MILESTONE SCIENTIFIC INC. 10-K

Item 1A. Risk Factors You should carefully consider the risks and uncertainties described below, together with the other information included in this Annual Report on Form 10-K. If any of the risks described below occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected. The risks described below are not the only risks we face. Additional risks and uncertainties that we do not currently know about, or that we currently believe are immaterial, also may materially and adversely affect our business, financial condition, results of operations, and/or prospects. These disclosures reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. Risks Related to Our Financial Position and Need for Additional Capital We have incurred significant losses since our inception. These operating losses are expected to continue and we are unable to predict the extent of future losses, whether we will generate significant revenues, or whether we will achieve or sustain profitability. We are a small, non-diversified medical device company with a history of limited revenue and significant operating losses and our prospects must be evaluated considering the uncertainties, risks, expenses, and difficulties frequently encountered by similarly situated companies. We have generated net losses in all periods since inception, including operating losses of $5.7 million and $6.8 million for the years ended December 31, 2025, and 2024, respectively. These losses have adversely affected, and are expected to continue to affect adversely, our working capital, total assets, and stockholders’ equity. 9 Because of the risks and uncertainties associated with product acceptance, sales expansion, and competitive conditions, we cannot predict the extent of future losses, whether we will generate significant revenues, or whether we will achieve or sustain profitability. Even if we become profitable, we may not be able to maintain or increase profitability on a quarterly or annual basis. If we do not generate sufficient profits from operations and become and remain profitable, our ability to raise capital, expand our business, maintain our commercial efforts, or continue operations could be impaired. In addition, a decline in our valuation could cause stockholders to lose all or part of their investment. We anticipate that we will need additional funding for our operations and may be unable to raise capital when needed, which may force us to delay, curtail, or eliminate parts of the Company ’ s operations. Our operations have consumed substantial cash since inception. Net cash used in operating activities was approximately $2.9 million for the years ended December 31, 2025, and 2024, respectively. We believe our near-term viability depends on our ability to raise additional capital to finance operations through public or private equity offerings, collaborations, licensing arrangements, or other sources. Although we intend to pursue additional funding, there can be no assurance that we will obtain sufficient capital on acceptable terms, or at all. If we cannot raise capital when needed, we may be forced to delay, curtail, or eliminate research and development programs or other operations. See also the risk factor titled “ If we fail to regain compliance with the strict listing requirements of NYSE American, we may be subject to delisting. As a result, our stock price may decline, and our common stock may be delisted. If our stock were no longer listed on NYSE American, the liquidity of our securities likely would be impaired. ” Sales of a substantial number of shares of our common stock, or the perception that such sales may occur, may adversely impact the price of our common stock. Almost all our 80,453,116 outstanding shares of common stock on December 31, 2025, are available for sale in the public market, either freely or pursuant to Rule 144 under the Securities Act of 1933, as amended. Sales of a substantial number of shares of our common stock, or the perception that such sales may occur, may adversely impact the price of our common stock. Raising additional capital by issuing securities or through licensing or lending arrangements may cause dilution to our existing stockholders, restrict our operations, or require us to relinquish proprietary rights. If we raise additional capital through the issuance of equity securities, the share ownership of existing stockholders will experience dilution. Debt financing could include covenants that restrict our operations, including limitations on our ability to incur liens or additional indebtedness, pay dividends, redeem stock, make certain investments, or engage in particular merger, consolidation, or asset sale transactions. If we raise funds through licensing arrangements or asset dispositions, we may be required to relinquish valuable rights to product candidates or grant licenses on terms that are unfavorable. Financial institution instability could adversely affect our operations and financial condition. We maintain deposits that may exceed FDIC insurance limits. If our financial institution experiences distress or failure, we could experience delayed access to, or a loss of, uninsured deposits or other financial assets. Although U.S. government agencies provided access to uninsured deposits in connection with the Silicon Valley Bank crisis, there is no assurance that similar actions would occur in the future or occur promptly. We are evaluating our banking relationships to increase the portion of deposits that are fully insured or invested in risk-free instruments. Any non-performance by financial institutions could adversely affect our business operations and financial condition, including through impaired access to cash, loss of deposits, or disruptions affecting our customers or vendors. In addition, any further deterioration in the macroeconomic economy or financial services industry, or delayed access or loss of uninsured deposits or loss of the ability to draw on existing credit facilities involving a troubled or failed financial institution by our customers or vendors, could lead to losses or defaults by companies with whom we do business, which in turn could have a material adverse effect on our current and/or projected business operations, results of operations and financial condition. In addition, other companies could be adversely affected by any of the liquidity or other risks that are described above as factors that could result in material adverse impacts on us, including but not limited to delayed access or loss of uninsured deposits or loss of the ability to draw on existing credit facilities involving a troubled or failed financial institution. Our financial statements have been prepared on a going concern basis, but there can be no assurance that we will be able to continue as a going concern without raising additional capital. Due to our available cash and cash equivalents, recurring losses, accumulated deficit, and the need to raise additional capital to finance operations, there is substantial doubt as to our ability to continue as a going concern without raising additional capital. 10 Risks Related to Sales and Distribution of Our Products Our sales and marketing efforts in the United States rely upon its E-Commerce platform. We believe that a significant portion of our sales will continue to be from its E-Commerce platform launched in January 2023, for the foreseeable future. Currently, sales of the STA Single Tooth Anesthesia Systems® (STA) and handpieces in the United States are reliant on E-Commerce sales. We have exposure to risks of operating in an E-commerce platform: ● Refunds and customer disputes due to issues like wrong product delivery or defective items can impact our business; ● Online security breaches and cyberattacks; ● Poor search engine visibility affects traffic and sales; and ● Unexpected changes in political or regulatory environments. If we are unable to maintain or expand our E-Commerce platform, our sales will be negatively affected. We are exposed to the risks inherent in international sales. In 2025, export sales outside the United States represented approximately 45% of total sales, and we sold products in approximately 37 countries and U.S. territories. International operations expose us to risks including foreign currency fluctuations, limitations on currency conversion and repatriation, compliance with complex laws and regulations, political and economic instability, tariffs and other trade barriers, and challenges in obtaining approvals for significant transactions. These risks could adversely affect our sales and operating results. If physicians neither accept nor use our CompuFlo Epidural System, our ability to generate revenue from sales will be materially impaired. There is no assurance that physicians, hospitals, clinics, and other healthcare providers will accept and use the CompuFlo Epidural System. Market acceptance depends on many factors, including perceived safety and effectiveness, cost-effectiveness relative to competing products, convenience and reliability, patient satisfaction, product availability, warranty and technical support, reimbursement availability, and the effectiveness of our marketing and distribution., Because we expect sales of the CompuFlo Epidural Computer Controlled Anesthesia System to generate substantially all our medical product revenues in the near-term, the failure of this product to find market acceptance would harm our medical business. It could require us to seek additional financing or make such financing difficult to obtain on favorable terms, if at all. Since the Company generates a significant portion of its net sales from a single product category, a decline in demand for that product could significantly impact our net sales and gross margins. If our technology does not perform as expected, or if we fail to successfully develop, commercialize, or sell new or enhanced products or penetrate new markets, our business, financial condition, and operating results could be adversely affected. Our ability to compete successfully depends on our ability to design, develop, manufacture, assemble, test, market, and support new products and product enhancements in a timely and cost-effective manner that keeps pace with evolving market needs and customer demands. Our success and competitive position are dependent on the performance, reliability, and continued advancement of the technologies we have developed and may develop in the future. There is a risk that our existing or future technologies may not function as intended, may not achieve anticipated performance levels, or may fail to gain market acceptance. The markets in which our customers and we compete are characterized by rapid technological change and frequent product obsolescence. A significant technological shift in our target markets could adversely affect our competitive position. If we fail to anticipate technological developments, develop new technologies, or respond effectively to changes in existing technologies, the attractiveness of our products could be adversely affected, resulting in product obsolescence, reduced revenue, and the loss of customers to competitors. Innovation is critical to our long-term success, and we must continue to enhance existing products and develop new products with improved capabilities to maintain our competitive position. The development of new technologies and products requires substantial investment and involves prolonged development, testing and approval cycles before products can be commercially marketed. While we intend to continue investing in the development of new and enhanced products, our ability to do so depends on the availability of sufficient financial resources. As part of our cash management plan, we have delayed all research and development on our Single Tooth Anesthesia System next-generation instrument. We may not be able to develop or acquire new products or enhancements that compete effectively in our target markets or that sufficiently differentiate our offerings based on functionality, performance, or cost. However, difficulties or delays in research, development, or production, failure to achieve market acceptance of new or enhanced products, or an inability to manage the transition from older products to new offerings effectively could adversely affect sales, inventory levels, cash flows, and liquidity. In addition, we may be unable to recover our research and development investments or achieve meaningful revenue from new technologies. 11 Developments by competitors may render our products or technologies obsolete or non-competitive. The medical device industry is intensely competitive and subject to rapid and significant technological change. We expect that other companies (or individuals), whether located in the United States or abroad, will pursue the development of alternative injection-based or imaging-based systems that will compete with our products. Many of these potential competitors have substantially greater capital resources, larger research and development staffs and facilities, longer product development history in obtaining regulatory approvals and greater manufacturing and marketing capabilities than we do. These companies also compete with us to attract qualified personnel and parties for acquisitions, joint ventures, or other collaborations. As a result, we may not be able to compete effectively against these companies or their products. Our ability to commercialize our products will depend in part on the extent to which reimbursement will be available from governmental agencies, health administration authorities, private health maintenance organizations, health insurers, and other healthcare payers. Our ability to generate revenues from our products will be diminished if the products sell for inadequate prices or hospitals or physicians are unable to obtain adequate levels of reimbursement for the cost they incur in connection with the use of the product. Significant uncertainty exists as to the reimbursement status of legacy and newly approved healthcare products. Healthcare payers, including Medicare, are challenging the prices charged for medical products and services. Government and other healthcare payers increasingly attempt to contain healthcare costs by limiting both coverage and the level of reimbursement for products. Insurance coverage may not be available, or reimbursement levels may be inadequate to cover the charges for the use of such a product. If the government and other healthcare payers do not provide adequate coverage and reimbursement for any of our products, market acceptance of such products could be reduced. Prices in many countries, including many in Europe, are subject to local regulation and price controls. In the United States, where pricing levels for medical products, procedures and services are substantially established by third-party payors, including Medicare, if payors reduce the amount of reimbursement for a product, it may cause groups or individuals dispensing the product to discontinue use of the product, to substitute lower cost products even if the alternatives are less effective or to seek additional price-related concessions. These actions could have a negative effect on our financial results. The existence of direct and indirect price controls and pressures on our products could seriously affect our financial prospects and performance. Healthcare reform laws and regulations significantly affect the U.S. healthcare services industry. In recent years, many legislative ‎proposals have been introduced or proposed in Congress and in some state legislatures that would affect major changes in the healthcare system, either nationally or at the state level. At the federal level, Congress has continued to propose or ‎consider healthcare budgets that substantially reduce payments under the Medicare and Medicaid programs. Healthcare legislative reform measures may have a material adverse effect on our business and results of operations. In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect our ability to profitably sell any product candidates for which we obtain marketing approval. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality, and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ ACA ,”) was passed, which substantially changed the way healthcare is financed by both the government and private insurers and significantly impacts the U.S. pharmaceutical industry. Since its enactment, there have been judicial, congressional and executive branch challenges and amendments to certain aspects of the ACA. For example, on August 16, 2022, the Inflation Reduction Act of 2022 (“ IRA ”) was signed into law, which, among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary’s maximum out-of-pocket cost through a newly established manufacturer discount program. It is possible the ACA will be subject to judicial or congressional challenges and amendments in the future. On July 4, 2025, the annual reconciliation bill, the One Big Beautiful Bill Act (the “ OBBBA ”) was signed into law which is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. OBBBA also narrows access to the ACA marketplace exchange enrollment and declines to extend the ACA enhanced advanced premium tax credits, which expired in 2025, and which, among other provisions in the law, are expected to reduce the number of Americans with health insurance. 12 Also, there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which have resulted in several congressional inquiries, presidential executive orders, and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. For example, the IRA, among other things, (1) directs the U.S. Department of Health and Human Services (“ HHS ”) to negotiate the price of certain high-expenditure, single-source drugs covered under Medicare that have been on the market for at least 7 years (the “ Medicare Drug Price Negotiation Program ”) and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions began to take effect progressively in fiscal year 2023. On August 15, 2024, HHS announced the agreed-upon reimbursement prices of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges. On January 17, 2025, HHS elected up to fifteen additional products covered under Part D for price negotiation in 2025. Each year thereafter, more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program. On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights, which, for the first time, includes the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. New regulation of drugs may also cover new regulation of medical devices. Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (“ SIP ”) proposal to import certain drugs from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada. Other states have also submitted SIP proposals that are pending review by the FDA. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. We expect that additional state and federal healthcare reform measures will be adopted in the future. The current Trump administration is pursuing policies to reduce regulations and expenditures across government, including at HHS, the FDA, CMS, and related agencies. These actions, presently aimed at executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. These actions and proposals include, for example, (1) directives to reduce agency workforce and cut programs; (2) rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation to consider new payment and healthcare models to limit drug spending; (3) eliminating the Biden administration’s executive order that directed HHS to establish an AI task force and develop a strategic plan; (4) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing Most-Favored-Nation pricing for pharmaceutical products; (5) imposing tariffs of imported pharmaceutical products; and (6) directing certain federal agencies to enforce existing law regarding hospital and price plan transparency and by standardizing prices across hospitals and health plans. Additionally, Congress may introduce and ultimately pass healthcare-related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA. We expect additional health reform measures may be implemented in the future, particularly given the recent change in administration. We expect that healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and additional downward pressure on the price that we receive for a medical device. The ‎ultimate content, timing, or effect of any healthcare reform legislation and the impact of potential legislation on us is ‎uncertain and difficult, if not impossible, to predict. Reductions in Medicare and Medicaid reimbursement rates, as well as decreased government spending, for certain drugs and medical devices, may adversely affect demand for our products and services. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. Any such reductions or spending limitations, whether through legislative action, regulatory change, budgetary pressure, or otherwise, could expand over time and materially impact the utilization of our technologies and our overall financial performance. There can be no assurance that future initiatives on reimbursement or coverage policies will not be modified in ways that negatively affect our business, financial ‎condition, results of operations, and/or prospects. We could lose our market advantage earlier than expected. We believe that our products represent a significant improvement over any existing drug delivery injection system in use today. However, this competitive advantage can evaporate quickly if we are not able to commercialize our products quickly. In the medical device industry, most of an innovative product’s commercial value is realized during the early stages of commercialization, before competing products are developed. Our market advantage is based, in part, on patent rights and the need for new competing products and systems to obtain regulatory approval before they can be commercialized. The scope of our patent rights may be limited and may also depend on the availability of meaningful legal remedies. 13 Our failure to adequately protect our intellectual property rights, through patents or otherwise, or limitations on the use or loss of such rights, could have a material adverse effect on our ability to prevent the commercialization of competing anesthetic delivery systems. In some countries, basic patent protections for our products may not exist because certain countries did not historically offer the right to obtain specific types of patents and/or we (or our licensors) did not file in those markets. In addition, the patent environment can be unpredictable, and the validity and enforceability of patents cannot be predicted with certainty. Risks Related to Employee Matters We may not be able to attract and retain qualified employees. Our future success depends upon the services of our executive officers. The Company has recently appointed Eric Hines as President and Chief Executive Officer, and as a director of the Company, replacing Arjan Haverhals, who retired at the end of 2024, and appointed Jason Papes as Senior Vice President, Global Head of Sales and Marketing. We also rely on other key management and technical personnel, and on our ability to continue to identify, attract, retain, and motivate them. Implementing our business strategy requires specialized territory managers and other talent, as our revenues are highly dependent on technological and product innovations. The market for employees in our industry is extremely competitive; several such competitors are significantly larger than us and can offer compensation more than what we are able to offer. If we are unable to retain our new chief executive officer and other key officers and attract other qualified employees, as needed, our business may be harmed. Risk Related to Our Dependence on Third Parties Relying exclusively on third parties to manufacture our products, changes in our informal manufacturing arrangements made by the manufacturer of our products, disruptions at the manufacturing facility of our manufacturers, and failure to maintain existing supply relationships expose us to risks that may harm our business. We have limited internal experience in manufacturing operations and have not historically established our own manufacturing facilities. We currently lack the internal resources to manufacture any of our products, including our CompuFlo® Epidural Computer Controlled Anesthesia System. We have been supplied by the manufacturer of the Wand/STA System and its predecessor, the CompuDent System, since the commencement of production in 1998, and by the manufacturer of its handpieces since 2003. The manufacturer of our handpieces is in the People’s Republic of China, and the manufacturer of the Wand/STA System is in the United States. At present, we have an informal arrangement with the manufacturers of our products. Our current arrangement with our manufacturers is on a purchase order-by-purchase order basis. As a result, we do not have price protection or a supply commitment for our devices or handpieces. If either manufacturer insists on a material change in terms or determines to discontinue manufacture of our products, it could have an adverse effect on our financial condition and results of operation. An operational disruption in the facility of the manufacturer of, or their ability to ship, our handpieces or devices could negatively impact our financial results. The occurrence of a natural disaster, such as a hurricane, tropical storm, earthquake, tornado, severe weather, flood, fire, or epidemic, pandemic, or other health emergency, or other unanticipated problems such as labor difficulties, equipment failure or unscheduled maintenance, in each case could cause operational disruptions of varied duration. These types of disruptions could materially adversely affect our financial condition and results of operations to varying degrees dependent upon the facility, the duration of the disruption, our ability to shift business to another facility or find alternative sources of supply. Any losses due to these events may not be covered by our existing insurance policies or may be subject to certain deductibles. Given our current manufacturing relationships, it is possible that our manufacturing requirements may exceed the available supply allotments under our existing agreements. Our anticipated future reliance on third-party manufacturers exposes us to the following additional risks: ● We may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited, and the FDA must approve any replacement contractor. This approval would require new testing and compliance inspections. In addition, a new manufacturer would have to develop substantially equivalent processes for production of our products. ● Contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to successfully produce, store, and distribute our products. ● Contract manufacturers are subject to ongoing periodic unannounced inspections by the FDA and corresponding state agencies to ensure strict compliance with current good manufacturing practice and other government regulations and corresponding foreign standards. We do not have control over third-party manufacturers’ compliance with these regulations and standards, and our manufacturers may be found to be in noncompliance with certain regulations, which may impact their ability to manufacture our products. 14 ● If any third-party manufacturer makes improvements in the manufacturing process for our products, we may not own or may have to share the intellectual property rights to the innovation. We may be required to pay fees or other costs for access to such improvements. ● Though alternate sources of supply for dental handpieces exist, we would need to establish relationships with new suppliers, and with respect to the Wand/STA System, recover its existing tools or have new tools produced and “burned in” and other manufacturing and quality control software re-produced. Establishing new manufacturing relationships could involve significant expense and delay. Each of these risks could delay the commercialization of our CompuFlo Epidural Computer Controlled Anesthesia System, limit our available supply of The Wand/ STA for dental applications, cause damage to our reputation, result in higher costs and/or deprive us of potential product revenues. Any curtailment or interruption of the supply, whether because of termination of the relationship or otherwise, would have a material adverse effect on our financial condition, business, and results of operations. Our business is exposed to risks associated with the economic, environmental, and political conditions in China because the sole manufacturer of our handpieces is in China. Because the sole manufacturer of our dental handpieces is in China, our business is disproportionately exposed to the economic, environmental, and political conditions of the region. China’s political and economic systems are very different from most developed countries in many respects, including the amount of government involvement, the level of development, the control of foreign exchange, and the allocation of resources. The increase in United States tariffs on products from China have impacted and will continue to impact the price of our goods sold. Uncertainties have arisen and may arise in the future with changing governmental policies and measures. China also faces many social, economic, and political challenges that may produce instabilities in both its domestic arena and in its relationship with other countries. These instabilities may significantly and adversely affect our supply of dental handpieces and our ability to deliver reasonably priced products, which would in turn adversely affect our financial performance. In addition, as the Chinese legal system develops, there can be no assurance that changes in laws and regulations and their interpretation or their enforcement will not have a material adverse effect on our business relationship with the sole manufacturer of our dental handpieces. Any adverse change in the economic, environmental, and political conditions in China could have a material adverse effect on economic growth and the level of investments and availability of capital in China, which in turn could lead to a reduction in the supply of our dental handpieces and consequently have a material adverse effect on our businesses. Issues with product quality could have a material adverse effect upon our business, subject us to regulatory actions and cause a loss of customer confidence in us or our products. In general, our success depends upon the quality of our products. Quality management plays an essential role in meeting customer requirements, preventing defects, improving our products and services, and assuring the safety and efficacy of our products. Our future success depends on our ability to maintain and continuously improve our quality management program. A quality or safety issue may result in adverse inspection reports, warning letters, product recalls or seizures, monetary sanctions, injunctions to halt manufacture and distribution of products, civil or criminal sanctions, costly litigation, refusal of a government to grant approvals and licenses, restrictions on operations or withdrawal of existing approvals and licenses. An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, a loss of customer confidence in us or our current or future products, which may result in the loss of sales and difficulty in successfully launching new products. The use of third parties to manufacture our products may increase the risk that we will not have enough of our products or such quantities at acceptable levels of cost and quality, which could impair our commercialization efforts. The Company relies on several third parties to supply and manufacture the components and raw materials for its products, and it does not have long-term supply agreements with suppliers of these component parts and raw materials, and its arrangements with these suppliers are on a purchase-order basis. These products we obtain from suppliers are subject to fluctuations in price and availability attributable to several factors, including general economic conditions, commodity price fluctuations, the demand by other companies for the same raw materials, and the availability of complementary and substitute materials. While we work with suppliers to ensure continuity of supply, no assurance can be given that these efforts will be successful. In the event that any of its existing supply arrangements are terminated or there is a reduction or interruption of supply under these existing arrangements, We expect that we will be able to enter into new arrangements with alternative suppliers, but these new arrangements may be on terms that are less favorable, including with respect to price and volume, and it may be costly or cause delays in our manufacturing process to transition to a new supplier, particularly in cases in which we must comply with regulatory requirements relating to qualification of new suppliers. The termination, reduction or interruption in supply of these raw materials and components could adversely impact our ability to manufacture and sell certain of its products. 15 Third-party suppliers may encounter problems during manufacturing for a variety of reasons, including failure to follow specific protocols and procedures, failure to comply with applicable regulations, equipment malfunction, component part supply constraints, and environmental factors, any of which could delay or impede their ability to supply the components and raw materials for our products. Any such failure to perform or a reduction or interruption in supply could have a material adverse effect on our business and operations. Risks Related to Regulatory Compliance and Other Legal Matters We are subject to substantial domestic and international government regulation, including regulatory quality standards applicable to our manufacturing and quality processes. Failure by us to comply with these standards could have an adverse effect on our business, financial condition, or results of operations. In a significant regulatory shift, the U.S. Food and Drug Administration (“ FDA ”) has adopted a new regulatory framework for the domestic medical device industry, replacing the longstanding Quality System Regulation (“ QSR ”) under 21 C.F.R. Part 820 and aligning U.S. medical device quality requirements more closely with ISO 13485 and the quality management system standards used by regulatory authorities in other jurisdictions. This new framework, finalized as the Quality Management System Regulation (“QMSR”), became effective on February 2, 2026. For companies operating in international markets, including the Company, whose international operations already comply with ISO 13485, adoption of the FDA’s QMSR is expected over time to reduce duplication in audits and documentation. The Company has evaluated its quality management system against the requirements of ISO 13485 and the QMSR, and the results of this evaluation have informed updates to standard operating procedures, the quality manual, and related compliance documentation. The Company has substantially implemented the additional controls and process enhancements identified through this evaluation, continues to complete remaining actions to support compliance with the QMSR by its effective date, and is compliant. If we or our third party manufacturers are unable to comply with the QMSR, once effective, or with any other applicable FDA requirements or if we or a third party manufacturer later discovers previously unknown problems with our products or manufacturing processes, these could result in, among other things: warning letters or untitled letters; fines, injunctions or civil penalties; suspension or withdrawal of approvals; seizures or recalls of our products; total or partial suspension of production or distribution; administrative or judicially imposed sanctions; the FDA’s refusal to grant pending or future clearances or approvals for our products; clinical holds; refusal to permit the import or export of our products; and criminal prosecution of us, our suppliers, or our employees. Any of these actions could significantly and negatively affect supply of our products. If any of these events occur, our reputation could be harmed, we could be exposed to product liability claims and we could lose customers and experience reduced sales and increased costs. Under the transitional provisions, of the European Union’s Medical Device Regulation (“MDR”), To continue commercial sales in the European Union beyond the transition period, the Company’s Class IIa and Class IIb devices must obtain certification under the MDR by December 31, 2028. The Company continues to manage its MDR transition activities in coordination with notified bodies; however, failure to successfully obtain MDR certification within the applicable timeframe could adversely affect the Company’s ability to market and sell its products in the European Union. The Company’s products, including the Wand® STA System, dental handpieces used with the Wand® and Wand® STA Systems, which are classified as Class IIa medical devices, and the CompuFlo® Epidural System, which is classified as a Class IIb medical device, will have MDR certification in 2027. 16 We may be subject, directly or indirectly, to U.S. federal and state healthcare fraud and abuse and false claims laws and regulations. Prosecutions under such laws have increased in recent years and we may become subject to such litigation. If we are unable to comply or have not fully complied with such laws, we could face substantial penalties. Our operations are and will continue to be directly, or indirectly through our distributors, customers, and healthcare professionals, subject to various U.S. federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, federal False Claims Act, and the Foreign Corrupt Practices Act of 1977. These laws may impact, among other things, our proposed sales, and marketing and education programs. The federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made under a federal healthcare program such as Medicare or Medicaid. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated. The Anti-Kickback Statute is broad and, despite a series of narrow safe harbors, prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry. Penalties for violations of the federal Anti-Kickback Statute include criminal penalties and civil and administrative sanctions such as fines, imprisonment, and possible exclusion from Medicare, Medicaid, and other federal healthcare programs. An alleged violation of the Anti-Kickback Statute may be used as a predicate offense to establish liability pursuant to other federal laws and regulations, such as the federal False Claims Act. Many states have also adopted laws like the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare items or services reimbursed by any source, not only the Medicare and Medicaid programs. The federal False Claims Act prohibits persons from knowingly filing, or causing to be filed, a false claim to, or the knowing use of false statements to obtain payment from, the federal government. Suits filed under the False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of the government, and such individuals, commonly known as “relators” or “whistleblowers,” may share in any amounts paid by the entity to the government in fines or settlement. The frequency of filing qui tam actions has increased significantly in recent years, causing greater numbers of medical device, pharmaceutical, and healthcare companies to have to defend False Claim Act actions. The Affordable Care Act includes provisions expanding the ability of certain relators to bring actions that would have been previously dismissed under prior law. When an entity is determined to have violated the federal False Claims Act, it may be required to pay up to three times the actual damages sustained by the government, plus civil penalties for each separate false claim. The Deficit Reduction Act of 2005 encouraged states to enact or modify their state False Claims Act to be at least as effective as the federal False Claims Act by granting states a portion of any federal Medicaid funds recovered through Medicaid-related actions. Most states have enacted state false claims laws, and many of those states include laws with qui tam provisions. The Affordable Care Act includes provisions known as the Physician Payments Sunshine Act (section 6002), which require manufacturers of drugs, biologics, devices, and medical supplies covered under Medicare and Medicaid to disclose to the Centers for Medicare and Medicaid Services any transfers of value to physicians and teaching hospitals. Manufacturers must also disclose investment interests held by physicians and their family members. Failure to submit the required information may result in civil monetary penalties of up to $1 million per year for knowing violations and may result in liability under other federal laws or regulations. Similar reporting requirements have also been enacted on the state level in the United States, and an increasing number of countries worldwide either have adopted or are considering similar laws requiring transparency of interactions with healthcare professionals. In addition, some states, such as Massachusetts and Vermont, impose an outright ban on certain gifts to physicians. These laws could affect our promotional activities by limiting the kinds of interactions we could have with hospitals, physicians or other potential purchasers or users of our products. Both the disclosure laws and gift bans will impose administrative, cost and compliance burdens on us. If we are found to be in violation of any of the laws described above and other applicable state and federal fraud and abuse laws, we may be subject to penalties, including civil and criminal penalties, damages, fines, or an administrative action of suspension or exclusion from government healthcare reimbursement programs and the curtailment or restructuring of our operations. In addition, we are subject to the Foreign Corrupt Practices Act (“ FCPA ”) and other countries’ anti-corruption/anti-bribery regimes, such as the U.K. Bribery Act. The FCPA prohibits improper payments or offers of payments to foreign governments and their officials for obtaining or retaining business. Safeguards we implement to discourage improper payments or offers of payments by our employees, consultants, sales agents, or distributors may be ineffective, and violations of the FCPA and similar laws may result in severe criminal or civil sanctions, or other liabilities or proceedings against us, any of which would likely harm our reputation, business, results of operations, and financial condition. Safeguards we implement to discourage improper payments or offers of payments by our employees, consultants, sales agents, or distributors may be ineffective, and violations of the FCPA and similar laws may result in severe criminal or civil sanctions, or other liabilities or proceedings against us, any of which would likely harm our reputation, business, results of operations, and financial condition. Certain modifications to the Company ’ s products may require new 510(k) clearances or other marketing authorizations and may require the Company to recall or cease marketing its products. Once a medical device is permitted to be legally marketed in the United States pursuant to a 510(k) clearance, a manufacturer may be required to notify the FDA of certain modifications to the device. 17 Manufacturers determine in the first instance whether a change to a product requires a new 510(k) clearance or premarket submission, but the FDA may review any manufacturer’s decision. The FDA may not agree with the Company’s decisions regarding whether new clearances are necessary. The Company has made modifications to its products in the past and has determined, based on its review of the applicable FDA regulations and guidance, that in certain instances, new 510(k) clearances or other premarket submissions were not required. The Company may make similar modifications or add additional features in the future that it believes do not require a new 510(k) clearance. If the FDA disagrees with the Company’s determinations and requires it to submit new 510(k) notifications, the Company may be required to cease marketing or to recall the modified product until it obtains clearance, and it may be subject to significant regulatory fines or penalties. Changes to United States federal and state regulatory agencies may cause disruptions and delays in the approval processes and regulations relating to our products. The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, the ability to hire and retain key personnel, the ability to accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the FDA have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA and other agencies may also extend the time necessary for new drug development and for those new drugs to be reviewed or approved by the necessary government agencies, which would adversely affect our business, financial condition, results of operations, and prospects. For example, over the last several years, the U.S. government has shut down several times, and certain regulatory agencies, such as the FDA, have had to furlough critical employees and stop critical activities. If a prolonged government shutdown occurs or there are other changes that limit the FDA’s ability to perform its necessary activities in a timely manner, it could significantly reduce the ability of the FDA to review and process our regulatory submissions, which could have a material adverse effect on our business. It is possible that the Trump administration could institute significant changes to certain regulatory agencies and task the “Department of Government Efficiency,” or “ DOGE ,” or any successor or similar initiative or agency, with making further changes to eliminate regulations, cut expenditures, and restructure federal agencies, some of which could impact public companies. For example, the current administration has discussed several changes to the reach and oversight of the Food and Drug Administration, which could affect its relationship with the pharmaceutical industry, transparency in decision making and ultimately the cost and availability of prescription drugs, as well as oversight over clinical trials and pharmaceutical development, all of which could pose risks (or opportunities) for companies in related industries. Similarly, there have been discussions of “reigning in” regulatory agencies such as the Federal Trade Commission, the Federal Communications Commission and the Federal Energy Regulatory Commission, all of which could impact how companies do business and could pose risks related to business operations and financial outlook. The Company may be subject to enforcement actions if it engages in improper marketing or promotion of its products. The Company’s promotional materials and training methods must comply with applicable laws, regulations, and regulatory authorities’ rules and guidelines, including the FDA and the Federal Trade Commission (the “ FTC ”). If the FDA, the FTC or another regulatory agency determines that The Company’s promotional or training material constitutes off-label, false or misleading, unfair or deceptive promotion of its products, it could request that the Company modify its training or promotional materials or subject it to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine or criminal penalties. It is also possible that other federal, state or foreign enforcement authorities might act if they consider the Company’s promotional or training materials to constitute off-label, false or misleading, unfair or deceptive promotion of its products, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement, and reputational harm. Changes in laws and regulations over which we have no control can significantly affect our business and results of operations. Any governmental entity that regulates our operations in the country in which they are located may enact new legislation or adopt new laws and regulations or policies at any time, and new judicial decisions may change the interpretation of existing legislation or regulations at any time in any of the countries in which our operations or projects are located. We have no control over any such changes. Any new laws or regulations governing our operations could have an adverse impact on our business, results of operations, and prospects. Changes to trade policy, including tariff and import/export regulations, may have a material adverse effect on our results of operations, cash flows, and financial condition. Changes to U.S. trade policy, including tariffs and import/export regulations, may adversely affect our operations, cash flows, and financial condition. 18 Recent and potential changes in U.S. trade policy—including higher tariffs, revisions or terminations of trade agreements, new economic sanctions, and other restrictions on international commerce—could materially impact our business. Adjusting our operations to comply with such changes may be time-consuming and costly. Retaliatory measures by other countries, including China, have already increased supply-chain costs and reduced product availability, effects that we may not be able to offset. These dynamics could weaken the U.S. economy, dampen industry demand, and negatively affect global markets in which we operate. in addition, political tensions between the United States and China further heighten these risks. Deteriorating relations could reduce trade, investment, and related economic activity, and materially affect our business, prospects and financial results. Regulatory uncertainty may increase following recent federal developments. Turnover and new policies at the U.S. Department of Health and Human Services, including the FDA, may continue to shift regulatory priorities and enforcement approaches. In addition, the U.S. Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo , which overturned the Chevron Doctrine, reduced deference to federal agency interpretations of statutory authority. This decision and related rulings may create new avenues to challenge federal regulations, introducing uncertainty for businesses like ours that have historically relied on a stable regulatory framework. Federal actions related to tariffs and research funding may disrupt our business. New and proposed U.S. tariffs, along with directives to reevaluate federal trade policies, have led to significant uncertainty regarding future trade relationships, treaties, and tariff structures. These developments may restrict access to suppliers, reduce global demand, and could adversely affect our operations, particularly given our reliance on components sourced from China and our significant international sales. Additionally, changes to federal research funding—including reductions or restructuring of grants, particularly those involving higher-education institutions—may negatively impact our business and that of our research partners. Tariffs have already increased our cost of doing business and may continue to constrain access to imported equipment essential to our operations. International conflict has affected commerce worldwide and may have a material adverse effect on our results of operations, cash flows, and financial condition. The Ukraine/Russia conflict and various Middle East conflicts have received significant media coverage. Geopolitical instability can lead to significant disruption in supply chain efficiency, adding cost and delays. Russia-related sanctions instituted by the Office of Foreign Assets Control (“ OFAC ”) are likely to have unpredictable and wide-ranging effects on the domestic and global economy and financial markets, which could have an adverse effect on our business and results of operations. As a direct impact of the conflict, we have experienced a decrease in international sales to Ukraine and halted all sales to Russia. We will continue to monitor the situation carefully and, if necessary, take action to protect our business, operations, and financial condition. Geopolitical instability, labor unrest, and economic disruptions in certain foreign jurisdictions may indirectly affect our operations. Although we do not have direct sales, operations, or customers in regions experiencing significant instability, such as Venezuela, recent labor strikes, political instability, and economic conditions in Venezuela may contribute to broader regional or global disruptions, including impacts on international trade relationships, energy markets, currency volatility, or global logistics networks. In addition, changes in diplomatic relationships, foreign policy positions, or international regulatory frameworks involving countries experiencing political or economic instability could result in new or expanded trade restrictions, sanctions, compliance obligations, or logistical challenges imposed by foreign governments, as well as the United States. Such developments could indirectly affect the availability or cost of certain inputs, transportation services, or third-party suppliers upon which we rely. While we believe our current supply chain and manufacturing operations are diversified and resilient, we cannot assure investors that future geopolitical developments will not result in increased costs, delays, or other adverse effects on our business, financial condition, or results of operations. Risks Related Company’s Securities The Company is effectively controlled by a limited number of stockholders. Our principal stockholder, BP4, Srl, an Italian investment vehicle that is currently in liquidation (“BP4”), controls approximately 11.05% of the Company’s issued and outstanding shares of common stock. As a result, it can exercise substantial control over our affairs and corporate actions requiring stockholder approval, including electing directors, selling all or substantially all our assets, merging with another entity, or amending our certificate of incorporation. This control could delay, deter, or prevent a change in control and could adversely affect the price that investors might be willing to pay in the future for the Company’s securities. Because of the concentration of ownership of our shares of common stock, our stockholders may from time to time observe instances where there may be less liquidity in the public markets for our securities. We expect we will need additional financing to execute our business plan and fund operations, and additional financing may not be available on reasonable terms or at all. As of December 31, 2025, we had total assets of approximately $7,800,000 and working capital of approximately $3,300,000 and $1,100,000 of cash and cash equivalents. We believe we will need additional capital to fund our operations. We intend to seek additional funds through various financing sources, including additional sales of our equity securities and possibly warrants to purchase our equity securities. However, there can be no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations, in which case you may lose your entire investment. 19 If we fail to regain compliance with the strict listing requirements of NYSE American, we may be subject to delisting. As a result, our stock price may decline, and our common stock may be de-listed. If our stock were no longer listed on NYSE American, the liquidity of our securities likely would be impaired. Our common stock currently trades on the NYSE American under the symbol “MLSS”. On October 8, 2025, the Company received a letter from NYSE American stating that the Company is not in compliance with the continued listing standards as outlined in Section(s) 1003(a)(ii), and (iii) of the NYSE American Company Guide (the “ Company Guide ”). Section 1003(a)(ii) requires a listed company to have stockholders’ equity of $4 million or more if it has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years, and Section 1003(a)(iii) requires stockholders’ equity of $6 million or more if it has reported losses from continuing operations and/or net losses in its five most recent fiscal years. Based on the Company’s Form 10-Q for the period ended June 30, 2025, the Company reported stockholders’ equity of approximately $3.3 million and experienced losses in such period and each of its five prior fiscal years. As a result, the Company is not currently in compliance with Sections 1003(a)(ii) and (iii) and is not eligible for any exemption under Section 1003(a) of the Company Guide. To maintain its listing, the Company submitted a plan of compliance outlining the actions it has taken or will take to regain compliance. The Company will be able to continue its listing but will be subject to periodic reviews by the NYSE American. If the Company fails to comply with the continued listing standards by April 8, 2027, or if the Company does not make progress consistent with the plan, the NYSE American will initiate delisting procedures as appropriate. The Company’s management is pursuing options to address the deficiency. If we fail to regain compliance with and adhere to NYSE American’s strict listing criteria, including with respect to stock price, our market capitalization and stockholders’ equity, our stock may be de-listed. This would impair the liquidity of our securities not only in the number of shares that could be bought and sold at a given price, which may be depressed by the relative illiquidity, but also through delays in the timing of transactions and the potential reduction in media coverage. As a result, an investor might find it more difficult to dispose of our common stock if we are de-listed. Any failure at any time to meet the continuing NYSE American listing requirements would have an adverse impact on the value of and trading activity in our common stock. We have relied heavily on sales of our common stock to fund our operations, and our ability to obtain additional capital through stock sales or other securities offerings may be more costly or dilutive to our stockholders than in the past, or may not be available to us at all. Our ability to raise additional capital may be limited by a low trading volume, stock price and market capitalization, as well as by laws, regulations and market conditions. We have historically relied on, and may continue to rely, the sale of shares of our common stock to fund our operations and support our business activities. Our ability to raise additional capital through sales of our common stock or other securities offerings will depend on several factors, many of which may not be in our favor, including the trading volume and volatile trading price of our common stock, our relatively low public float and market capitalization, our potential inability maintain compliance with the listing requirements of the NYSE American, unfavorable financial market conditions, and the other risks and uncertainties. If we are unable to raise additional capital through the offering and sale of shares of our common stock, or securities convertible into or exercisable for our common stock, on a timely basis or on acceptable terms, or at all, we may seek additional capital through other third-party sources that require us to relinquish valuable rights in our intellectual property, technologies, product candidates or future revenue streams, or that subject us to restrictive covenants, operational restrictions or security interests in our assets, or we may need to delay, scale back or eliminate some or all of our development programs, reduce other expenses, file for bankruptcy, reorganize, merge with another entity, or cease operations. Using a shelf registration statement to conduct an equity offering to raise capital generally takes less time and is less expensive than other means, such as conducting an offering under a Form S-1 registration statement. Our ability to raise capital under a shelf registration statement is, and may continue to be, limited by, among other things, current and future SEC rules and regulations impacting on the eligibility of smaller companies to use Form S-3 for primary offerings of securities. For example, if we filed a new shelf registration statement, we would currently be subject to the “baby shelf rule.” This means that we could use a shelf registration statement to raise additional funds only to the extent that the aggregate market value of securities sold by us or on our behalf pursuant to Instruction I.B.6. of Form S-3 during the 12 calendar months immediately prior to, and including, the intended sale does not exceed one-third of the aggregate market value of our public float, calculated in accordance with the instructions to Form S-3. Based on the aggregate market value of our public float, we would currently be unable to raise significant capital under a shelf registration. If our ability to offer securities under a shelf registration statement is limited, including by the baby shelf rule, we could choose to conduct an offering of our securities under an exemption from registration under the Securities Act or under a Form S-1 registration statement. We would expect either of these alternatives to take more time and be a more expensive method of raising additional capital relative to using our shelf registration statement. In addition, under SEC rules and regulations, our common stock must be listed and registered on a national securities exchange in order to use a Form S-3 registration statement (1) for a primary offering, if our public float is not at least $75 million as of a date within 60 days prior to the date of filing the Form S-3 or a re-evaluation date, whichever is later, 20 There can be no assurance that we can maintain the listing of our common stock on the NYSE American. See, “ If we fail to regain compliance with the strict listing requirements of NYSE American, we may be subject to delisting. As a result, our stock price may decline, and our common stock may be de-listed. If our stock were no longer listed on NYSE American, the liquidity of our securities likely would be impaired ,” above. Our ability to raise capital on a timely basis through the issuance and sale of equity securities may also be limited by NYSE American’s stockholder approval requirement for certain issuances, including certain transactions that are not deemed a public offering (as defined in the Company Guide). For transactions other than public offerings, the Company Guide requires stockholder approval prior to the issuance or potential issuance of common stock (or securities convertible into or exercisable for common stock) at a price per share that is less than the “Minimum Price” if the issuance (together with sales by our officers, directors and principal shareholders (as defined in Company Guide)) would equal 20% or more of our common stock outstanding before the issuance. Under the Company Guide, the “Minimum Price” means a price that is the lower of (i) the Official Closing Price immediately preceding the signing of the binding agreement; or (ii) the average Official Closing Price for the five trading days immediately preceding the signing of the binding agreement. For purposes of calculating the Minimum Price, the “Official Closing Price” of the issuer’s common stock means the official closing price on the NYSE American as reported to the consolidated tape immediately preceding the signing of a binding agreement to issue the securities. In addition, certain prior sales of securities by us may be aggregated with any offering we may propose at a price that is less than the Minimum Price and which is not considered a public offering by the Company Guide, further limiting the amount we could raise in the offering. Under the Company Guide, stockholder approval is also required prior to the issuance of securities when the issuance or potential issuance will result in a change of control of our company. Even if a public offering under the Company Guide is not subject to the limitations described above, it may involve publicly announcing the proposed transaction, which often has the effect of depressing the market price of a company’s stock and could result in a reduced offering price. Accordingly, our existing investors may suffer greater dilution if we seek to raise additional capital through such a public offering of our securities. Obtaining stockholder approval is a costly and time-consuming process. If we must obtain stockholder approval for a potential transaction, we would expect to spend substantial additional money and resources. In addition, seeking stockholder approval would delay our receipt of otherwise available capital, which may materially and adversely affect our ability to execute our business plan, and there is no guarantee our stockholders ultimately would approve a proposed transaction. Failure to implement effective internal controls required by the Sarbanes-Oxley Act of 2002 could result in material misstatements in our financial statements, cause investors to lose confidence in the Company ’ s reported financial information and have a negative effect on the trading price of our common stock. Section 404 of the Sarbanes-Oxley Act of 2002 requires the management of public companies to develop and implement internal controls over financial reporting and evaluate the effectiveness thereof. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual and interim financial statements will not be prevented or detected on a timely basis. Any failure to complete the Company’s assessment of its internal controls over financial reporting or to remediate any material weaknesses that management may identify could harm the Company’s operating results, cause the Company to fail to meet its reporting obligations or result in material misstatements in the Company’s financial statements. Inadequate disclosure controls and procedures and internal controls over financial reporting could also cause investors to lose confidence in the Company’s public disclosures and reported financial information, which could have a negative effect on the trading price of our common stock. The market price of our common stock may be volatile and may fluctuate significantly, and stockholders could lose all or part of their investment in the Company. The market price for our common stock varied between a high of $1.39 and a low of $0.23 during the twelve months ended December 31, 2025. Our stock price is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors, including those listed in this “Risk Factors” section and other, unknown factors. Our stock price may experience substantial volatility because of many factors, including: ● our failure to meet analysts’ expectations; ● sales or potential sales of substantial amounts of our common stock; ● delay or failure in initiating our strategy to commercialize our CompuFlo Epidural System; ● the success of our strategy to commercialize our CompuFlo Epidural System; ● announcements about us or about our competitors, including clinical trial results, regulatory approvals or new product introductions that could adversely impact the market acceptance or competitive advantages of our CompuFlo Epidural System; ● developments concerning our licensors or product manufacturers; 21 ● litigation and other developments relating to our patents or other proprietary rights or those of our competitors; ● our ability to successfully develop and commercialize products and services for the healthcare industry; ● conditions in the medical device industry; ● variations in our anticipated or actual operating results; and ● change in securities analysts’ estimates of our performance, or our failure to meet analysts’ expectations. Many of these factors are beyond our control. The stock markets in general, and the market for small, medical device companies have historically experienced extreme price and volume fluctuations. These fluctuations often have been unrelated or disproportionate to the operating performance of these companies. These broad market and industry factors could reduce the market price of our common stock, regardless of our actual operating performance. We have never paid and do not intend to pay cash dividends in the foreseeable future. As a result, capital appreciation, if any, will be your sole source of gain. We have never paid cash dividends on any of our capital stock, and we currently intend to retain future earnings, if any, to fund the development and growth of our business. In addition, the terms of existing and future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future. We cannot assure stockholders that our stock price will appreciate or that they will receive a positive return on their investment if and when they sell their shares. Provisions in our certificate of incorporation, our by-laws and Delaware law might discourage, delay, or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our common stock. Provisions of our certificate of incorporation, our by-laws and Delaware law may have the effect of deterring unsolicited takeovers or delaying or preventing a change in control of our company or changes in our management, including transactions in which our stockholders might otherwise receive a premium for their shares over then current market prices. In addition, these provisions may limit the ability of stockholders to approve transactions that they may deem to be in their best interests. These provisions include: ● the inability of stockholders to call special meetings; ● the ability of our Board of Directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could include the right to approve an acquisition or other change in our control or could be used to institute a rights plan, also known as a poison pill, that would work to dilute the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our Board of Directors; and ● limitations on filling of vacancies. All of which could make it more difficult for a third party to acquire, or discourage a third party from seeking to acquire, control of our company. In addition, Section 203 of the Delaware General Corporation Law prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years, has owned 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. The existence of the forgoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our Company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition. 22 Your percentage of ownership in the Company may be diluted in the future. In the future, your percentage ownership in the Company may be diluted because of equity issuances for acquisitions, capital market transactions or otherwise, including any equity awards that the Company will grant to its directors, officers, employees and consultants. Such awards will have a dilutive effect on outstanding share count which could adversely affect the market price of the Company’s common stock. Risks Related to Our Intellectual Property If we are unable to adequately protect our patents, trade secrets and other proprietary rights, if our patents are challenged or if our provisional patent applications do not get approved, our competitiveness and business prospects may be materially damaged. Intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names, and trade addresse, are important to our business. We will endeavor to protect our intellectual property rights in key jurisdictions in which our products are produced or used and in jurisdictions into which our products are imported. Our success will depend to a significant degree upon our ability to protect and preserve our intellectual property rights. However, we may be unable to obtain or maintain protection for our intellectual property in key jurisdictions. Although we own and have applied for patents and trademarks throughout the world, we may have to rely on judicial enforcement of our patents and other proprietary rights. Our patents and other intellectual property rights may be challenged, invalidated, circumvented, and rendered unenforceable or otherwise compromised. A failure to protect, defend, or enforce our intellectual property could have an adverse effect on our financial condition and results of operations. Similarly, third parties may assert claims against us and our customers and distributors, alleging our products infringe upon third-party intellectual property rights. We believe that the intellectual property underlying our products is a competitive advantage. We rely on a combination of patent rights, trade secrets, and nondisclosure and non-competition agreements to protect our proprietary intellectual property, and we will continue to do so. There can be no assurance that our patents, trade secret policies and practices, or other agreements will adequately protect our intellectual property. Our issued patents may be challenged, found to be over-broad or otherwise invalidated in subsequent proceedings before courts or the U.S. Patent and Trademark Office. Even if enforceable, we cannot provide any assurances that they will provide significant protection from competition. The processes, systems, and/or security measures we use to preserve the integrity and confidentiality of our data and trade secrets may be breached, and we may not have adequate remedies resulting from such breaches. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. There can be no assurance that the confidentiality, nondisclosure and non-competition agreements with employees, consultants and other parties with access to our proprietary information to protect our trade secrets, proprietary technology, processes and other proprietary rights, or any other security measures relating to such trade secrets, proprietary technology, processes and proprietary rights, will be adequate, will not be breached, that we will have adequate remedies for any breach, that others will not independently develop substantially equivalent proprietary information or that third parties will not otherwise gain access to our trade secrets or proprietary knowledge. To the extent that our consultants, contractors, or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. If we must take legal action to protect, defend or enforce our intellectual property rights, any suits or proceedings could result in significant costs and diversion of our resources and our management’s attention, and we may not prevail in any such suits or proceedings. A failure to protect, defend or enforce our intellectual property rights could have an adverse effect on the results of operations. Third parties could obtain patents that may require us to negotiate licenses to commercialize our technologies, and we cannot assure you that the required licenses would be available on reasonable terms or at all. Third parties may claim that one or more aspects of our technologies or products may infringe on their intellectual property rights. Our computer-controlled anesthesia systems are complex systems and numerous U.S. and foreign patents and pending patent applications owned by third parties exist in fields that relate to the development and commercialization of drug delivery systems. In addition, many companies have employed intellectual property litigation as a strategy to gain a competitive advantage. It is possible that infringement claims may occur as the number of products and competitors in our market increases. In addition, to the extent that we gain greater visibility and market exposure as a public company, we face a greater risk of being the subject of intellectual property infringement claims. We cannot be certain that the conduct of our business does not and will not infringe intellectual property or other proprietary rights of others in the United States and in foreign jurisdictions. If any of our computer-controlled anesthesia systems are found to infringe third party patent rights, we could be prohibited from manufacturing and commercializing the infringing technology unless we obtain a license under the applicable third-party patent and pay royalties or are able to design around such patent. 23 We may be unable to obtain a license on terms acceptable to us, or at all, and we may not be able to redesign the system to avoid infringement. Even if we can redesign our products or processes to avoid an infringement claim, our efforts to design around the patent could require significant time, effort and expense and ultimately may lead to an inferior or costlier product. Any claim of infringement by a third party, even those without merit, could cause us to incur substantial costs defending against the claim and could distract our management from our business. Furthermore, if any such claim is successful, a court could order us to pay substantial damages, including compensatory damages for any infringement, plus prejudgment interest and could, in certain circumstances, treble the compensatory damages and award attorney fees. This damage could be substantial and could harm our reputation, business, financial condition, and operating results. A court also could enter orders that temporarily, preliminary, or permanently prohibit us, our licensees, if any, and our customers from making, using, selling, offering to sell, or importing one or more of our products or using our proprietary technologies or processes, or could enter an order mandating that we undertake certain remedial activities. Any of these events could seriously harm our business, operating results, and financial condition. General Business Risks Cybersecurity incidents, data breaches, or other system disruptions could compromise our products, data, and operations and materially adversely affect our business, financial condition, and results of operations. We rely extensively on information technology (“IT”) systems, cloud-based platforms, software, and connected technologies to conduct our operations, develop and manufacture our medical devices, maintain clinical and regulatory data, and support customers and patients who use our connected products. Cyberattacks are becoming increasingly sophisticated, frequent, and difficult to detect, and threat actors — including criminal groups, nation-states, and insiders — regularly target healthcare and medical technology companies because of the value and sensitivity of the data involved. Vulnerabilities may exist in our own systems, those of our suppliers and manufacturing partners, and in third-party software embedded in our devices. Any actual or perceived vulnerability or breach in the cybersecurity of our products could result in device malfunction, unauthorized access to patient data, or interruptions in device performance. In extreme circumstances, a cybersecurity incident involving one of our connected medical devices could pose risks to patient safety. A significant cybersecurity breach or disruption could lead to operational downtime, loss or corruption of data, delays in manufacturing or product delivery, and interruptions in clinical, research, or commercial activities. In addition, such incidents could require costly remediation efforts, including forensic investigations, system restoration, and implementation of additional security measures. Compromise of protected health information, personally identifiable information, or other sensitive data could expose us to substantial liability under U.S. and international data-protection laws, including the Health Insurance Portability and Accountability Act (“HIPAA”), the General Data Protection Regulation (“GDPR”), and various state privacy regulations. We could face regulatory investigations, enforcement actions, penalties, and ongoing compliance costs. We may also experience loss of customer trust, damage to our reputation, increased insurance premiums, and litigation from patients, customers, or business partners. Although we maintain cybersecurity programs and invest in technical and administrative safeguards designed to protect our systems and devices, these measures may be insufficient to prevent or detect every potential attack or vulnerability. We also rely on third-party service providers who may have weaker security controls than our own, and our ability to monitor their security practices is limited. Despite the implementation of security measures, our internal computer systems, and those of any third parties with which we partner are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any cybersecurity or system failure, accident or breach to date, if an event were to occur, it could result in a material disruption of our operations, substantial costs to rectify or correct the failure, if possible, and potentially violation of HIPAA and other privacy laws applicable to our operations. If any disruption or security breach resulted in a loss of or damage to our data or applications or inappropriate disclosure of confidential or protected information, we could incur liability, further development of our products could be delayed, and our operations could be disrupted, any of which could severely harm our business and financial condition. Issues with product quality could have a material adverse effect upon our business, subject us to regulatory actions and cause a loss of customer confidence in us or our products. In general, our success depends upon the quality of our products. Quality management plays an essential role in meeting customer requirements, preventing defects, improving our products and services, and assuring the safety and efficacy of our products. Our future success depends on our ability to maintain and continuously improve our quality management program. A quality or safety issue may result in adverse inspection reports, warning letters, product recalls or seizures, monetary sanctions, injunctions to halt manufacture and distribution of products, civil or criminal sanctions, costly litigation, refusal of a government to grant approvals and licenses, restrictions on operations or withdrawal of existing approvals and licenses. An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, a loss of customer confidence in us or our current or future products, which may result in the loss of sales and difficulty in successfully launching new products. Insurance coverage may be inadequate or unavailable to cover any product liability losses we incur. Our business exposes us to potential product liability claims that are inherent in the design, manufacture, testing, inspection, and sale of dental and medical devices. We are subject to product liability lawsuits alleging that component failures, manufacturing flaws, manufacturing defects, negligence in manufacturing, design defects, negligence in design, or inadequate disclosure of product-related risks, warnings, or product-related information resulted in an unsafe condition, injury, or death to customers. The risk of one or more product liability claims or lawsuits may be even greater after we launch new products with new features or enter new markets where we have no prior experience selling our products and rely on newly hired staff or new independent distributors or contractors to provide new customer training and customer support. In addition, the misuse of our products or the failure of customers to adhere to operating guidelines could cause significant harm to customers, including death, which could result in product liability claims. Product liability lawsuits and claims, safety alerts or product recalls, with or without merit, regardless of any available insurance coverage, could cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management from our core business, harm our reputation and adversely affect our ability to attract and retain customers, any of which could have a material adverse effect on our business, financial condition and operating results.