MILESTONE SCIENTIFIC INC. 10-K

Item 5. Market for Common Equity, and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities Market Information Since June 1, 2015, our common stock has been listed on the NYSE American under the symbol “MLSS”. The following table sets forth the high and low sales prices of Milestone’s common stock for the periods presented. 2024 High Low 2023 High Low First Quarter $ 0.78 $ 0.52 First Quarter $ 1.00 $ 0.46 Second Quarter $ 0.85 $ 0.54 Second Quarter $ 1.22 $ 0.72 Third Quarter $ 1.10 $ 0.58 Third Quarter $ 1.35 $ 0.81 Fourth Quarter $ 1.05 $ 0.60 Fourth Quarter $ 1.00 $ 0.56 Holders 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. Dividends The holders of common stock are entitled to receive such dividends as may be declared by Milestone Scientific’s Board of Directors. Milestone Scientific has not paid and does not expect to declare or pay any dividends in the foreseeable future. Sales of Unregistered Securities Not applicable. Item 6. Selected Financial Data Milestone Scientific is a “smaller reporting company” as defined by Regulations S-K and as such, is not required to provide the information contained in this item pursuant to Regulation S-K. 23 Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations 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 included elsewhere in this annual report. 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. See "Risk Factors" elsewhere in this Form 10-K. 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, that 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. 24 Our dental devices have been used to administer over 95 million injections worldwide. Each of our devices has a related single use 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 whose opinions are widely respected), industry experts and medical and dental practitioners as a leader in the emerging, computer-controlled injection industry. 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 that could increase the potential number of anesthesia pain management clinics adopting the CompuFlo instrument. 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, which should help accelerate the commercial roll-out of CompuFlo in the United States. On February 27, 2023, the Company announced that its CompuFlo® Epidural System has received 510(k) FDA clearance for use in the thoracic region of the spine, including the cervical thoracic junction. 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. 25 On July 30, 2024, the Company announced receipt of multiple Notices of Allowance (NOA) for essential patent applications in both the U.S. and Europe. 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: Year Ended December 31, 2024 Year Ended December 31, 2023 Domestic: US Dental Medical Grand Total Dental Medical Grand Total Instruments $ 806,885 $ 4,000 $ 810,885 $ 1,002,697 $ 1,000 $ 1,003,697 Handpieces 4,284,952 55,900 4,340,852 4,270,898 12,000 4,282,898 Accessories 49,112 - 49,112 75,285 - 75,285 Grand Total $ 5,140,949 $ 59,900 $ 5,200,849 $ 5,348,880 $ 13,000 $ 5,361,880 International: Rest of World Instruments $ 868,169 $ 39,000 $ 907,169 $ 1,251,354 $ 25,000 $ 1,276,354 Handpieces 2,476,988 3,920 2,480,908 2,845,734 28,000 2,873,734 Accessories 41,002 - 41,002 45,476 - 45,476 Grand Total $ 3,386,159 $ 42,920 $ 3,429,079 $ 4,142,564 $ 53,000 $ 4,195,564 International: China Instruments $ - $ - $ - $ 270,000 $ - $ 270,000 Handpieces - - - - - - Accessories - - - - - - Grand Total $ - $ - $ - $ 270,000 $ - $ 270,000 Total Product Sales $ 8,527,108 $ 102,820 $ 8,629,928 $ 9,761,444 $ 66,000 $ 9,827,444 Current Product Platform See Item 1. Description of Business. Summary of Critical Accounting 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. For a detailed discussion of significant accounting policies, see Note C. 26 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 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. Results of Operations 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. For the year end December 31, 2024, compared to year ended December 31, 2023. 2024 2023 Operating results: Product sales, net $ 8,629,928 $ 9,827,444 Cost of products sold 2,195,340 3,034,832 Gross profit 6,434,588 6,792,612 Operating expenses: Selling, general and administrative expenses 12,295,330 13,135,796 Research and development expenses 858,767 701,378 Depreciation and amortization expense 37,448 61,912 Total operating expenses 13,191,545 13,899,086 Loss from operations (6,756,957 ) (7,106,474 ) Interest income 60,265 125,527 Gain on sale of net operating losses 1,983,095 - Net loss (4,713,597 ) (6,980,947 ) Net loss attributable to noncontrolling interests - (51,843 ) Net loss attributable to Milestone Scientific Inc. $ (4,713,597 ) $ (6,929,104 ) 27 Net sales for year ended December 31, 2024, compared to year ended December 31, 2023 2024 2023 Change Dental $ 8,527,108 $ 9,761,444 $ (1,234,336 ) Medical 102,820 66,000 36,820 Total sales, net $ 8,629,928 $ 9,827,444 $ (1,197,516 ) 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, 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. distributors was approximately $9,000 for the year ended December 31, 2024, a decrease of $476,000 compared to December 31, 2023. The Company terminated all non-exclusive agreements with other distributors in the US in September 2023. For the year ended December 31, 2024, international revenue was approximately $3.4 million, a decrease of $756,000 compared to December 31, 2023. 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: 2024 2023 Change Dental $ 6,340,966 $ 7,030,018 $ (689,052 ) Medical 93,622 (237,406 ) 331,028 Total gross profit $ 6,434,588 $ 6,792,612 $ (358,024 ) 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: 2024 2023 Change Dental $ 3,929,073 $ 4,330,219 $ (401,146 ) Medical 2,128,456 3,381,551 (1,253,095 ) Corporate 6,237,801 5,424,026 813,775 Total selling, general and administrative expenses $ 12,295,330 $ 13,135,796 $ (840,466 ) 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 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: 2024 2023 Change Dental $ 835,851 $ 614,952 $ 220,899 Medical 22,916 86,426 (63,510 ) Corporate - - - Total research and development $ 858,767 $ 701,378 $ 157,389 28 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: 2024 2023 Change Dental $ 1,576,043 $ 2,128,199 $ (552,156 ) Medical (2,057,751 ) (3,708,170 ) 1,650,419 Corporate (6,275,249 ) (5,526,503 ) (748,746 ) Total loss from operations $ (6,756,957 ) $ (7,106,474 ) $ 349,517 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 C ash Flows The following table summarizes our sources and uses of cash for each of the periods presented: Cash flow: 2024 2023 Change Net cash used in operating activities $ (2,919,875 ) $ (5,326,129 ) $ 2,406,254 Net cash provided by (used in) investing activities 2,966,449 (2,972,172 ) 5,938,621 Net cash provided by financing activities 233,771 2,560,735 (2,326,964 ) $ 280,345 $ (5,737,566 ) $ 6,017,911 Operating Activities 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 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 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. 29 Contractual Obligations The impact of the consolidated contractual obligations on December 31, 2024, expected on the liquidity and cash flows in future periods, is as follows: Payments Due by Period Total Less than 1 Year 1-3 Years 3-5 Years Operating lease obligations $ 379,051 150,011 215,606 13,434 Purchase obligations $ 2,754,160 1,350,420 1,403,740 - Total $ 3,133,211 1,500,431 1,619,346 13,434 Recent Accounting Pronouncements See “Note C - Summary of Significant Accounting Policies” to the consolidated financial statements for explanation of recent accounting pronouncements impacting Milestone Scientific. Item 7A. Quantitative and Qualitative Disclosures about Market Risk 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. Item 8. Financial Statements The financial statements of Milestone Scientific required by this Item are set forth beginning on page F-1. Item 9. Change in and Disagreements with Accountants on Accounting and Financial Disclosure None 30