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, 1998

                                       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 1, 1998 the Registrant had a total of 8,793,588 shares of Common
Stock, $.001 par value, outstanding.
<PAGE>

                                      INDEX


PART I. FINANCIAL INFORMATION                                            Page

   ITEM 1.  Condensed Consolidated Financial Statements

            Condensed Consolidated Balance Sheets (unaudited)
              at March 31, 1998 and December 31, 1997                      3

            Condensed Consolidated Statements of Operations
              (unaudited) for the three months
              ended March 31, 1998 and 1997                                4

            Condensed Consolidated Statements of Cash Flows
              (unaudited) for the three months ended
              March 31, 1998 and 1997                                      5

            Notes to Condensed Consolidated Financial Statements           6

   ITEM 2. Management's Discussion And Analysis Of
           Financial Condition And Results Of Operations                   7

PART II. OTHER INFORMATION

   ITEM 6. Exhibits and reports on Form 8-K                                8


SIGNATURES                                                                 9


                                       2
<PAGE>

                          Part 1. Financial Information

ITEM 1. Condensed Consolidated Financial Statements

                   Milestone Scientific Inc. and Subsidiaries
                      CONDENSED CONSOLIDATED BALANCE SHEETS

     ASSETS
                                                     March 31      
                                                       1998         December 31
                                                    (unaudited)        1997
                                                   ------------    ------------
CURRENT ASSETS               
Cash and cash equivalents                          $  5,644,940    $  9,775,019
Investments - Treasury Bills                          7,834,091       5,778,369
Accounts receivable                                   3,750,273         318,147
Inventories                                             831,706       1,249,628
Prepaid expenses                                        235,856          97,779
                                                   ------------    ------------
          Total current assets                       18,296,866      17,218,942

PROPERTY AND EQUIPMENT, NET                           2,371,860         762,882
PATENTS                                               1,919,695       1,980,834
OTHER ASSETS                                             33,080          33,406
                                                   ------------    ------------
                                                   $ 22,621,501    $ 19,996,064
                                                   ============    ============

     LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES    
  Line of credit - bank                            $    150,000    $    175,000
  Accounts payable                                    1,787,919       1,053,955
  Accrued expenses                                      668,738         247,433
                                                   ------------    ------------
          Total current liabilities                   2,606,657       1,476,388
                                                   ------------    ------------
STOCKHOLDERS' EQUITY
  Common stock, par value $.001; authorized,
  25,000,000 shares; issued and outstanding,
  8,793,588 and 8,661,866 shares, respectively            8,794           8,662
  Additional paid-in capital                         29,822,440      28,685,483
  Accumulated deficit                                (9,816,390)    (10,174,469)
                                                   ------------    ------------
          Total stockholders' equity                 20,014,844      18,519,676
                                                   ------------    ------------
          Total liabilities and stockholders'
            equity                                 $ 22,621,501    $ 19,996,064
                                                   ============    ============

See notes to condensed consolidated financial statements.


                                       3
<PAGE>

                   Milestone Scientific Inc. and Subsidiaries

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


                                                          1998           1997
                                                     -----------    ----------- 
Revenues                                             $ 5,260,149    $   760,123
Cost of Sales                                          2,681,891        471,572
                                                     -----------    ----------- 
Gross Profit                                           2,578,258        288,551

Selling, general and administrative expenses           2,259,491        924,511
Research and development expenses                        130,167         65,654
                                                     -----------    ----------- 
                                                       2,389,658        990,165

        Income (loss) from operations                    188,600       (701,614)
                                                     -----------    ----------- 

Other income
  Interest income (net)                                  169,479          3,592
  Minority interest in net loss of subsidiary                 --          1,994
                                                     -----------    ----------- 
                                                         169,479          5,586
                                                     -----------    ----------- 

        NET INCOME (LOSS)                            $   358,079    $  (696,028)
                                                     -----------    ----------- 

Income (loss) per share - basic and diluted          $       .04    $     (0.14)
                                                     ===========    =========== 

Weighted average shares outstanding                    8,733,373      4,840,527
                                                     ===========    =========== 

See notes to condensed consolidated financial statements.


                                       4
<PAGE>

                   Milestone Scientific Inc. and Subsidiaries

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                      For the three months ended March 31,
                                   (unaudited)
                                                         1998           1997
                                                     -----------    ----------- 

Cash flows from operating activities                                  
  Net Income (loss)                                  $   358,079    $  (696,028)
  Adjustments to reconcile net loss to
   net cash used in operating activities
     Amortization and depreciation                       110,260         66,255
     Compensation expense                                 94,805         65,000
     Changes in assets and liabilities
          Other assets                                       326         (2,527)
          Accounts receivable                         (3,432,126)      (163,197)
          Inventories                                    417,922         21,776
          Prepaid expenses                              (138,077)       (75,550)
          Accounts payable                               733,964         14,214
          Accrued expenses                               421,305         29,108
          Notes payable                                  (25,000)            --
                                                     -----------    ----------- 
   Net cash used in operating activities              (1,458,542)      (740,949)
                                                     -----------    ----------- 
Cash flows from investing activities
  Capital expenditures                                (1,658,099)       (51,439)
  Acquisition costs of minority
   interest in Spintech                                       --         (5,392)
  Purchase of Treasury Bills                          (2,055,722)            --
                                                     -----------    ----------- 
Net cash used in investing activities                 (3,713,821)       (56,831)
                                                     -----------    ----------- 
Cash flows from financing activities
  Net proceeds from issuance of common stock           1,042,284      3,390,738
                                                     -----------    ----------- 
  Net cash provided by financing activities          $ 1,042,284    $ 3,390,738
                                                     -----------    -----------

  NET (DECREASE) INCREASE IN CASH
    AND CASH EQUIVALENTS                              (4,130,079)     2,592,958
Cash and cash equivalents at beginning of Period       9,775,019        779,359
                                                     -----------    ----------- 
Cash and cash equivalents at end of Period           $ 5,644,940    $ 3,372,317
                                                     ===========    ===========

Supplemental disclosures of cash flow information:
  Cash paid during the period for interest           $     4,841    $     5,812
                                                     -----------    ----------- 

See notes to condensed consolidated financial statements.


                                       5
<PAGE>

                   Milestone Scientific Inc. and Subsidiaries

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 1998

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.

      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, 1998, and the results of operations, changes in stockholders' equity
      and cash flows for the three-month period ended March 31, 1998.

      The results reported for the three-month period ended March 31, 1998 are
      not necessarily indicative of the results of operations which may be
      expected for a full year.

NOTE 2 - EARNINGS PER SHARE

      The Company has adopted Statement of Financial Accounting Standards
      ("SFAS") No. 128, "Earnings Per Share." SFAS No. 128 requires the
      presentation of basic earnings per share and, for companies with complex
      capital structures or potentially dilutive securities, such as convertible
      debt, options, and warrants, diluted earnings per share.

      Basic earnings per common share are computed using the weighted average
      number of common shares outstanding. Diluted earnings per common share are
      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,
      such as the convertible subordinated notes. If the result of assumed
      conversions is dilutive, net earnings are adjusted for interest expense on
      the convertible subordinated notes, while the average share of common
      stock outstanding are increased.

      For the three months ended March 31, 1998, the assumed exercise of certain
      dilutive options and warrants did not have a significant impact on the
      basic earnings per share and accordingly, basic and diluted earnings per
      share of $.04 are presented in the accompanying financial statements.


                                       6
<PAGE>

      Options and warrants, in aggregate, to purchase 157,000 shares of common
      stock at prices ranging from $21.25 to $23 per share were issued during
      the quarter ended March 31, 1998 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.

      During the quarter ended March 31, 1998 warrants to purchase 131,722
      shares of common stock were exercised at prices ranging from $4.72 to $9
      for which the company realized proceeds of $1,042,277.

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

        Three Months Ended March 31, 1998 as compared to the Three Months Ended
        March 31, 1997.

Statement of Operations

Revenues and Cost of Goods Sold increased to $5,260,149 and $2,681,891
respectively in 1998 from $760,123 and $471,572 in 1997 an increase of
$4,500,026 and $2,210,319. These increases are primarily due to the sales of The
Wand(TM) (a computer controlled "painless" injection system).

Selling, General and Administrative expenses increased to $2,259,491 in 1998
from $924,511 in 1997 an increase of $1,334,980. The increase is primarily due
to costs associated with The Wand(TM), including sales commissions of $357,000,
an increase in marketing costs of approximately $390,000 and other increases
including salaries and overhead. Legal fees increased by approximately $120,000
as a result of the Spinello dispute and complying with general regulatory
requirements. In addition, an expense of $94,805 was incurred as a result of a
noncash exercise of warrants.

Research and Development costs increased to $130,167 in 1997 from $65,654 in
1997, an increase of $64,513 reflecting increased costs to develop "The
Wand(TM)".

Net Interest income increased to $169,479 from $3,592 in 1997, an increase of
$165,887 primarily as a result of investing the net proceeds of two private
placements completed during 1997.

Liquidity and Capital Resources

At March 31, 1998, the Company's working Capital was $15,690,209, primarily
reflecting the net cash proceeds from the September private placement and from
the exercise of warrants. In 1998, the company received proceeds of $1,042,284
from the exercise of warrants.

The company intends to use the funds for development engineering, tooling,
marketing and other expenses associated with the introduction of "The Wand(TM)",
development of other products and general corporate purposes including working
capital.


                                       7
<PAGE>

                           PART II. OTHER INFORMATION


ITEM 6. Exhibits and reports on Form 8-K

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

            The Company did not file any reports on Form 8-K during the three
      months ended March 31, 1998.


                                       8
<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, thereunto duly
authorized.



                                           MILESTONE SCIENTIFIC INC.
                                           -------------------------
                                                (Registrant)


Date: 5/1/98                        /s/ DANIEL R. MARTIN
                                    --------------------------------------------
                                    DANIEL R. MARTIN
                                    President and Acting Chief Financial Officer


                                       9