Milestone Scientific Inc.: Form 10-Q for the period ended Jun 30, 2025

The following discussions of the financial condition and results of operations should be read in conjunction with the financial statements and the notes to those statements contained in this report and in connection with management's discussion and analysis and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission, or SEC on April 15, 2025. Certain statements in this discussion and elsewhere in this report constitute forward-looking statements, within the meaning of Section 21E of the Exchange Act, which involve risks and uncertainties. The actual results may differ materially from those anticipated in these forward-looking statements.

OVERVIEW

Milestone Scientific is a biomedical technology company that patents, designs, develops, and commercializes innovative diagnostic and therapeutic injection technologies and devices for medical and dental use. Since our inception, we have engaged in pioneering proprietary, innovative, computer-controlled injection technologies, and solutions for the medical and dental markets. We believe our technologies are proven and well established. Our common stock was initially listed on the NYSE American on June 1, 2015, and trades under the symbol “MLSS".

We have focused our resources on redefining the worldwide standard of care for injection techniques by making the experience more comfortable for the patient by reducing the anxiety and stress of receiving injections from the healthcare provider. Our computer-controlled injection devices make injections precise, efficient, and virtually painless.

We have developed a proprietary, revolutionary, computer-controlled anesthetic delivery device, our DPS Dynamic Pressure Sensing Technology® System, to meet the needs of various subcutaneous drug delivery injections and fluid aspiration – enabling healthcare practitioners to achieve multiple unique benefits that cannot currently be accomplished with the 160-year-old manual syringe. Our proprietary DPS Dynamic Pressure Sensing technology is our technology platform that advances the development of next-generation devices. It regulates flow rate and monitoring pressure from the tip of the needle, through platform extensions for local anesthesia for subcutaneous drug delivery, used in various dental and medical injections. It has specific medical applications for epidural space identification in regional anesthesia procedures.

Our device, The Wand®, a single use disposable handpiece, is marketed in dentistry under the trademark CompuDent®, and STA Single Tooth Anesthesia System® and is suitable for all dental procedures that require local anesthetic. The dental devices currently are sold in the United States, Canada and in over 41 other countries. Milestone Scientific also has 510(k) marketing clearance from the U.S. Food and Drug Administration (FDA) on the CompuFlo® Epidural Computer Controlled Anesthesia System in the lumbar, thoracic, and cervical thoracic junction of the spine region. In addition, Milestone Scientific has obtained CE mark approval and can be marketed and sold in most European countries.

Our recent receipt of chronology-Specific CPT Code for the Company's technology by the American Medical Association marks an important milestone, which could increase the potential number of anesthesia pain management clinics adopting the CompuFlo instrument. A CPT code expands the potential for reimbursement of epidural procedures in pain management utilizing the CompuFlo Epidural System., which should help accelerate the commercial roll-out of CompuFlo in the U.S

Milestone Scientific and its subsidiaries currently hold over 317 U.S. and foreign patents, and many patents pending and patent applications. The Company’s patents and patent applications relate to drug delivery methodologies, Peripheral Nerve Block, drug flow rate measurement, pressure/force computer-controlled drug delivery with exit pressure, dynamic pressure sensing, automated rate control, automated charging, drug profiles, audible and visual pressure/force feedback, tissue identification, identification of a target region drug delivery injection unit, drug drive unit for anesthetic, handpiece, and injection device.

Milestone Scientific remains focused on advancing efforts to achieve the following three primary objectives:

• Establishing Milestone’s DPS Dynamic Pressure Sensing technology platform as the standard-of-care in painless and precise drug delivery, providing for the first time, objective visual and audible in-tissue pressure feedback, and continuing to expand platform applications;
• Following obtaining successful FDA clearance of our first medical device, Milestone Scientific is transitioning from a research and development organization to a commercially focused medical device company; and
• Expanding our global footprint of our CompuFlo Epidural and CathCheck System by utilizing a targeted field sales force and partnering with distribution companies worldwide.

Our dental devices have been used to administer over 95 million injections worldwide. Each of our devices has a related single disposable handpiece, leading to a continuing revenue stream following the sale of the device. At present, we sell disposable handpieces unique to our legacy product (the Wand and CompuDent) to users who have not upgraded to our current dental product, the STA Single Tooth Anesthesia System.

Building on the success of our proprietary, core technology platform for dental injections, and desiring to pursue other growth opportunities, we have begun to expand the uses and applications of our proprietary, patented technologies to achieve greater operational efficiencies, enhanced patient safety and therapeutic adherence, patient satisfaction, and improved quality of care across a broad range of medical specialties.

We intend to continue to expand the uses and applications of our DPS Dynamic Pressure Sensing technology. We believe that we and our technology solutions are recognized by key opinion leaders (i.e., academics, anesthesiologists and practicing dentists w

The Single Tooth Anesthesia System (Dental)

Since its market introduction in early 2007, the STA Single Tooth Anesthesia System and prior C-CLAD devices have been used to deliver over 95 million safe, effective, and comfortable injections. The instrument has also been favorably evaluated in numerous peer-reviewed, published clinical studies and associated articles. Moreover, there appears to be a growing consensus among users that the STA Instrument is proving to be a valuable and beneficial instrument that is positively impacting the practice of dentistry worldwide.

Medical Market Product

In June 2017, we received FDA regulatory clearance to sell the CompuFlo Epidural Computer Controlled Anesthesia System in the United States for epidural injections.

In May, 2022, the Company received a chronology-specific CPT Code for the Company’s technology by the American Medical Association, which marks an important milestone. Effective January 1, 2023, this temporary tracking code allows clinicians to submit claims to healthcare insurance providers using the Company’s technology for Epidural Sterile Injections in the lumbar, thoracic, and cervical thoracic junction of the spinal region for reimbursement. A CPT code expands the potential for reimbursement of epidural procedures in pain management utilizing the CompuFlo Epidural System.

The following table shows a breakdown of Milestone Scientific’s product sales (net), domestically and internationally, by business segment product category:

23

Current Product Platform

See Note 1, “Organization and Business”.

Results of Operations

The following table sets forth the consolidated results of operations for the three and six months ended June 30, 2025 and 2024, respectively. The trends suggested by this table may not be indicative of future operating results:

Results of Operations

24

Three months ended June 30, 2025 compared to three months ended June 30, 2024

Net sales for 2025 and 2024 were as follows:

Consolidated revenue for the three months ended June 30,2025, and 2024, was approximately $2.3 million and an increase of approximately $470,000. E-commerce dental revenue for the three months ended June 30, 2025 and 2024, was approximately $1.3 million respectively. For the three months ended June 30, 2025 and 2024, international revenue was approximately $1.0 million, and $489,000, respectively, an increase of $511,000. For the three months ended June 30, 2025 and 2024, medical revenue was approximately $32,000 and $19,000, respectively, an increase of $13,000, compared to June 30, 2024.

Gross Profit for 2025 and 2024 were as follows:

Consolidated gross profit for the three months ended June 30, 2025 was approximately $1.6 million, an increase of approximately $206,000, compared to approximately $1.4 million for the same period in 2024.

Selling, general and administrative expenses for 2025 and 2024 were as follows:

Consolidated selling, general and administrative expenses for the three months ended June 30, 2025 and 2024 were approximately $3.0 million and $2.9 million, respectively. The increase of approximately $163,000 is due to factors in several areas. Employee salaries and benefits expenses decreased approximately $56,000 for the three months ended June 30, 2025 compared to the same period in 2024. The Company decreased regulatory marketing, warehousing, and other selling, general and administrative by approximately $141,000. The Company recorded an increase in quality control, royalties’ expense, professional fees, and travel expenses of approximately $360,000 for the three months ended June 30, 2025 compared to the same period in 2024.

Research and Development for 2025 and 2024 were as follows:

Consolidated research and development expenses for the three months ended June 30, 2025 and 2024 were approximately $52,000 and $315,000, respectively. The decrease of approximately $263,000. The Company has decided to delay research and development on the STA Single Tooth Anesthesia System next generation instrument.

Profit (Loss) from Operations for 2025 and 2024 were as follows:

The loss from operations was approximately $1.5 million and $ 1.8 million for the three months ended June 30, 2025 and 2024, respectively, a decrease of approximately $296,000. The decrease is due to an increase in salaries and a reduction in selling, general, and administrative expenses.

Six months ended June 30, 2025 compared to six months ended June 30, 2024

Net sales for 2025 and 2024 were as follows:

Consolidated revenue for the six months ended June 30, 2025 and 2024, was approximately $4.6 million, an increase of approximately $453,000. E-Commerce and dental service revenue for the six months ended June 30, 2025 was approximately $2.6 million and $2.7 million, respectively, an increase of approximately $0.1 million. For the six months ended June 30, 2025, international revenue was approximately $1.9 million and $1.4 million an increase of $500,000, compared to June 30, 2024. For the six months ended June 30, 2025, sales in China revenue was approximately $110,000, compared to zero as of June 30, 2024. For the six months ended June 30, 2025 and 2024, medical revenue was approximately $83,000 and $26,000, respectively, an increase of $57,000, compared to June 30, 2024.

Gross Profit for 2025 and 2024 were as follows:

Consolidated gross profit for the six months ended June 30, 2025 was approximately $3.3 million, an increase of approximately $178,000, compared to approximately $3.1 million for the same period in 2024.

Selling, general and administrative expenses for 2025 and 2024 were as follows:

Consolidated selling, general and administrative expenses for the six months ended June 30, 2025 and 2024 were approximately $6.3 million and $5.9 million, respectively. The increase of approximately $384,000 is due to factors in several areas. Employee salaries and benefits expenses decreased approximately $137,000 for the six months ended June 30, 2025 compared to the same period in 2024. The Company decreased regulatory marketing, warehousing, and other selling, general and administrative by approximately $176,000. The Company recorded an increase in quality control, royalty expenses, travel expenses, and professional fees of approximately $696,000 for the six months ended June 30, 2025 compared to the same period in 2024.

Research and Development for 2025 and 2024 were as follows:

Consolidated research and development expenses for the six months ended June 30, 2025 and 2024 were approximately $421,000 and $409,000, respectively. The increase of approximately $12,000 is related to the Company's development of the next generation STA Single Tooth Anesthesia System, The Company has also decided to delay research and development on the STA Single Tooth Anesthesia System next generation instrument.

Profit (Loss) from Operations for 2025 and 2024 were as follows:

The loss from operations was approximately $3.5 million and $3.2 million for the six months ended June 30, 2025 and 2024, respectively, a decrease of approximately $237,000.

Liquidity and Capital Resources

Cash Flows

The following table summarizes our sources and uses of cash for six months ended:

Operating Activities

Cash flows from operating activities increased by $2.3 million for the six months ended June 30, 2025 compared to June 30, 2024. The increase was driven by an increase in net loss of $2.3 million.

Investing Activities

Cash flows from investing activities decreased $3.0 million for the six months ended June 30, 2025 compared to June 30, 2024. The Company sold $3.0 million of marketable securities during the six months ended June 30, 2024 which increased cash and equivalents $3.0 million. As of June 30, 2025 the Company had no marketable securities.

Financing Activities

Cash flows from financing activities increased $0.6 million for the six months ended June 30, 2025 compared June 30, 2024 due to the issuance of $0.8 million of Notes payable during the six months ended June 30, 2025 as compared to an issuance of a public placement offering of $0.2 million during the six months ended June 30, 2024.

Consideration of Company’s ability to continue as a going concern

Our financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company on a going concern basis. The going concern basis assumes that assets are realized, and liabilities are extinguished in the ordinary course of business at amounts disclosed in the financial statements.

The Company has incurred total losses since the inception of $131.5 million. The Company’s operating losses were approximately $1.5 million and $3.5 million, for the three and six months ending June 30 2025, respectively. On June 30, 2025, Milestone Scientific had cash and cash equivalents of approximately $1.3 million and working capital of approximately $3.9 million. For the six months ending June 30, 2025 and 2024, we had cash flows used in operating activities of approximately $2.8 million and $0.4 million, respectively.

Based on our available cash and cash equivalents, recurring losses, accumulated deficit and the need to raise additional capital to finance operations, including proceeds received from the note financing received in April 2025, as of June 30, 2025, we have concluded that there is substantial doubt about our ability to continue as a going concern for a period of one year from the date that these unaudited condensed financial statements are issued.

We will seek additional funding through equity financings or debt financings to support our current operating plan. Although management intends to pursue plans to obtain additional funding to finance its operations, and we have successfully raised capital in the past, we may not be able to obtain financing on acceptable terms, or at all. The terms of any financing may adversely affect the holdings or rights of the Company’s stockholders.

We are actively pursuing the generation of positive cash flows from operating activities through an increase in revenue from its dental business worldwide, the generation of revenue from its medical devices and disposables business in the United States and worldwide, and a reduction in operating expenses. However, our continued operations will depend on its ability to raise additional capital through various potential sources until it achieves profitability, if ever.

Milestone Scientific is a “smaller reporting company” as defined by Regulation S-K and, as such, is not required to provide the information required by this item.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Principal Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Principal Accounting Officer concluded that, as of June 30, 2025, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

We routinely review our internal control over financial reporting and from time to time make changes intended to enhance the effectiveness of our internal control over financial reporting. During the period ended June 30, 2025, we made no changes to our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that we believe materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except as disclosed below, there have been no material changes to the risk factors previously disclosed in Part I, Item 1A, of our 2024 Annual Report.

Changes to United States tariff and import/export regulations may have a material adverse effect on our business, financial condition, and results of operations.

The United States has recently enacted and proposed to enact significant new tariffs, and President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy. There has been and are ongoing discussions and commentaries regarding potential significant changes to U.S. trade policies, treaties, and tariffs. There exists significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties, and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. We source important elements used in our products from China, and we have significant sales in jurisdictions outside the United States. Any of these factors could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on our business, financial condition, and results of operations.

Government Action on tariffs and research grants and other funding may impede our ability to conduct our research and to raise capital.

Early 2025 federal government actions to impose tariffs and limit research grants and other funding, including funding universities and research enterprises, may cause disruption to our business. These actions include the imposition of tariffs and ending or restructuring government research funding generally or in conjunction with higher learning institutional funding. These government actions have been only recently implemented, therefore the full impact has yet to be realized by the Company. Nonetheless, (i) tariffs are likely to increase the cost of doing business and to make it more difficult to obtain items where imported equipment is required by our own activities and the activities of our collaborative and research partners, and (ii) ending or reducing research funding is likely to make it more difficult to find collaborative research partners to work with us as government funding is an indirect support for our research and product development activities. We also believe that as research funding impacts our collaborative research partners is reduced or withdrawn, it will make raising capital for the Company more difficult, as investors will want to know if the Company will be able to use the proceeds with fully funded entities for product development.

Item1B. Unresolved Staff Comments

None.