SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 FORM 10-QSB/A2

Mark One

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

For the Quarterly Period ended June 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 August 11, 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 June 30,
              2000 and December 31, 1999                                      4

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

              Condensed Consolidated Statements of Cash Flows
              for the six months ended June 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                            12

PART II. OTHER INFORMATION

     ITEM 6.  Exhibits and Reports on Form 8-K                               18

SIGNATURES                                                                   19


                                       3
<PAGE>

                          Part 1. Financial Information

ITEM 1. Condensed Consolidated Financial Statements

                   Milestone Scientific Inc. and Subsidiaries

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                               June 30        December 31
                                                                 2000             1999
                         ASSETS                               (unaudited)           *
                                                             ----------------------------
<S>                                                          <C>             <C>
CURRENT ASSETS
    Cash and cash equivalents                                $     48,938    $    242,843
    Accounts receivable                                           592,299         297,778
    Inventories                                                 1,385,915       1,717,094
    Prepaid expenses                                               60,649         192,636
                                                             ------------    ------------

           Total current assets                                 2,087,801       2,450,351

PROPERTY AND EQUIPMENT, NET                                     1,443,822       1,669,769

PATENTS, NET                                                    1,369,446       1,491,724

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

         Total assets                                        $  4,911,387    $  5,622,162
                                                             ============    ============

           LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable                                         $  1,458,734    $    996,120
    Accrued expenses                                              212,150         246,453
                                                                             ------------
    10% SENIOR CONVERTIBLE NOTES                                  955,724              --
                                                             ------------    ------------

           Total current liabilities                            2,626,608       1,242,573
                                                             ------------    ------------

3% SENIOR CONVERTIBLE NOTES                                            --       2,250,000
                                                             ------------    ------------

COMMITMENT AND CONTINGENCIES                                           --              --
                                                             ------------    ------------

STOCKHOLDERS' EQUITY
    Common stock, par value $.001; authorized,
     25,000,000 shares; 10,752,898 issued as of
     June 30, 2000 and 8,864,898 issued
     as of December 31, 1999                                       10,753           8,865
    Additional paid-in capital                                 33,306,286      30,877,375
    Accumulated deficit                                       (30,120,744)    (27,845,135)
    Treasury stock, at cost, 100,000 shares                      (911,516)       (911,516)
                                                             ------------    ------------

           Total stockholders' equity                           2,284,779       2,129,589
                                                             ------------    ------------

           Total liabilities and stockholders' equity        $  4,911,387    $  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 six and three months ended June 30,
                                   (unaudited)

<TABLE>
<CAPTION>
                                            Six Months Ended              Three Months Ended
                                                June 30,                       June 30,
                                           2000           1999            2000           1999
                                           ----           ----            ----           ----
<S>                                   <C>             <C>               <C>          <C>
Net Sales                             $  2,933,797    $ 1,534,154       1,523,004    $   865,984
Cost of sales                            1,271,556        816,771         631,848        317,457
                                      ------------    -----------    ------------    -----------

Gross profit (loss)                      1,662,241        717,383         891,156        548,527
                                      ------------    -----------    ------------    -----------

Selling, general and
  Administrative expenses                3,459,811      3,704,619       1,824,484      2,016,155
Research and development expenses          198,950        109,456          97,750         40,610
                                      ------------    -----------    ------------    -----------
                                         3,658,761      3,814,075       1,922,234      2,056,765
                                      ------------    -----------    ------------    -----------

             Loss from operations       (1,996,520)    (3,096,692)     (1,031,078)    (1,508,238)

Settlement cost - Spinello lawsuit        (228,500)            --              --             --
Loss from termination of
  Wisdom product line                           --        (76,345)             --        (76,345)
Interest expense                           (54,133)       (29,631)        (33,979)       (21,541)
Interest income                              3,544         56,285           1,836         28,563
                                      ------------    -----------    ------------    -----------

                Net loss              $ (2,275,609)   $(3,146,383)   $ (1,063,221)   $(1,577,561)
                                      ============    ===========    ============    ===========

Loss per share - basic and diluted    $       (.21)   $      (.36)   $       (.10)   $      (.18)
                                      ============    ===========    ============    ===========

Weighted average shares outstanding     10,652,898      8,717,882      10,326,480      8,717,882
                                      ============    ===========    ============    ===========
</TABLE>

See notes to condensed consolidated financial statements.


                                       5
<PAGE>

                   Milestone Scientific Inc. and Subsidiaries

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                        For the six months ended June 30,
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                 2000           1999
                                                                 ----           ----
<S>                                                          <C>            <C>
Cash flows from operating activities
   Net loss                                                  $(2,275,609)   $(3,146,383)
   Adjustments to reconcile net loss to
   net cash used in operating activities
     Amortization                                                122,278        141,672
     Depreciation                                                234,748        227,276
     Non cash portion of settlement of Spinello lawsuit          203,500             --
   Changes in assets and liabilities
     Other assets                                                     --            281
     Accounts receivable                                        (294,521)       145,930
     Inventories                                                 331,179       (380,390)
     Prepaid expenses                                            131,987       (168,291)
     Accounts payable                                            462,614       (110,857)
     Accrued expenses                                            (34,303)        78,368
                                                             -----------    -----------

Net cash used in operating activities                         (1,118,127)    (3,212,394)
                                                             -----------    -----------

Cash flows from investing activities
       Capital expenditures                                       (8,801)       (70,178)
       Sale of treasury bills, net                                    --      1,592,516
                                                             -----------    -----------
       Net cash (used in) provided by investing activities        (8,801)     1,522,338
                                                             -----------    -----------

Cash flows from financing activities
       Net proceeds from issuance of senior notes                955,724      2,250,000
       Repayment under line of credit                                 --       (100,000)
       Cost associated with registering shares                   (22,701)            --
                                                             -----------    -----------
       Net cash provided by financing activities                 933,023      2,150,000
                                                             -----------    -----------

NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS                                            (193,905)       459,944

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

Cash and cash equivalents at end of period                   $    48,938    $   776,650
                                                             ===========    ===========

Supplemental disclosures of cash flow information:
     Cash paid during the period for interest                $    50,947    $     6,458
                                                             ===========    ===========
</TABLE>

See notes to condensed consolidated financial statements.


                                       6
<PAGE>

                   Milestone Scientific Inc. and Subsidiaries

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                     For the six months ended June 30, 2000
                                   (unaudited)

Supplemental schedule of noncash financing activities:

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
                                  June 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. 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 June 30,
      2000 and the results of operations for the three and six month periods
      ended June 30, 2000 and June 30, 1999 and cash flows for the month periods
      ended June 30, 2000 and 1999, respectively.

      The results reported for the three and six-month periods ended June 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 six months ended June 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 June 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 greater
      acceptance of The Wand(R) and translating to increased revenue through
      higher


                                       8
<PAGE>

      disposable handpiece usage. On October 1, 1999, the Company began selling
      the Wand(R), disposable handpieces and dental needles directly to dentists
      in the United States. Milestone also began offering quantity discounts on
      disposable handpieces and dental needles under certain monthly buying
      programs. During the six months ended June 30, 2000, the Company increased
      its sales force and customer service staff 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
                  its market overseas.

      Since the end of the first quarter of this year Milestone has operated
      with less than adequate working capital. At June 30, 2000, the Milestone
      had $48,938 in cash and negative working capital of $538,807. 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     guarantees that sales in year 2000 to two foreign
                        countries through two specified distributors will be
                        paid in full in 90 days.
                  o     the option, should the line of credit be insufficient,
                        to defer payment of his full salary until January 3,
                        2001.
                  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     In July 2000, Milestone borrowed the $200,000 under this line
                  of credit.

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

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

            o     On July 31, 2000, Milestone reached agreement with K. Tucker
                  Anderson, a major existing investor, under a $1,000,000 line
                  of credit, pursuant to a purchase and line of credit agreement
                  dated July 31, 2000. The $500,000 loan is due on June 30, 2003
                  and any additional loans under the line of


                                       9
<PAGE>

                  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 of a share on the date of grant 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 financing at the same price and on
                  substantially similar payment terms as used in future
                  financing. If we exercise this option then the number of
                  shares to be issued will be determined by dividing $300,000 by
                  the price per share by the investor in the future financing.

            o     In August 2000, Milestone reached agreement with another major
                  existing investor, not yet reflected in a signed document, for
                  a $1,000,000 2-year secured loan, bearing interest at 20% per
                  year and payable in cash or through the issuance of additional
                  20% notes on which both interest and principal are payable at
                  the maturity of the 2-year secured loan. 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 85% of
                  then market prices.

      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 six months ended June 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 38,000 shares of common
      stock at $2.063 per share were issued to certain employees during the six
      months ended June 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 83,000 shares of common
      stock at $3 per share were issued in aggregate to one officer and certain
      key personnel during the six months


                                       10
<PAGE>

      ended June 30, 1999 but were not included in the computation of diluted
      loss per share because the effect would have been anti-dilutive.


                                       11
<PAGE>

NOTE 4 - LITIGATION

      Spinello Lawsuits

      On March 26, 1997, Milestone and Spintech commenced legal action in the
      United States District Court of New Jersey against Ronald Spinello, DDS,
      former Chairman and Director of Research of Spintech. In the complaint,
      plaintiffs sought recovery of compensatory and punitive damages for
      extortion and tortuous interference with existing and prospective contract
      and business relationships, a declaratory judgment that Dr. Spinello has
      no personal rights to certain technology developed while he was employed
      as Director of Research of Spintech relating to the design and production
      of ancillary components of its computer controlled local anesthetic
      delivery system, a declaratory judgment that plaintiffs have not breached
      Dr. Spinello's employment agreement or the agreement for the initial
      purchase by Milestone of a 65% equity interest in Spintech and injunctive
      relief. On May 21, 1997, Dr. Spinello filed an answer and counterclaim.

      As a result of various pretrial motions, the only claims remaining in the
      litigation with Dr. Spinello were Milestone's claims against Dr. Spinello
      and Dr. Spinello's counterclaim for unpaid salary for the period
      subsequent to his alleged wrongful termination, and a portion of his
      indemnification claim against Spintech.

      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
      that 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
      (with a market value of approximately $80,000 at the time agreement was
      reached) 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. Spintech is now a more than 75% owned subsidiary of Milestone.

      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


                                       12
<PAGE>

      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 LINE and PRIVATE PLACEMENTS

      On April 5, 2000, Leonard Osser, the Chairman and CEO of Milestone, signed
      an agreement which included a provision for a $200,000 line of credit with
      a maturity of February 1, 2001 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 of $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, Leonard Osser, the Chairman and
      CEO of Milestone, and Stephen A. Zelnick, a director as participants 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.


                                       13
<PAGE>

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

      During the first half of 2000, the Company took significant steps to grow
      The Wand(R) ownership base and increase the daily utilization by domestic
      dentists. It dramatically increased the direct sales force 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
      Brazil. Also, the Company received approval to sell The Wand(R) and its
      disposable handpieces in Japan.

      Furthermore, the Company received approval for use of The Wand(R) in
      medicine by the FDA, $1,000,000 was raised through a private placement, a
      $200,000 line of credit was established and the Spinello lawsuit was
      settled.

      Subsequently, the Company received a $500,000 advance from an investor as
      part of a $1,000,000 line of credit. Also, the Company completed an
      agreement for the distribution of The Wand(R) through Central and South
      America exclusive of Brazil and Mexico.


                                       14
<PAGE>

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

Statement of Operations

      Net sales for the three months ended June 30, 2000 and June 30, 1999 were
      $1,523,004 and $865,984, respectively. The $657,020 increase reflects an
      approximate 275% increase in domestic sales of The Wand(R) and a 67%
      increase in domestic sales of its disposable handpiece. It also includes a
      45% aggregate increase in The Wand(R) unit sales to foreign distributors
      including Canada and includes the initial shipment of 1,100 units for
      distribution in Brazil.

      Cost of sales for the three months ended June 30, 2000 and June 30, 1999
      were $631,848 and $317,457, respectively. The $314,391 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
      $50,000 in previously written down inventory.

      For the three months ended June 30, 2000, the Company generated a gross
      profit of $891,156 as compared to a gross profit of $548,527 for the three
      months ended June 30, 1999. The increase in gross profit is attributable
      to increased sales volume.

      Selling, general and administrative expenses for the three months ended
      June 30, 2000 and 1999 were $1,824,484 and $2,016,155, respectively. The
      $191,671 decrease is mainly attributable to $127,000 decrease in legal
      expenses, $17,000 in second quarter 1999 expenses related to the
      discontinued Wisdom product line and a $25,000 decrease in consulting
      expenses.

      Research and development cost for the three months ended June 30, 2000 and
      June 30, 1999 were $97,750 and $40,610, respectively. The $57,140 increase
      is primarily attributable to costs associated with The Wand(R).

      The loss from operations for the three-month ended June 30, 2000 and June
      30, 1999 were $1,031,078 and $1,508,238, respectively.

      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 Company incurred interest expenses of $33,979 for the three months
      ended June 30, 2000 as compared to $21,541 of interest for the same period
      for calendar 1999. The $12,438 difference is attributable to higher
      average borrowings in 2000 including the $1,000,000 private placement.
      Interest income generated from treasury bills during the second quarter of
      1999 is the reason for the $26,727 decrease in interest income for the
      three months ended June 30, 2000.


                                       15
<PAGE>

      The net loss for the three months ended June 30, 2000 was $1,063,221 as
      compared to a net loss of $1,577,561 for the quarter ended June 30, 1999.
      The $514,340 reduction in net loss is attributable to higher sales volume
      for The Wand(R) and its disposable handpiece and a reduction in selling
      general and administrative expenses. This was partially offset by as
      increase interest expenses and a decrease in interest income.

      Six months ended June 30, 2000 compared to six months ended June 30, 1999

Statement of Operations

      Net sales for the six months ended June 30, 2000 and June 30, 1999 were
      $2,933,797 and $1,534,154, respectively. The $1,399,643 increase reflects
      an approximate 264% increase in domestic sales of The Wand(R) and an 83%
      increase in domestic sales of its disposable handpiece. It also includes
      an 89% aggregate increase in Wand(R) unit sales to foreign distributors.
      The increase in foreign sales includes the shipment of 500 Wand(R) units
      and approximately 100,000 disposable handpieces to the Company's
      authorized dealer in Japan and 1100 Wand(R) units for distribution in
      Brazil. These increases were partially offset by the $174,086 net sales
      generated from the discontinued Wisdom toothbrush line during the six
      months of 1999.

      Cost of sales for the six months ended June 30, 2000 and June 30, 1999
      were $1,271,556 and $816,771, respectively. The $454,785 increase is
      mainly attributable to an increase in Wand(R) unit and disposable
      handpiece sales partially offset by the recovery of approximately $170,000
      in previously written down inventory and the $152,230 in cost of sales
      during the first half of 1999 that related to the discontinued Wisdom
      product line.

      For the six months ended June 30, 2000, the Company generated a gross
      profit of $1,662,241 or 56.7% as compared to a gross profit of $891,156 or
      46.7% for the six months ended June 30, 1999.

      Selling, general and administrative expenses for the six months ended June
      30, 2000 and 1999 were $3,459,811 and $3,704,619, respectively. The
      $244,808 decrease is attributable to a $63,000 aggregate decrease in
      selling and marketing expenses associated with The Wand(R), a $147,000
      decrease in legal expenses and $74,767 in 1999 expenses related to the
      discontinued Wisdom products.

      Research and development cost for the six months ended June 30, 2000 and
      June 30, 1999 were $198,950 and $109,456, respectively. The $89,494
      increase is primarily attributable to costs associated with The Wand(R).

      The loss from operations for the six months ended June 30, 2000 and June
      30, 1999 were $1,996,520 and $3,096,692, respectively.


                                       16
<PAGE>

      The Company incurred interest expenses of $54,133 for the six months ended
      June 30, 2000 as compared to $29,631 of interest income for the same
      period for calendar 1999. The $24,502 difference is attributable to higher
      average borrowings in 2000 including the $1,000,000 private placement.
      Interest income generated from treasury bills during the first six months
      of 1999 is the reason for the $52,741 decrease in interest income for the
      six months ended June 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 six months ended June 30, 2000 was $2,275,609 as
      compared to a net loss of $3,146,383 for the six months ended June 30,
      1999. The $870,774 reduction in net loss is attributable to higher sales
      volume for The Wand(R) and its disposable handpiece and a reduction in
      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 June 30, 2000, the Company had negative working capital of $538,807. It
      consisted primarily of outstanding accounts payable and 10% senior
      convertible notes. For the six months ended June 30, 2000, the Company
      decreased cash and cash equivalents by $193,905.

      For the six month ended June 30, 2000, the Company's net cash used in
      operating activities was $1,118,127. This was primarily attributable to a
      net loss of $2,275,609 adjusted for non cash items of $122,278 for patent
      amortization, $234,748 for depreciation, and $203,500 for a lawsuit
      settlement; a $294,521 increase in accounts receivable, a $331,179
      decrease in inventory; a $131,987 decrease in prepaid expenses; a decrease
      in accrued expenses of $34,303 and a $462,614 increase in accounts
      payable.

      The Company used $8,801 in investing activities for the six months ended
      June 30, 2000. These expenditures covered retooling cost for product
      modifications.


                                       17
<PAGE>

      Financing activities provided $955,724 for the period. The Company, as
      described below, raised $1,000,000 through a private placement. On May 1,
      2000, it made $44,276 in aggregate payments to its note holders.

      Since the end of the first quarter of this year Milestone has operated
      with less than adequate working capital. At June 30, 2000, the Milestone
      had $48,938 in cash and negative working capital of $538,807. 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     guarantees that sales in year 2000 to two foreign
                        countries through two specified distributors will be
                        paid in full within 90 days.
                  o     the option, should the line of credit be insufficient,
                        to defer payment of his full salary until January 3,
                        2001.
                  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     In July 2000, Milestone borrowed the $200,000 under this line
                  of credit.

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

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

            o     On July 31, 2000, Milestone reached agreement with K. Tucker
                  Anderson, a major existing investor under a $1,000,000 line of
                  credit, pursuant to a purchase and line of credit agreement
                  dated at July 31, 2000. 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 of a
                  share on the date of grant 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.


                                       18
<PAGE>

            o     In August 2000, Milestone reached agreement with another major
                  existing investor, although not yet reflected in a signed
                  document, for a $1,000,000, 2-year secured loan, bearing
                  interest at 20% per year and 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 a small
                  discount from then market prices, subject to a maximum price.

      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.

      PRIVATE PLACEMENTS

      As detailed below, prior to June 30, 2000 and during 1999 the 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 of $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.

      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.


                                       19
<PAGE>

      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 to increased revenue through higher disposable handpiece
      usage. On October 1, 1999, the Company began a new sales initiative,
      permitting dentists in the United States to order the Wand(R) directly
      through Milestone and to avail themselves of certain quantity discounts
      when purchasing disposable handpieces and dental needles through a monthly
      program. During the first half of 2000, the Company increased its sales
      and customer service staff, and increased its presence at trade shows.
      Subsequent to June 30, 2000, it began an aggressive campaign to increase
      the number of national seminars it presents and to offer mini seminars in
      the offices of proficient user. Furthermore, the Company has developed
      several programs that allow the dental practitioners a variety of purchase
      and payment plans. 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. The
      Company immediately shipped 500 units and has shipped approximately
      100,000 disposable handpieces through June 30, 2000. During the second
      quarter of 2000, agreements have been reached and distribution has begun
      to sell The Wand(R) in Brazil and Canada. Previously, the Company had
      begun shipping The Wand(R) for distribution throughout Europe and in
      Taiwan, China, Israel, and South Africa.

      MEDICAL OPERATIONS

      In June 2000, the Company received approval for the FDA to market The
      Wand(R) for medical use. The Company sells The Wand(R) to physicians, its
      intention is to set up in the medical market a complete staff to sell and
      market The Wand(R) for wide distribution once sufficient capital is
      raised. Further, a working prototype of a device for the delivery of
      multi-volume medicaments and anesthetic and with other added features of
      interest to medical practitioners has been developed and will be submitted
      to the FDA for approval to market the medicine.

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: December 18, 2000


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