financial statements are the
      same as those described in the December 31, 1999 financial statements.

      In the opinion of the Company, the accompanying unaudited financial
      statements contain all adjustments (consisting of normal recurring
      entries) necessary to present fairly the financial position as of
      September 30, 2000 and the results of operations for the three and nine
      month periods ended September 30, 2000 and September 30, 1999 and cash
      flows for the nine month periods ended September 30, 2000 and 1999,
      respectively.

      The results reported for the three and nine month periods ended September
      30, 2000 are not necessarily indicative of the results of operations,
      which may be expected for a full year.

NOTE 2 -BASIS OF PRESENTATION

      The accompanying financial statements have been prepared in conformity
      with generally accepted accounting principles, which contemplate
      continuation of the Company as a going concern. However, subsequent to its
      first fiscal quarter in 1998, the Company has incurred substantial losses
      from operations. In addition, the Company has used, rather than provided,
      cash in its operations during the nine months ended September 30, 2000.

      In view of the matters described in the preceding paragraph,
      recoverability of a major portion of the recorded asset amounts shown in
      the accompanying balance sheet is dependent upon continued operations of
      the Company, which in turn is dependent upon the success of the Company's
      Wand(R) product and the Company's ability to obtain necessary financing
      through September 30, 2001. The financial statements do not include any
      adjustments relating to the recoverability and classification of recorded
      asset amounts or amounts and classification of liabilities that might be
      necessary should the Company be unable to continue in existence.

      Based on management's belief that The Wand(R), is a major advance in
      dentistry and may ultimately become the accepted method for delivering
      local dental anesthesia, the Company continues to take steps aimed at
      growing and strengthening the end user base thereby gaining


                                       8
<PAGE>

      greater acceptance of The Wand(R) and translating to increased revenue
      through higher disposable handpiece usage. In September 2000, the Company
      unveiled two domestic sales initiatives. It introduced the Wand(R) Plus
      drive unit with several enhancements including cruise control feature.
      Secondly, dental practitioners can now avail themselves to a 90 day trial
      program, which requires a commitment to purchase specified quantities of
      disposable handpieces and needles during the trial period without any
      payment on deposit for the unit. The Company continues to sell the Wand(R)
      model and offers quantity discounts on disposable handpieces and dental
      needles under monthly buying programs. During the nine months ended
      September 30, 2000, the Company increased its sales force and customer
      service staffs to handle its new sales programs. Further, it continues to

            o     provide assistance to dental and dental hygiene schools which
                  include The Wand(R) in their curriculum;

            o     visit, obtain feedback and provide further support to current
                  Wand(R) users;

            o     distribute The Wand(R) technique videos and technical
                  bulletins to its current users;

            o     sell additional units to current Wand(R) users and

            o     develop overseas markets.

     At September 30, 2000, Milestone had $561,104 in cash, working capital of
     $188,965 and access to an additional $500,000 under a line of credit.
     Several steps have been taken to improve liquidity and meet Milestone's
     working capital needs:

            o     In April 2000, Leonard Osser, Chairman and CEO, agreed to
                  provide the following financing to Milestone:

                  o     a $200,000 line of credit under which funds can be
                        borrowed until December 31, 2000 with a maturity of
                        February 1, 2001. Borrowed funds bear interest at a 9%
                        annual interest rate;

                  o     payment guarantees on year 2000 sales to certain foreign
                        countries through two specified distributors;

                  o     the option, should the line of credit be insufficient,
                        to defer payment of his full salary until January 3,
                        2001; and

                  o     a deferral of all interest and principal payments, until
                        January 3, 2001, on $250,000 face amount of 10% Senior
                        Secured Promissory Notes which he holds.

            o     On June 19, 2000, Mr. Osser remitted $50,584 to the Company,
                  pursuant to his distributor payment guarantee.

            o     In July 2000, Milestone borrowed the $200,000 under this line
                  of credit and in August 2000, Mr. Osser deferred the remaining
                  $76,109 of his 2000 salary.

            o     In April 2000, a director and holder of $50,000 in 10% Senior
                  Secured Promissory Notes agreed to defer all interest and
                  principal payments, until January 3, 2001

            o     In August 2000, Milestone borrowed $500,000 from a major
                  existing investor, under a $1,000,000 line of credit, pursuant
                  to an agreement


                                       9
<PAGE>

                  not yet reflected in signed documents. The $500,000 loan is
                  due on June 30, 2003 and any additional loans under the line
                  of credit are due December 31, 2003. The initial loan and any
                  additional loans bear interest at 8% per annum. The investor
                  received warrants for 70,000 shares exercisable at the fair
                  market value on the date of grant of $3.00 per share and will
                  receive warrants for an additional 20,000 shares, exercisable
                  at the fair market value of the shares at the time the warrant
                  is issued, for each additional $100,000 borrowed under the
                  line of credit. Milestone, at its option, can force conversion
                  of $300,000 of the initial loan into equity in connection with
                  defined future financings.

            o     In August 2000, Milestone borrowed $1,000,000 from two funds
                  managed by Cumberland Associates LLC pursuant to a 2-year
                  secured loan, which bears interest at 20% per year and is
                  payable in kind. The loan is prepayable in cash at any time
                  and is prepayable, with accrued interest, in Milestone common
                  stock after March 31, 2001. Stock issued in payment of this
                  debt will be valued at 90% of the average closing price during
                  the first fifteen of the eighteen trading days preceding the
                  date of payment but in no event at more that $5.00, subject to
                  adjustment in the event of stock splits, stock dividends or
                  other capital changes.

      In addition to the financings described above, Milestone continues to
      explore additional equity and debt financings and is currently holding
      discussions with several additional potential investors. However, there
      can be no assurances that any of the financings now under discussion, or
      the unconsummated portion of the financings specifically described above
      will be consummated. Unless one or more of these or other financings is
      consummated, or Milestone is able to generate sufficient positive cash
      flow from operations, it may be unable to pay its obligations as they
      mature. Failure to do so could force Milestone to scale back or
      discontinue operations.

NOTE 3 - LOSS PER SHARE

      Basic loss per common share is computed using the weighted average number
      of common shares outstanding. Diluted loss per common share is computed
      using the weighted average common shares outstanding after giving effect
      to potential common stock equivalents, plus any other potentially dilutive
      securities outstanding, unless the effect is anti-dilutive.

      For the nine months ended September 30, 2000 and 1999, the assumed
      exercise of certain dilutive options and warrants were anti-dilutive.
      Accordingly, basic and diluted loss per share is based on the weighted
      average common shares outstanding.

      Options and warrants, in aggregate, to purchase 227,000 shares of common
      stock at prices ranging from .88 to $2.19 were issued to all officers and
      certain employees during the nine months ended September 30, 2000 but were
      not included in the computation of diluted loss per share because the
      effect would have been anti-dilutive.

      Options and warrants, in aggregate, to purchase 152,000 shares of common
      stock at prices ranging from $1 to $3 per share were issued during the
      nine months ended September 30,


                                       10
<PAGE>

      1999 but were not included in the computation of diluted loss per share
      because the effect would have been anti-dilutive.

NOTE 4 - LITIGATION

      Spinello Lawsuits

      In January 2000, prior to trial, Milestone settled its previously pending
      lawsuits with Dr. Spinello DDS, and former Chairman and Director of
      Research of Spintech, and Glenn Spinello in the United States District
      Court of New Jersey and in the Court of Common Pleas, York County
      Pennsylvania, respectively. As part of the settlement, Dr. Spinello and
      Glenn Spinello, each conveyed to Milestone all of their equity interests
      in Spintech. Additionally, Dr. Spinello assigned to Milestone any rights
      which he had to technology relating to "The Wand(R)" handpiece or
      technology developed while he was employed at Spintech and agreed to
      cooperate in filing and to assign to Milestone any future patent
      applications covering that technology. In return for the conveyance of
      Spintech equity, the assignment of technology, and the resolution of all
      disputes between the parties, including the discontinuance with prejudice
      of all legal actions, Milestone paid $25,000 to Dr. Spinello and issued to
      him 80,000 shares and issued 8,000 shares to Glenn Spinello. Glenn
      Spinello, Ronald Spinello's son, was the controller and a director of
      Spintech, prior to April 1997.

      Class Action Lawsuit

      In June 2000, the previously pending class action lawsuit in the United
      States District Court of New Jersey was dismissed by the Court, with
      prejudice, for failure to state a claim. No appeal was filed by the
      plaintiff prior to the expiration of the time for filing such an appeal.

      Derivative Action Lawsuit

      In August 2000, the previously pending derivative action in the Court of
      Chancery of the State of Delaware in Newcastle County, was dismissed upon
      application by the plaintiff and approved by the Court. The dismissal was
      without cost or expense to any party.

      NOTE 5 - REVOLVING CREDIT LINES and PRIVATE PLACEMENTS

      In August 2000, as detailed in Note 2, the Company borrowed $500,000 under
      a newly established $1,000,000 line of credit and borrowed $1,000,000
      pursuant to a 2-year 20% secured loan.

      In July 2000, as detailed in Note 2, the company borrowed the $200,000
      under the line of credit provided by Leonard Osser, the Chairman and CEO
      of Milestone, on April 5, 2000.


                                       11
<PAGE>

      and 9% annual interest rate for the Company through December 31, 2000.
      During the third quarter of 2000, the Company borrowed the $200,000 under
      the line of credit.

      As of February 1, 2000, the Company concluded a $1 million institutional
      private placement of 10% Senior Secured Promissory Notes due June 30, 2001
      and Warrants to purchase 142,857 shares of Milestone Common Stock with
      Cumberland Associates LLC, Strategic Restructuring Partnership L.P., a
      former principal of Cumberland Associates, two officers of the
      Corporation, an affiliate of one of its directors and six other
      individuals. The Notes are secured by all present and future inventories
      of Milestone and are prepayable out of a portion of the proceeds generated
      by sales of "Wand(R)" units. The Warrants are exercisable at prices
      increasing from $1.75 per share in the first year to $7.00 per share in
      the fifth year, subject to anti-dilution protection in the event of stock
      dividends and certain capital changes. Purchasers of the Warrants were
      granted rights to participate in certain future security offerings by
      Milestone. Furthermore, on April 5, 2000, the Chairman and CEO of
      Milestone, Leonard Osser and one other participant in the private
      placement agreed to amend the Company's promissory note agreement so as to
      defer all payments including interest until January 3, 2001. These notes
      comprised $300,000 of the $1,000,000 private placement.

      In March 1999, the Company had concluded a $2 million institutional
      private placement with Cumberland Partners, other investment funds managed
      by or affiliated with Cumberland Associates and certain principals of
      Cumberland Associates. An additional $250,000 was raised from the Chairman
      and Chief Executive Officer of Milestone, on the same terms and
      conditions. The investors purchased, at face value, 3% Senior Convertible
      Notes Due 2003, convertible into Milestone Common Stock.

      In December 1999, the holders of the 3% Convertible Notes agreed to accept
      1,800,000 shares in full payment and satisfaction and in conversion of all
      $2,250,000 of such notes. Of the 1,800,000 shares, which were to be
      issued, only the 200,000 shares to Mr. Osser were held in escrow and
      pending shareholder approval. The latter shares were approved for
      distribution by the Milestone shareholders at the Annual Stockholder's
      Meeting on July 13, 2000. The Company recognized a non cash debt
      conversion expense of $731,250 in the fourth quarter of 1999.


                                       12
<PAGE>

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation

      During the nine months ended September 30, 2000, the Company took
      significant steps to grow The Wand(R) ownership base and increase the
      daily utilization by domestic dentists. It increased the direct sales
      force from 3 to 12 and the Company's presence at national, regional and
      local trade shows as part of its direct sales approach.

      Internationally, the Company established additional distribution
      agreements which provided for the sale of The Wand(R) in Canada and
      throughout Central and South America. Also, the Company received approval
      to sell The Wand(R) and its disposable handpieces in Japan.

      Furthermore, during this period of time, the Company received approval
      from the FDA to market the Wand(R) to medical practitioners, $2,000,000
      was raised through a private placement, lines of credit totaling
      $1,200,000 were established and the Spinello lawsuit was settled.

Three months ended September 30, 2000 compared to three months ended September
30, 1999

Statement of Operations

      Net sales for the three months ended September 30, 2000 and September 30,
      1999 were $1,532,079 and $511,056, respectively. The $1,021,023 or 200%
      increase reflects a ten fold aggregate increase in The Wand(R) unit sales
      for foreign distribution including Canada and the initial shipment of
      1,000 units for distribution in Mexico. The increase in net sales also
      includes an approximate 70% increase in domestic sales of The Wand(R) and
      a 39% increase in domestic sales of its disposable handpiece. For the
      three months ended September 30, 2000, domestic sales of Wand(R) units
      increased by 79 to 192 and domestic disposable handpiece sales increased
      by 132,800 to 475,750 when compared to the same period in 1999. $8,000 was
      generated from the disposable handpieces and needles sales associated with
      the 120 Wand(R) units placed (but not sold) in September under the
      Company's new 90-day trial program.

      Cost of sales for the three months ended September 30, 2000 and September
      30, 1999 were $891,696 and $227,718, respectively. The $663,978 increase
      is mainly attributable to an increase in Wand(R) unit and disposable
      handpiece sales volume as well as an increase in manufacturing costs due
      to the disposable handpiece design enhancements introduced during the
      fourth quarter of 1999. The increase was partially offset by the recovery
      of approximately $204,000 in previously written down finished goods
      inventory.

      For the three months ended September 30, 2000, the Company generated a
      gross profit of $640,383 as compared to a gross profit of $283,338 for the
      three months ended September 30, 1999. The increase in gross profit is
      attributable to increased sales volume.

      Selling, general and administrative expenses for the three months ended
      September 30, 2000 and 1999 were $1,552,890 and $1,513,148, respectively.
      The $39,742 increase is mainly attributable to $95,000 in expenses
      representing the cumulative impact of warrants revalued


                                       13
<PAGE>

      in conjunction with the first quarter private placement and by a $151,000
      aggregate increase in selling and marketing expenses associated with the
      Wand(R) as the Company increased its sales force, customer service staff
      and its trade show presence. These increases were partially offset by a
      $77,000 decrease in legal expenses, and a $147,000 decrease in consulting
      expenses.

      Research and development costs for the three months ended September 30,
      2000 and September 30, 1999 were $52,064 and $288,724, respectively. The
      $236,660 difference is the result of higher costs incurred during the
      third quarter of 1999 which were associated with the development of
      product improvements.

      The loss from operations for the three months ended September 30, 2000 and
      September 30, 1999 were $964,571 and $1,518,534, respectively.

      The Company incurred interest expenses of $62,430 for the three months
      ended September 30, 2000 as compared to $17,691 of interest for the same
      period for calendar 1999. The $44,741 difference is attributable to higher
      average borrowings and $10,994 in amortization of the debt discount
      associated with the detachable warrants from the $1,000,000 credit line
      established in August, 2000. Interest income generated from treasury bills
      during the third quarter of 1999 accounted for the $12,280 decline in
      interest income for the three months ended September 30, 2000.

      The net loss for the three months ended September 30, 2000 was $1,025,477
      as compared to a net loss of $1,522,421 for the quarter ended September
      30, 1999. The $496,944 reduction in net loss is attributable to higher
      sales volume for The Wand(R) and its disposable handpiece. This was
      partially offset by as increase in selling general and administrative
      expenses and an increase in interest expenses and a decrease in interest
      income.

Nine months ended September 30, 2000 compared to nine months ended September 30,
1999

Statement of Operations

      Net sales for the nine months ended September 30, 2000 and September 30,
      1999 were $4,465,876 and $2,045,210, respectively. The $2,420,666 or 118%
      increase reflects an approximate 214% increase in domestic sales of The
      Wand(R) and a 65% increase in domestic sales of its disposable handpiece.
      For the nine months ended September 30, 2000, domestic sales of Wand(R)
      units increased by 933 to 1,369 and domestic disposable handpieces sales
      increased by 540,750 to 1,373,250 when compared to the same period in
      1999. The increase in net sales also includes a 197% aggregate increase in
      Wand(R) unit sales for foreign distributions. The increase in foreign
      sales includes the shipment of 1000 Wand(R) units and approximately
      100,000 disposable handpieces to the Company's authorized dealer in Japan.
      It also includes 2,100 Wand(R) units and 121,000 disposable handpieces for
      distribution in Brazil and Mexico. These increases were partially offset
      by $174,086 of net sales generated from the discontinued Wisdom toothbrush
      line during the first nine months of 1999.

      Cost of sales for the nine months ended September 30, 2000 and September
      30, 1999 were $2,163,252 and $1,044,489, respectively. The $1,118,763
      increase is mainly attributable to an increase in Wand(R) unit and
      disposable handpiece sales partially offset by the recovery of


                                       14
<PAGE>

      approximately $374,000 in previously written down finished goods
      inventory and the $152,230 in cost of sales during the first half of 1999
      which related to the discontinued Wisdom product line.

      For the nine months ended September 30, 2000, the Company generated a
      gross profit of $2,302,624 or 51.6% as compared to a gross profit of
      $1,000,721 or 48.9% for the nine months ended September 30, 1999.

      Selling, general and administrative expenses for the nine months ended
      September 30, 2000 and 1999 were $5,012,701 and $5,217,767, respectively.
      The $205,066 decrease is attributable to a $224,000 decrease in legal
      expenses, a $136,000 decrease in consulting expenses, and $74,767 in 1999
      expenses related to the discontinued Wisdom products, partially offset by
      an $88,000 aggregate increase in selling and marketing expenses associated
      with The Wand(R) and $95,000 in expenses representing the cumulative
      impact of warrants revalued in conjunction with the first quarter private
      placement.

      Research and development costs for the nine months ended September 30,
      2000 and September 30, 1999 were $251,014 and $398,180, respectively. The
      $147,166 difference is primarily attributable to a decrease in costs
      associated with product improvements.

      The loss from operations for the nine months ended September 30, 2000 and
      September 30, 1999 were $2,961,091 and $4,615,226, respectively.

      The Company incurred interest expenses of $116,563 for the nine months
      ended September 30, 2000 as compared to $47,411 of interest expense for
      the same period for calendar 1999. The $69,152 difference is attributable
      to a higher average interest rate on lower average borrowings in 2000 and
      $10,994 in amortization of the debt discount associated with the
      detachable warrants from the $1,000,000 credit line established in August,
      2000. Interest income generated from treasury bills during the first nine
      months of 1999 as compared to mininal investments during the same period
      in 2000, accounted for the $65,110 decrease in interest income for the
      nine months ended September 30, 2000.

      In February 2000, the Company executed a settlement of the lawsuit between
      two former employees, Ronald Spinello, DDS, former Chairman and Director
      of Research of Spintech and his son, Glen Spinello. Milestone paid $25,000
      to Dr. Spinello and issued to him 80,000 shares and to Glen Spinello 8,000
      shares. Since the market price of the shares was $2.3125 per share, the
      Company recognized a $228,500 expense for the settlement.

      In April 1999, the Company discontinued its selling effort with regards to
      the Wisdom product line excluding Splatrfree(TM) prophy angles. $76,345 in
      aggregate costs were incurred in terminating the product line. They
      included $19,291 for uncollectible receivables, $15,692 in aggregate
      termination compensation and employee benefits, $5,066 for a lease buyout,
      $18,793 in previously unamortized acquisition costs, and $17,503 to write
      off inventory.

      The net loss for the nine months ended September 30, 2000 was $3,301,086
      as compared to a net loss of $4,668,884 for the nine months ended
      September 30, 1999. The $1,367,798 reduction in net loss is attributable
      to higher sales volume for The Wand(R) and its disposable handpiece, the
      recovery of a portion of previously written down inventory and a reduction
      in


                                       15
<PAGE>

      selling general and administrative expenses. This was partially offset by,
      an increase in interest expenses and a decrease in interest income.

      Liquidity and Capital Resources

      At September 30, 2000, Milestone had $561,104 in cash and working capital
      of $188,965. For the nine months ended September 30, 2000, the Company
      increased cash and cash equivalents by $318,261.

      For the nine months ended September 30, 2000, the Company's net cash used
      in operating activities was $2,157,443. This was primarily attributable to
      a net loss of $3,301,086 adjusted for non cash items of $194,417 for
      amortization, $353,707 for depreciation, $95,000 for non cash
      compensation, and $203,500 for a lawsuit settlement; a $422,727 increase
      in accounts receivable, a $583,976 decrease in inventory; a $40,429
      increase in prepaid expenses; a increase in accrued expenses of $101,779,
      a $46,842 increase in accrued interest and a $27,578 increase in accounts
      payable.

      For the nine months ended September 30, 2000, the Company used $31,830 in
      investing activities. These expenditures covered retooling cost for
      product modifications, leasehold improvements, and additional furniture
      and fixtures.

      Financing activities provided $2,507,534 for the period. The Company, as
      described below, raised $2,000,000 through private placements and has
      drawn $700,000 in aggregate from two credit lines. As of September 30,
      2000, it made $159,945 in aggregate principal payments and $23,572 in
      interest to these note holders.

      To improve liquidity and meet Milestone's working capital needs, the
      Company has taken several steps including raising additional short and
      long term funds. They are as follow:

            o     In April 2000, Leonard Osser, Chairman and CEO, agreed to
                  provide the following financing to Milestone:

                  o     a $200,000 line of credit under which funds can be
                        borrowed until December 31, 2000 with a maturity of
                        February 1, 2001. Borrowed funds bear interest at a 9%
                        annual interest rate;

                  o     payment guarantees on year 2000 sales to certain foreign
                        countries through two specified distributors;

                  o     the option, should the line of credit be insufficient,
                        to defer payment of his full salary until January 3,
                        2001; and

                  o     a deferral of all interest and principal payments, until
                        January 3, 2001, on $250,000 face amount of 10% Senior
                        Secured Promissory Notes which he holds.

            o     On June 19, 2000, Mr. Osser remitted $50,584 to the Company,
                  pursuant to his distributor payment guarantee.

            o     In July 2000, Milestone borrowed the $200,000 under this line
                  of credit and in August 2000, Mr. Osser deferred the remaining
                  $76,109 of his 2000 salary.


                                       16
<PAGE>

            o     In April 2000, a director and holder of $50,000 in 10% Senior
                  Secured Promissory Notes agreed to defer all interest and
                  principal payments, until January 3, 2001

            o     In August 2000, Milestone borrowed $500,000 from a major
                  existing investor, under a $1,000,000 line of credit, pursuant
                  to an agreement not yet reflected in signed documents. The
                  $500,000 loan is due on June 30, 2003 and any additional loans
                  under the line of credit are due December 31, 2003. The
                  initial loan and any additional loans bear interest at 8% per
                  annum. The investor received warrants for 70,000 shares
                  exercisable at the fair market value on the date of grant of
                  $3.00 per share and will receive warrants for an additional
                  20,000 shares, exercisable at the fair market value of the
                  shares at the time the warrant is issued, for each additional
                  $100,000 borrowed under the line of credit. Milestone, at its
                  option, can force conversion of $300,000 of the initial loan
                  into equity in connection with defined future financings.

            o     In August 2000, Milestone borrowed $1,000,000 from two funds
                  managed by Cumberland Associates LLC pursuant to a 2-year
                  secured loan, which bears interest at 20% per year and is
                  payable in kind. The loan is prepayable in cash at any time
                  and is prepayable, with accrued interest, in Milestone common
                  stock after March 31, 2001. Stock issued in payment of this
                  debt will be valued at 90% of the average closing price during
                  the first fifteen of the eighteen trading days preceding the
                  date of payment but in no event at more that $5.00, subject to
                  adjustment in the event of stock splits, stock dividends or
                  other capital changes.

      In addition to the financings described above and henceforth Milestone
      continues to explore additional equity and debt financings and is
      currently holding discussions with several additional potential investors.
      However, there can be no assurances that any of the financings now under
      discussion or the unconsummated portion of the financings specifically
      described above, will be consummated. Unless one or more of these or other
      financings is consummated or Milestone is able to generate sufficient
      positive cash flow from operations, it may be unable to pay its
      obligations as they mature. Failure to do so could force Milestone to
      scale back or discontinue operations.

      PRIVATE PLACEMENTS

      Prior to the $1,000,000, 2-year secured loan described above, Milestone
      had concluded $3,250,000 in private placements.

      As of February 1, 2000, the Company concluded a $1 million institutional
      private placement of 10% Senior Secured Promissory Notes due June 30, 2001
      and Warrants to purchase 142,857 shares of Milestone Common Stock with
      Cumberland Associates LLC, Strategic Restructuring Partnership L.P., a
      former principal of Cumberland Associates, two officers of the
      Corporation, an affiliate of one of its directors and six other
      individuals. The Notes are secured by all present and future inventories
      of Milestone and are prepayable out of a portion of the proceeds generated
      by sales of "Wand(R)" units. The Warrants are exercisable at prices
      increasing from $1.75 per share in the first year to $7.00 per share in
      the fifth year, subject to


                                       17
<PAGE>

      anti-dilution protection in the event of stock dividends and certain
      capital changes. Purchasers of the Warrants were granted rights to
      participate in certain future security offerings by Milestone.

      In March 1999, the Company concluded a $2 million institutional private
      placement with Cumberland Partners, other investment funds managed by or
      affiliated with Cumberland Associates and certain principals of Cumberland
      Associates. An additional $250,000 was raised from the Chairman and Chief
      Executive Officer of Milestone, on the same terms and conditions. The
      investors purchased, at face value, 3% Senior Convertible Notes Due 2003,
      convertible into Milestone Common Stock at prices increasing from $2.50
      per share in the first year to $6.00 per share in the fourth year, subject
      to antidilution protection in the event of stock dividends and certain
      capital changes. Purchasers of the Notes were granted rights to
      participate in certain future security offerings by Milestone.

      In December 1999, the holders of the 3% Convertible Notes agreed to accept
      1,800,000 shares in full payment and satisfaction and in conversion of all
      $2,250,000 of such notes. The 1,800,000 shares are to be issued and are
      currently being registered by Milestone.

      DENTAL OPERATIONS

      Domestic

      The Company continues to take steps aimed at growing and strengthening the
      end user base thereby gaining greater acceptance of The Wand(R) and
      translating into increased revenue through higher disposable handpiece
      usage. In September 2000, the Company unveiled two domestic sales
      initiatives. It introduced the Wand(R) Plus drive unit with several
      enhancements including a cruise control feature. Secondly, dental
      practitioners can now avail themselves to a 90 day trial program, which
      requires a commitment to purchase specified quantities of disposable
      handpieces and needles without any outlay for the unit during the
      demonstration period. The Company continues to sell the Wand(R) model and
      offers quantity discounts via a monthly program when purchasing disposable
      handpieces and dental needles. During 2000, the Company increased its
      sales and customer service staffs, and increased its presence at trade
      shows. In addition, the Company has embarked on a campaign to increase the
      number of national seminars it presents and to offer mini seminars in the
      offices of proficient users. It also continues to a) provide assistance to
      dental and dental hygiene schools which include The Wand(R) in their
      curriculum; b) visit, obtain feedback and provide further support to
      current Wand(R) users; c) distribute The Wand(R) technique videos and
      technical bulletins to its current users; and d) sell additional units to
      current Wand(R) users.

      Internationally

      The Company has continued to expand its presence overseas. In February
      2000, Milestone received approval to market The Wand(R) in Japan. Through
      September 30, 2000, the Company shipped 1,000 units and approximately
      100,000 disposable handpieces to its authorized dealers in Japan. During
      2000, agreements have been reached and distribution has begun to sell The
      Wand(R) in Canada, Mexico, Brazil and remainder of Central and South
      America. Approximately, 2,400 units and 260,000 disposable handpieces have
      been shipped in aggregate to these areas in 2000. Previously, the Company
      had begun shipping The


                                       18
<PAGE>

      Wand(R) for distribution throughout Europe and in Taiwan, China, Israel,
      and South Africa. Practitioners in Great Britain, Germany and Italy make
      up the majority of the European end users to date.

      PROPOSED MEDICAL OPERATIONS

      In June 2000, the Company received approval from the FDA to market The
      Wand(R) for medical use. Once sufficient capital is raised, it is the
      Company's intention to create an independent sales and marketing staff for
      distribution to the medical community. Further, an working prototype of a
      device for the delivery of multi-volume medicaments and anesthetic along
      with other added features of interest to medical practitioners has been
      developed and will be submitted to the FDA for approval.

      SUBSEQUENT EVENTS

      In October 2000, the Company sold 155 units and approximately 164,000
      disposable handpieces, domestically. Furthermore, 268 units were placed
      during the month under the 90-day trial program. Aggregate revenue
      generated from disposable handpieces and needle sales as direct result of
      the 90-day program was approximately $32,000.


                                       19
<PAGE>

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

Election of Board of Directors

      The Company held its 2000 Annual Meeting of Stockholders on July 13, 2000.
      At the meeting, stockholders reelected all board members which were
      presented,

Appointment of Grant Thornton LLP as auditors for 2000

         For  9,315,193             Against    7,830          Abstain   2,555

Ratification of issuance of 200,000 shares to Chief Executive Officer in payment
of debt.

         For  4,811,022             Against  135,709          Abstain  17,162

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)    Exhibits:                         (b)    Reports on Form 8-K:
       NONE                                             NONE


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<PAGE>

                                   Signatures

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

                                        MILESTONE SCIENTIFIC INC.
                                                Registrant


                                        /s/ Mitchell G. Kuhn
                                        ----------------------------------------
                                        Mitchell G. Kuhn, President and
                                        Chief Operating Officer


                                        /s/ Thomas M. Stuckey
                                        ----------------------------------------
                                        Thomas M. Stuckey, Vice President and
                                        Chief Financial Officer

Dated: November 13, 2000


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