What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-04-15 compared with 2024-03-29 · 67 added, 72 removed, 118 unchanged (54% of the section changed)

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Fourth Quarter

As of March 29, 2024, we had approximate ly 97 stockholders of record of our common stock.

W e believe that, in addition to the record owners, we have approximately 3,318 beneficial owners of our common stock.

As of March 27, 2024, we had approximately 97 stockholders of record of our common stock.

We believe that, in addition to the record owners, we have approximately 3,488 beneficial owners of our common stock.

The holders of common stock are entitled to receive such dividends as may be declared by Milestone Scientific’s Board of Directors.

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It has specific medical applications for epidural space identification in regional anesthesia procedures.

Our device, using 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.

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.

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This approval expands upon the Company’s prior approval of CompuFlo for use within the lumbar region of the spine, where the focus has been epidural analgesia during labor and delivery procedures.

On June 18, 2024, the Company announced that it has received regulatory approval from Brazil's National Health Surveillance Agency (ANVISA) to market and sell its CompuFlo® Epidural System in Brazil.

The approval includes the lumbar, thoracic, and cervical-thoracic junction of the spine.

On July 10, 2024, the Company announced that First Coast Service Options Inc.

(FCSO), a Jurisdictional Medicare Administrative Contractor (“JMAC”), has granted favorable Medicare Part B physician price assignment across Florida for use of the Company’s CompuFlo® Epidural System under the American Medical Association’s (AMA) technology-specific Category III CPT® code CPT0777T (real-time pressure-sensing epidural guidance system when used in conjunction with a primary ESI procedure).

On July 23, 2024 the Company announced that Novitas Solutions, Inc.

(Novitas), a Jurisdictional Medicare Administrative Contractor (JMAC), had granted a Medicare Part B Physician payment rate for the Company’s CompuFlo® Epidural System under the American Medical Association’s (AMA) technology-specific Category III CPT® code CPT0777T (real-time pressure-sensing epidural guidance system when used in conjunction with a primary ESI procedure).This new price assignment applies to two Medicare regions:

Jurisdiction L (JL) and Jurisdiction H (JH).

JL includes Delaware, District of Columbia, Maryland, New Jersey, and Pennsylvania.

JH includes Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas.

On July 30, 2024, the Company announced receipt of multiple Notices of Allowance (NOA) for essential patent applications in both the U.S.

One NOAs was granted by the U.S.

Patent and Trademark Office and one NOA was granted by the European Patent Office for a new patent titled “ Device and Method for Needle/Catheter Location Utilizing Correlation Analysis .” These patent applications cover Milestone Scientific’s next-generation Dynamic Pressure Sensing® (DPS) technology for real-time pressure-sensing guidance in manual injection systems

On August 7, 2024, the Company announced a strategic partnership with Axial Biologics, a premier medical device company with a vast distribution network.

Under the agreement, Axial Biologics will serve as the distributor of Milestone Scientific's CompuFlo® Epidural System in New Jersey, Texas, and Florida jurisdictions.

On October 3, 2024, the Company announced that iHeal Pain Center had adopted the CompuFlo® Epidural System following successful epidural steroid injection (ESI).

On November 26,2024, the Company announced its approval on contract for the Federal Supply Schedule (FSS), also known as the GSA Schedule, for 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:

International:

Rest of World

International:

Total Product Sales

Year Ended December 31, 2024

Year Ended December 31, 2023

International:

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Summary of Critical Accounting Estimates

The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an on-going basis, Milestone Scientific evaluates its estimates, including those related inventory valuation and cash flow assumptions regarding evaluations for going concern considerations.

Milestone Scientific bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not clear from other sources.

Actual results may differ from those estimates under different assumptions or conditions.

Our accounting policies are more fully described in Note C of the financial statements to this Annual Report on Form 10-K.

As disclosed in Note C, the preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes.

Actual results could differ significantly from those estimates.

We have identified the accounting estimates below as critical to the understanding of our results of operations and our financial condition.

In applying these critical accounting estimates in preparing our financial statements, management must use critical assumptions, estimates and judgments concerning future results or other developments, including the likelihood, timing or amount of one or more future events.

Actual results may differ from these estimates under different assumptions or conditions.

On an ongoing basis, we evaluate our assumptions, estimates and judgments based upon historical experience and various other information that we believe to be reasonable under the circumstances.

Management reviews revenue, and its cash position on regularly basis along with the company inventory needs.

We believe that the following discussion addresses our most critical accounting estimates, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments.

Assessment of our Ability to Continue as a Going Concern

In accordance with (“ASC”) 205-40, “Presentation of Financial Statements – Going Concern”, the Company continually evaluates whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

Milestone Scientific has incurred operating losses and negative cash flows from operating activities in virtually each year since its inception.

The Company has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

The Company has incurred total losses since inception of $123.3 million.

The operating losses were $7.1 million and $8.8 million, for the years ended December 31, 2023, and 2022, respectively.

On December 31, 2023, Milestone Scientific had cash and cash equivalents and marketable securities of approximately $6.0 million and working capital of approximately $7.7 million.

For the twelve months ended December 31, 2023 and 2022, we had cash flows used in operating activities of approximately $5.3 million and $6.0 million, respectively.

Management has prepared cashflow forecasts covering a period of 12 months from the date of issuance of these financial statements.

These forecasts include several revenue and operating expense assumptions which indicate that the Company’s current cash and liquidity is sufficient to finance the operating requirements for at least the next 12 months.

Additionally, the Company was approved on September 12, 2023 to sell Net Operating Losses through the New Jersey Technology Business Tax Certificate Transfer Program (“NJ NOL Program”), a program administered by the New Jersey Economic Development Authority (“NJEDA”).

Management believes this program will generate positive cash flow in the near future.

Milestone Scientific is 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, the Company’s continued operations will depend on its ability to raise additional capital through various potential sources until it achieves profitability, if ever.

Inventories principally consist of finished goods and component parts stated at the lower of cost (first-in, first-out method) or net realizable value.

For a detailed discussion of significant accounting policies, see Note C.

Going Concern and Liquidity

Management has developed and is implementing plans to increase revenues and decrease professional and consulting fees over the next twelve months.

The Company has also decided to delay all research and development on the Single Tooth Anesthesia System next generation instrument.

The Company believes that our existing cash and cash equivalents along with management plans, and the $800,000 in related party note financing received in April 2025 (See Note P) will be sufficient to enable the Company to fund operations for the twelve months from the issuance of these financial statements and alleviates substantial doubt about the Company’s ability to continue as a going concern.

Inventories principally consist of finished goods and component parts stated at the lower cost (first-in, first-out method) or net realizable value.

Inventory quantities on hand are reviewed on a quarterly basis and a provision for excess and obsolete inventory is recorded if required based on past and expected future sales, potential technological obsolescence and product expiration requirement and regulations.

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The following table sets forth the consolidated results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Year end December 31, 2023, compared to year ended December 31, 2022.

December 31, 2023

December 31, 2022

For the year end December 31, 2024, compared to year ended December 31, 2023.

Operating results:

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Loss from operations

Other income, and interest net

Interest income

Gain on sale of net operating losses

Net loss attributable to noncontrolling interests

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Total sales, net

Consolidated revenue for the years ended December 31, 2023 and 2022 was approximately $9.8 million and $8.8 million, respectively, an increase of approximately $1.0 million.

Consolidated revenue for the years ended December 31, 2024 and 2023 was approximately $8.6 million and $9.8 million, respectively, a decrease of approximately $1.2 million.

As of January 3, 2023, the Company launched an E-Commerce platform, selling and shipping the STA Single Tooth Anesthesia System® (STA) and handpieces directly to end users, including dental offices and dental groups, within the U.S.

E-commerce revenue for the year ended December 31, 2023 was approximately $4.8 million.

The Company ended the agreement with its major United States distributor, Henry Schein, as of December 31, 2022.

The Company recorded no revenue from Henry Schein for the year ended December 31, 2023, compared to approximately $2.6 million recorded for the year ended December 31, 2022.

E-commerce revenue for the year ended December 31, 2024 was approximately $5.1 million as compared to $4.8 million for the year ended December 31, 2023.

The Company recorded no revenue from Henry Schein for the year ended December 31, 2024, compared to approximately $179,000 recorded for the year ended December 31, 2023.

Revenue from other U.S.

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For the year ended December 31, 2024, international revenue was approximately $3.4 million, a decrease of $756,000 compared to December 31, 2023.

For the year ended December 31, 2023, the Company reported approximately $270,000 revenue from China, a decrease of approximately $356,000.

The decrease in international revenue is due low performing markets and shipping delays.

For the year ended December 31, 2024, the Company reported zero revenue from China, a decrease of approximately $270,000.

For the year ended December 31, 2024, medical revenue increased approximately $37,000 compared to December 31, 2023.

Gross Profit for years ended December 31, 2024, and 2023 were as follows:

Total gross profit

Consolidated gross profit for the year ended December 31, 2023 increased by approximately 1.9 million or 40%, compared to the same period in 2022.

The increase was due to higher margins in sales associated with the launch of E-Commerce platform.

The Company recorded approximately $258,000 and $550,000 allowance for medical inventory that was obsolete and or expired for the years ended December 31, 2023 and 2022, respectively.

Consolidated gross profit for the year ended December 31, 2024 decreased by approximately $358,000 or 5%, compared to the same period in 2023.

Dental gross profit for the years ended December 31, 2024 and 2023 we approximately 74% and 72% respectively.

The decrease was due to higher margins in sales associated with the launch of E-Commerce platform offset by lower international sales.

The Company recorded approximately $258,000 allowance for medical inventory that was obsolete and or expired for the year ended December 31, 2023.

Selling, general and administrative expenses for years ended December 31, 2024, and 2023 were as follows:

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Consolidated selling, general and administrative expenses for the years ended December 31, 2024 and 2023 were approximately$12.3 million and $13.1 million, respectively.

The increase of approximately $621,000 is due to several factors.

Employee salaries and benefits expenses increased approximately $44,000 for the year ended December 31, 2023 compared to the same period in 2022.

The Company decreased quality control, regulatory, and travel expenses by approximately $367,000 compared to the same period in 2022.

The Company increased professional fees, and royalties’ expenses by approximately $317,000 compared to the same period in 2022.With the launch of the E-Commerce platform marketing and warehousing expense increased for the year ended December 31, 2023, by approximately $320,000 compared to the same period in 2022.

The Company recorded an increase in other selling, general and administrative expenses of approximately $306,000 for the year ended December 31, 2023, compared to the same period in 2022 due to the launch of E-Commerce.

The decrease of approximately $840,000 is due to several factors.

Employee salaries and benefits expenses decreased approximately $654,000 for the year ended December 31, 2024 compared to the same period in 2023.

The Company decreased warehousing, marketing, regulatory, royalties’ and travel expenses by approximately $324,000 compared to the same period in 2023.

The Company increased professional fees, and quality control by approximately $305,000 compared to the same period in 2023.

The Company recorded and decreased in other selling, general and administrative expenses of approximately $167,000 for the year ended December 31, 2024, compared to the same period in 2023 due to the launch of E-Commerce.

Research and Development for years ended December 31, 2024, and 2023 were as follows:

Total research and development

Consolidated research and development expenses for the years ended December 31, 2023 and 2022 were approximately $701,000 and $1.2 million respectively.

The decrease of approximately $449,000 is related to the Company's near completion in developing the next generation STA Single Tooth Anesthesia System, offset by an increase in medical cost for the epidural consumables.

Profit (Loss) from Operations for 2023 and 2022 were as follows:

Consolidated research and development expenses for the years ended December 31, 2024 and 2023 were approximately $859,000 and $701,000 respectively.

The increase of approximately $157,000 is related to the Company's development of the next generation STA Single Tooth Anesthesia System, offset by a decrease in medical expenses relating to the epidural consumables development.

The Company has also decided to delay all research and development on the STA Single Tooth Anesthesia System next generation instrument

Loss from Operations for 2024 and 2023 were as follows:

Total loss from operations

The loss from operations was approximately $7.2 million and $8.8 million for the years ended December 31, 2023 and 2022, respectively, a decrease of approximately $1.7 million.

As stated above, the decrease in the loss from operations is driven by higher dental sales, and increased margins, which offset the higher selling, general and administrative expenses during period.

The loss from operations was approximately $6.8 million and $7.1 million for the years ended December 31, 2024 and 2023, respectively, a decrease of approximately $350,000.

As stated above, the decrease in the loss from operations is driven by increased margins in E-Commerce dentals sales, offset by lower international dental sales and lower selling, general and administrative expenses during period.

Liquidity and Capital Resources

The following table summarizes our sources and uses of cash for each of the periods presented:

Cash flows used in operating activities

Cash flows used in investing activities

Cash flows provided by (used in) financing activities

Net cash used in operating activities

Net cash provided by (used in) investing activities

Net cash provided by financing activities

Operating Activities

Cash flows used in operating activities decreased $0.7 million from $6.0 million for the year ended December 31, 2022 compared to $5.3 million for the year ended December 31, 2023.

The decrease was driven by an increase of $0.8 million in cash used in work capital activities offset by employees paid in common stock of $0.1 million.

Cash flows used in operating activities decreased by $2.4 million for the year ended December 31, 2024 compared to December 31, 2023.

The decrease was primarily driven by our receipt of approximately $2.0 million, net of expenses, from the sale of New Jersey net operating losses ‘(NOL”), that were eligible for sale under the State of New Jersey’s Economic Development Authority’s New Jersey Technology Business Tax Certificate Transfer program (“NJEDA Program”).

Investing Activities

Cash flows used in investing activities increased $3.0 million for the year ended December 31, 2023 compared to an immaterial amount for the year ended December 31, 2022.

The increase in cash used in investing activities was driven by the Company’s purchase of marketable securities of $7.9 million, offset by the sale of $5.0 million of marketable securities during the current year.

Cash flows provided by investing activities was $3.0 million for the year ended December 31, 2024, compared to $3.0 million of cash flows used in investing activities for the year ended December 31, 2023, an increase of $6.0 million.

We sold $3.0 million of marketable securities during the year ending December 31, 2024, compared to $5.0 million sold during the year ended December 31, 2023, which increased cash and equivalents by $2.0 million.

We purchased approximately $8.0 million in marketable security during the during the year ending December 31, 2023 compared to no purchases made during the year ended December 31, 2024.

Financing Activities

Cash flows provided by financing activities increased $2.6 million for the year ended December 31, 2023, compared to an immaterial amount for the year ended December 31, 2022.

The increase in cash used in financing activities was the result of gross proceeds of approximately $3.0 million received from a public offering of common stock, offset by $0.4 million of offering costs associated with the public offering during the current year.

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

The Company has incurred total losses since inception of $123.3 million.

The operating losses were $7.1 million and $8.8 million, for the years ended December 31, 2023, and 2022, respectively.

On December 31, 2023, Milestone Scientific had cash and cash equivalents and marketable securities of approximately $6.0 million and working capital of approximately $7.7 million.

For the twelve months ended December 31, 2023 and 2022, we had cash flows used in operating activities of approximately $5.3 million and $6.0 million, respectively.

Management believes this program will generate positive cash flow in the near future.

Management has prepared cashflow forecasts covering a period of 12 months from the date of issuance of these financial statements.

However, the Company’s continued operations will depend on its ability to raise additional capital through various potential sources until it achieves profitability, if ever.

Cash flows provided by financing activities decreased $2.3 million to $0.2 million for the year ended December 31, 2024 compared to $2.6 million for the year ended December 31, 2023.

The decrease in cash used in financing activities was the result of gross proceeds of approximately $3.0 million received from a public offering of common stock, offset by $0.4 million of offering costs associated with the public offering during the year ended December 31, 2023, that did not recur during the year ended December 31, 2024.

Contractual Obligations

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Payments Due by Period

Less than 1 Year

Operating lease obligations

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity