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 March 31, 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 May 12, 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.


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<PAGE>

                                      INDEX

PART I.    FINANCIAL INFORMATION                                            Page

  ITEM 1.  Condensed Consolidated Financial Statements (unaudited)

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

           Condensed Consolidated Statements of Operations
           for the three months ended March 31, 2000 and 1999                5

           Condensed Consolidated Statements of Cash Flows
           for the three months ended March 31, 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                               14

PART II.   OTHER INFORMATION

  ITEM 6.  Exhibits and Reports on Form 8-K                                  16

SIGNATURES                                                                   17


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<PAGE>

                          Part 1. Financial Information

ITEM 1. Condensed Consolidated Financial Statements

                   Milestone Scientific Inc. and Subsidiaries
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS         March 31       December 31
                                                      2000            1999
                                                  (unaudited)           *
                                                  -----------------------------
CURRENT ASSETS
  Cash and cash equivalents                       $    458,065     $    242,843
  Accounts receivable                                  470,612          297,778
  Inventories                                        1,467,668        1,717,094
  Prepaid expenses                                     161,604          192,636
                                                  ------------     ------------

      Total current assets                           2,557,949        2,450,351

PROPERTY AND EQUIPMENT, NET                          1,557,390        1,669,769

PATENTS, NET                                         1,430,585        1,491,724

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

      Total assets                                $  5,556,242     $  5,622,162
                                                  ============     ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                $  1,039,444     $    996,120
  Accrued expenses                                     146,097          246,453
                                                  ------------     ------------

      Total current liabilities                      1,185,541        1,242,573
                                                  ------------     ------------

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

10% SENIOR CONVERTIBLE NOTES                         1,000,000               --
                                                  ------------     ------------

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

  STOCKHOLDERS' EQUITY
    Common stock, par value $.001; authorized,
    25,000,000 shares; 10,752,898 issued as of
    March 31, 2000 and 8,864,898 issued
    as of December 31, 1999                             10,753            8,865
  Additional paid-in capital                        33,328,987       30,877,375
  Accumulated deficit                              (29,057,523)     (27,845,135)
  Treasury stock, at cost, 100,000 shares             (911,516)        (911,516)
                                                  ------------     ------------

      Total stockholders' equity                     3,370,701        2,129,589
                                                  ------------     ------------

      Total liabilities and stockholders' equity  $  5,556,242     $  5,622,162
                                                  ============     ============

*Derived from audited financial statements at December 31, 1999

The accompanying notes are an integral part of these statements


                                       4
<PAGE>

                   Milestone Scientific Inc. and Subsidiaries

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      For the three months ended March 31,
                                   (unaudited)

                                                    2000               1999
                                                    ----               ----

Revenues                                        $  1,410,793       $    668,170
Cost of sales                                        639,708            499,314
                                                ------------       ------------

Gross profit                                         771,085            168,856
                                                ------------       ------------

Selling, general and
    administrative expenses                        1,635,327          1,688,464
Research and development expenses                    101,200             68,846
                                                ------------       ------------

                                                   1,736,527          1,757,310
                                                ------------       ------------

        Loss from operations                        (965,442)        (1,588,454)

Settlement costs - Spinello lawsuit                 (228,501)                --

Interest income (expense), net                       (18,445)            19,632
                                                ------------       ------------

           NET LOSS                             $ (1,212,388)      $ (1,568,822)
                                                ============       ============

Loss per share - basic and diluted              $       (.12)      $       (.18)
                                                ============       ============

Weighted average shares outstanding               10,000,063          8,717,882
                                                ============       ============

See notes to consolidated financial statements.


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<PAGE>

                   Milestone Scientific Inc. and Subsidiaries
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                      For the three months ended March 31,
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                  2000            1999
<S>                                                           <C>             <C>
Cash flows from operating activities
   Net loss                                                   $(1,212,388)    $(1,568,822)
   Adjustments to reconcile net loss to
   net cash used in operating activities
     Amortization                                                  61,139          61,139
     Depreciation                                                 117,600         118,314
     Non cash portion of Settlement of Spinello lawsuit           203,500              --
   Changes in assets and liabilities
     Other assets                                                      --             606
     Accounts receivable                                         (172,834)       (109,862)
     Inventories                                                  249,426        (374,862)
     Prepaid expenses                                              31,032         (50,881)
     Accounts payable                                              43,324         310,936
     Accrued expenses                                            (100,356)        (20,355)
                                                              -----------     -----------

Net cash used in operating activities                            (779,557)     (1,633,787)
                                                              -----------     -----------

Cash flows from investing activities
     Capital expenditures                                          (5,221)        (58,625)
     Sale and (purchase) of treasury bills, net                        --       1,517,940
                                                              -----------     -----------
     Net cash provided by (used in) investing activities           (5,221)      1,459,315
                                                              -----------     -----------

Cash flows from financing activities
     Net proceeds from issuance of senior notes                 1,000,000       2,250,000
                                                              -----------     -----------
     Repayment under line of credit                                    --          50,000
     Net cash provided by financing activities                  1,000,000       2,300,000
                                                              -----------     -----------

NET INCREASE IN CASH
AND CASH EQUIVALENTS                                              215,222       2,125,528

Cash and cash equivalents at beginning of period                  242,842         316,706
                                                              -----------     -----------

Cash and cash equivalents at end of period                    $   458,065     $ 2,442,234
                                                              ===========     ===========
Supplemental disclosures of cash flow information:
   Cash paid during the period for interest                   $    27,375     $     3,931
                                                              ===========     ===========
</TABLE>

See notes to consolidated financial statements


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<PAGE>

                   Milestone Scientific Inc. and Subsidiaries
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                   For the three months ended March 31, 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 CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 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 March
      31, 2000 and the results of operations for the three month period ended
      March 31, 2000 and March 31, 1999 and cash flows for the three month
      period ended March 31, 2000 and 1999, respectively.

      The results reported for the three month period ended March 31, 2000 are
      not necessarily indicative of the results of operations, which may be
      expected for a full year.

NOTE 2 -LIQUIDITY OF ASSETS

      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 three months ended March 31, 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 January 1, 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. 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. During the first quarter of 2000, the Company increased
      its sales force and customer service staff. Furthermore, it continues to
      a) develop its market overseas; b) provide assistance to dental and dental
      hygiene schools which include The Wand(R) in their curriculum; c) visit,
      obtain feedback and provide further support to current Wand(R) users; d)
      distribute The Wand(R) technique videos and technical bulletins to its
      current users; and e) sell additional units to current Wand(R) users.

      As of March 31, 2000, the Company had $458,065 in aggregate cash and cash
      equivalents. Management believes that through the proper utilization of
      these existing funds, revenues generated from international distributors
      and from continued increases in domestic disposable handpiece sales,
      expense reductions achieved through cost containment programs, and the
      additional financing described below, it will have sufficient cash to meet
      its needs over the next twelve months.

      In addition, on April 5, 2000 Leonard Osser, the Chairman and CEO of the
      Company, signed an agreement which provides the Company through December
      31, 2000 with the following: 1) a $200,000 line of credit with a maturity
      of February 1, 2001 and a 9% annual interest rate; 2) payment guarantees
      on year 2000 sales to certain foreign countries through two specified
      distributors; and 3) the option, should the line of credit be
      insufficient, to defer payment of his full salary until January 3, 2001.
      Furthermore, Mr. Osser and one other participant in the February 2000
      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.

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 from stock options based on the treasury stock
      method, plus any other potentially dilutive securities outstanding, unless
      the effect is anti-dilutive.

      For the three months ended March 31, 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
      quarter ended March 31, 2000 but were not included in the computation of
      diluted earnings per share because their exercise price was greater than
      the average market price of the common shares.

      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 three


                                       9
<PAGE>

      month ended March 31, 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

      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,
      ascertaining violation of his employment agreement and other claims. On
      May 20, 1997 Glenn R. Spinello filed a Complaint in the Court of Common
      Pleas, York County Pennsylvania which was subsequently removed to the
      United States District Court for the Middle District of Pennsylvania,
      alleging violation of his employment agreement. Milestone and Spintech
      filed an answer and counterclaims Glen Spinello's complaint.

      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, the Company agreed to settle its claim
      against Dr. Spinello, the counterclaims asserted by Dr. Spinello and the
      claims asserted by and against Glenn Spinello. Various stipulations
      incorporating that settlement were executed in February 2000.

      Under the agreement, Dr. Spinello has assigned to Milestone any rights
      which he has to technology relating to "The Wand(R)" handpiece or
      technology developed while he was employed at Spintech and has agreed to
      cooperate in filing and to assign to Milestone any future patent
      applications covering that technology. Dr. Spinello and Glenn Spinello
      each also agreed to convey to Milestone all of his equity interests in
      Spintech. In return for the


                                       10
<PAGE>

      assignment of technology, the conveyance of Spintech equity and the
      resolution of all disputes between the parties, including the
      discontinuance with prejudice of pending legal actions, Milestone has paid
      $25,000 to Dr. Spinello and issue to him 80,000 shares or shares with a
      market value of $80,000 and to Glenn Spinello 8,000 shares.

      Class Action Lawsuit

      In 1998, several class action lawsuits were commenced against the Company,
      certain present and former executive officers, one outside director and
      consultants in the United States District Court for the District of New
      Jersey. The District Judge before whom the cases are pending has entered
      an order consolidating all of the class actions into one consolidated
      action. The Complaints contain generally overlapping and similar
      allegations of violations of the Securities Exchange Act of 1934,
      including allegations that the Company and certain of the other defendants
      violated the Act by issuing false and misleading financial statements and
      disseminating misleading statements about, among other things, the demand
      for the Company's principal product, its expected sales growth, the
      acceptance of that product by dental professionals, shipments during
      certain time periods and misrepresentations as to third-party evaluations
      of the efficacy of the product through failure to disclose the issuance of
      stock options to certain consultants. On October 22, 1998, the District
      Judge entered an order appointing lead plaintiff to represent the
      interests of all class members. On March 28, 1999, the District Judge
      appointed lead counsel to represent the class. On April 28, 1999, the
      class filed a Consolidated and Amended Class Action Complaint, naming as
      defendants the Company and three present and former executive officer and
      director. The Consolidated Complaint alleges that the Company issued false
      and misleading statements concerning, among other things, certain studies
      and reports on the Company's products, the Company's backlog and the
      amount of reserve taken for returns. Milestone believes that the material
      allegations of the Consolidated Complaint do not state a cause of action
      under the Federal Securities Law and on May 21, 1999 served a motion to
      dismiss the Consolidated Complaint for failure to state a claim. The class
      has responded to the motion and the Company filed a reply. The Motion was
      submitted to the Court in September 1999, but no decision has yet been
      rendered. Instead, on March 1, 2000, the Court held oral argument on the
      Motion to Dismiss, at the end of which the court requested supplemental
      memoranda of law on one issue. The Supplemental Memoranda Of Law were
      filed on March 16 and 22, 2000. If the Motion to Dismiss is not granted,
      the company believes that the allegations contained in the Class Action
      Complaint are without merit and it intends to vigorously defend the
      action. Specifically, Milestone believes that its financial statements
      presented fairly its results of operations, that the information which it
      has publicly disclosed did not contain any material misstatements or
      misrepresentations and that stock options issued to persons who published
      research reports were issued for other services for the Company,
      principally service as spokespersons and demonstrators of the Company's
      product. Further, the Company continues to believe that The Wand(R)
      embodies superior technology, is a major advance in dentistry and may
      ultimately become the accepted method for delivering local dental
      anesthesia.


                                       11
<PAGE>

      Derivative Action Lawsuit

      In February 1999, a purported owner of Milestone stock, commenced a
      derivative action on behalf of the Company, in the Court of Chancery of
      the State of Delaware in Newcastle County, against certain present and
      former executive officers and directors. In the action, plaintiff alleges
      that, based on the same facts as the class actions described above, the
      defendants engaged in violations of the securities laws, committed fraud
      and securities fraud, wasted corporate assets and damaged the Company's
      reputation. As a derivative action, even if the plaintiff is successful,
      any award, after deduction of plaintiff's costs and disbursements, would
      be payable to the Company. Nevertheless, Milestone believes that the
      material allegations of the complaint lack merit and intends to provide a
      legal defense for its present and former officers and directors in
      accordance with the indemnification provisions of its Certificate of
      Incorporation. Because the allegations of the Derivative Complaint are so
      closely tied to the allegations of the Class Complaint, the Derivative
      Plaintiff's counsel has agreed with the Company that no response to the
      Derivative Complaint is due until 60 days after the Court in the Class
      Action decides the motion to dismiss.

      Insurance Broker and Carrier

      In January 1999, the Company filed a complaint against its insurance
      broker (Frank Crystal Financial Services) and the two excess insurers
      [American Alliance and St. Paul] in the United States District Court for
      the District of New Jersey. American Alliance and St. Paul were in dispute
      with the Company because they claim that the Company did not timely submit
      the appropriate application. As a result, American Alliance refused to
      issue a policy and St. Paul, which issued a policy, has refused to cover
      the class actions described above. In April 1999, the Company reached a
      settlement of this action, as a result of which American Alliance issued
      the Excess Director's and Officer's Insurance Policy; the Company agreed
      that claims arising prior to the date of the policy were not covered by
      the policy and the parties reserved all of their arguments and positions
      with respect to any other coverage issues including those that resulted
      from the Consolidated and Amended Class Action Complaint referred to
      above.

      On June 24, 1999, American Alliance filed a complaint in the United States
      District Court for the Southern District of New York seeking a declaratory
      judgment that it is not liable under its policy for the claim asserted in
      the amended class complaint as well as the derivative complaint. On July
      9, 1999 the Company filed its own declaratory judgment action against
      American Alliance and St. Paul in the United States District Court for the
      District of New Jersey seeking a declaration that the claims asserted in
      the Consolidated Complaint in the Class Action and in the Derivative
      Action are covered by the Excess Director's and Officer's Insurance
      Policies. On August 4, 1999, the District Judge in New Jersey
      administratively terminated the Company's action until the previously
      filed New York Action was resolved or dismissed. Thereafter, the Company
      filed an answer in which it denied the material allegations of the
      complaint and counterclaimed in the New York Action seeking the same
      relief as it sought in its complaint in the New Jersey Action. Both
      American Alliance and the Company each requested leave from the Judge in
      the New York Action to make a motion for summary judgment and to dismiss
      the complaint, respectively.


                                       12
<PAGE>

      Instead, since any decision on the scope of coverage of the excess
      policies will, in large part, depend upon whether the Class Action
      complaint is dismissed, in whole or in part, the District Judge in the New
      York Action decided to hold in abeyance any action on American Alliance's
      complaint and Milestone's answer and counterclaim until a decision is
      rendered by the District Court in New Jersey in the Class Action.

NOTE 5 -  PRIVATE PLACEMENT

      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 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, and in
      February 2000 formalized the agreement to convert all $2,250,000 of such
      notes into common stock at a modified price of $1.25 per share. Of the
      1,800,000 shares which were to be issued, only the 200,000 shares to Mr.
      Osser are being held in escrow and pending shareholder approval.

      Since the scheduled conversion price was $2.50 per share, 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 quarter 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.

      Additionally, the Company received approval to sell The Wand(R) and its
      disposable handpiece in Japan, $1,000,000 was raised through a private
      placement and the Spinello lawsuit was settled.

      Three month ended March 31, 2000 compared to three month ended March 31,
      1999

Statement of Operations

      Net sales for the three months ended March 31, 2000 and March 31, 1999
      were 1,410,793 and 668,170, respectively. The $742,623 increase reflects
      an approximate 100% increase in domestic sales of the Wand(R) and its
      disposable handpiece. It also includes a nearly four fold aggregate
      increase in sales to foreign distributors including Canada. The increase
      in foreign sales includes the initial shipment of 500 Wand(R) units and
      approximately 50,000 disposable handpiece to the Company's authorized
      dealer in Japan. These increases were partially offset by the $189,864 net
      sales generated from the discontinued Wisdom toothbrush line during the
      first quarter of 1999.

      Cost of sales for the three months ended March 31, 2000 and March 31, 1999
      were $639,708 and $499,134, respectively. The $140,574 increase is mainly
      attributable to an increase in Wand(R) unit and disposable handpiece sales
      volume partially offset by the recovery of approximately $120,000 in
      previously written down inventory and the $146,817 in cost of sales during
      the first quarter of 1999 which related to the discontinued Wisdom product
      line.

      For the three months ended March 31, 2000, the Company generated a gross
      profit of $771,085 or 54.7% as compared to a gross profit of $168,856 or
      25.2% for the three months ended March 31, 1999.

      Selling, general and administrative expenses for the three months ended
      March 31, 2000 and 1999 were $1,635,327 and $1,688,464, respectively. The
      $53,137 decrease is attributable to a $106,000 aggregate decrease in
      selling and marketing expenses associated with the Wand(R) and $57,400 in
      first quarter 1999 expenses related to the discontinued Wisdom products.
      This was partially offset by an aggregate increase in $30,000 increase in
      director and officer insurance and $36,000 increase in consulting
      expenses.

      Research and development cost for the three months ended March 31, 2000
      and March 31, 1999 were $101,200 and $68,846, respectively. The $32,354
      increase is primarily attributable to costs associated with the Wand(R).


                                       14
<PAGE>

      The loss from operations for the three month ended March 31, 2000 and
      March 31, 1999 were $965,442 and $1,588,454, respectively.

      The Company incurred net interest expenses of $18,445 for the three months
      ended March 31, 2000 as compared to $19,632 of net interest income for the
      same period for calendar 1999. The $38,077 difference is attributable to
      higher average borrowings in 2000 including the $1,000,000 private
      placement and interest income generated from treasury bills during the
      first quarter of 1999.

      The net loss for the three months ended March 31, 2000 was $1,212,388 as
      compared to a net loss of $1,568,822 for the quarter ended March 31, 1999.
      The $356,434 reduction in net loss is attributable to higher sales volume
      for the Wand(R) and its disposable handpiece at a higher average profit
      margin and a reduction in selling general and administrative expenses.
      This was partially offset by costs associated with the settlement of the
      Spinello lawsuit and net interest expense.

      Liquidity and Capital Resources

      At March 31, 2000, the Company's working capital was $1,372,408. It
      consisted primarily of cash generated from private placement in February
      2000 and from inventories.

      For the three month ended March 31, 2000, the Company increased cash and
      cash equivalents by $215,222.

      For the three month ended March 31, 2000, the Company's net cash used in
      operating activities was $779,557. This was primarily attributable to a
      net loss of $1,212,388 adjusted for non cash items of $61,139 for patent
      amortization, $117,600 for depreciation, and $203,500 for a lawsuit
      settlement; a $172,834 increase in accounts receivable, a $249,426
      decrease in inventory; a $31,032 decrease in prepaid expenses; a decrease
      in accrued expenses of $100,356 and a $43,324 increase in accounts
      payable.

      The Company used $5,221 in investing activities for the three month ended
      March 31, 2000. These expenditures covered retooling cost for product
      modifications.

      Financing activities provided $1,000,000 for the period. The Company, as
      described below, raised these funds through a private placement.

      As of March 31, 2000, the Company had $458,065 in aggregate cash. In
      addition, on April 5, 2000 Leonard Osser, the Chairman and CEO of the
      Company, signed an agreement which provides the Company through December
      31, 2000 with the following: 1) a $200,000 line of credit with a maturity
      of February 1, 2001 and a 9% annual interest rate; 2) payment guarantees
      on year 2000 sales to certain foreign countries through two specified
      distributors; and 3) the option, should the line of credit be
      insufficient, to defer payment of his full salary until January 3, 2001.
      Furthermore, Mr. Osser and one other participant in the February 2000
      private placement agreed to amend the Company's promissory note agreement
      so as to defer

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<PAGE>

      all payments including interest until January 3, 2001. These notes
      comprised $300,000 of the $1,000,000 private placement. Also, 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. During the first quarter of 2000, the
      Company increased its sales and customer service staff. Furthermore, it
      continues to a) develop its market overseas; b) provide assistance to
      dental and dental hygiene schools which include The Wand(R) in their
      curriculum; c) visit, obtain feedback and provide further support to
      current Wand(R) users; d) distribute The Wand(R) technique videos and
      technical bulletins to its current users; and e) sell additional units to
      current Wand(R) users.

      In August 1999, the Company submitted an application to the FDA to market
      for medical use a similar device The Wand(R). A working prototype of an
      improved device for delivery of multi-volume anesthetic and other
      medicaments and with other added features of interest to medical
      specialists has been developed and will be submitted to the FDA.

      Private Placement

            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, 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" 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.

      Subsequent to year end, in February 2000, the holders of the 3%
      Convertible Notes agreed to convert all $2,250,000 of such notes into
      common stock at an $1.25 per share. Of the 1,800,000 shares which were to
      be issued, only the 200,000 shares to Mr. Osser are being held in escrow
      and pending shareholder approval.

Year 2000 Compliance

      The Company experienced no disruption with regards to the year 2000. It
had developed a plan which included the upgrade of its internal information
system and insured that its operating systems were compliant with the
requirements to process transactions in the year 2000. The cost was not
significant for overall compliance. The Company reviewed its own equipment and


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determined that the equipment was either Year 2000 compliant or not affected by
the Year 2000 issues. Also, the Company contacted its vendors, on whom it
relies, and they too were Year 2000 complaint.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits:

      Exhibit 10.21 Purchase Agreement

      Exhibit 10.22 Accord and Satisfaction of 3% Convertable Notes

(b)   Reports on Form 8-K:

      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: May 12, 2000


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