MILESTONE SCIENTIFIC INC. 10-K

Item 5. Market for Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock has been listed on the NYSE American under the symbol “MLSS” since June 1, 2015. The trading prices of our common stock have historically been volatile and may continue to fluctuate significantly, as discussed in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The following table sets forth the quarterly high and low sales prices of our common stock as reported on the NYSE American for the periods indicated. 2025 High Low 2024 High Low First Quarter $ 1.39 $ 0.87 First Quarter $ 0.78 $ 0.52 Second Quarter $ 1.11 $ 0.62 Second Quarter $ 0.85 $ 0.54 Third Quarter $ 0.73 $ 0.38 Third Quarter $ 1.10 $ 0.58 Fourth Quarter $ 0.60 $ 0.23 Fourth Quarter $ 1.05 $ 0.60 The market price of our common stock may be influenced by factors discussed elsewhere in this Annual Report, including our operating results, liquidity position, capital-raising activities, product commercialization progress, regulatory developments, and general market conditions. Holders As of March 31, 2026, there were approximately 92 holders of record of our common stock. We believe there were approximately 3,507 beneficial owners of our common stock at that date. Because brokers and other nominees hold many shares, the number of beneficial owners may differ from the number of holders of record. Dividends We have never declared or paid cash dividends on our common stock. We do not currently intend to declare or pay dividends in the near future. We anticipate that any future earnings, if any, will be retained to support our operations, fund product development and commercialization efforts, and strengthen our financial position. The payment of dividends, if any, will be at the discretion of our Board of Directors and will depend on our operating results, financial condition, capital requirements, and other factors deemed relevant by the Board. Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None. Item 6. Selected Financial Data We are a “smaller reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and Regulation S-K. Accordingly, we are not required to provide the selected financial data specified in Item 301 of Regulation S-K. Management believes that the consolidated financial statements and related disclosures included elsewhere in this Annual Report provide sufficient information to understand our financial condition, results of operations, and liquidity. 26 I tem 7. Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed under “Risk Factors” in this Form 10-K. Overview Milestone Scientific, Inc. 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 its inception, the Company has focused on pioneering proprietary, computer-controlled injection technologies intended to improve the standard of care by making injections more precise, efficient, and more comfortable for patients. The Company’s proprietary Dynamic Pressure Sensing® (DPS) technology platform enables real-time pressure monitoring and controlled fluid delivery during injections. This platform serves as the foundation for the Company’s dental and medical product offerings. It supports multiple applications, including local anesthesia delivery, subcutaneous drug delivery, fluid aspiration, and epidural space identification. Milestone Scientific’s common stock has been listed on the NYSE American since June 1, 2015, and trades under the symbol “MLSS.” Business Strategy Milestone Scientific remains focused on advancing the following primary objectives: ● Establishing the DPS Dynamic Pressure Sensing technology platform as a standard-of-care for precise and comfortable drug delivery, with objective visual and audible in-tissue pressure feedback; ● Transitioning from a research-and-development-focused organization to a commercially oriented medical device company following FDA clearance of its medical products, and ● Expanding the global footprint of the Company’s CompuFlo® Epidural and CathCheck® systems through a targeted sales strategy and strategic distribution partnerships. Products and Technology Platform Dental Market Products Since its commercial introduction in early 2007, the STA Single Tooth Anesthesia (STA) System, together with its predecessor C-CLAD devices, has been used to administer more than 95 million injections globally. The system is designed to provide controlled delivery of local anesthetics and has been utilized in a broad range of dental procedures. The STA Instrument has been evaluated in multiple peer-reviewed clinical studies and published articles. Feedback from practitioners and published literature indicates that the technology has been incorporated into clinical practice in various markets worldwide. Medical Market Products As of 2025, the CompuFlo® Epidural System has received multiple regulatory clearances and reimbursement milestones in the United States. The system initially received FDA 510(k) clearance in 2017 for epidural injections in the lumbar region, with expanded clearance in 2023 for use in the thoracic region, including the cervicothoracic junction. In 2022, the American Medical Association assigned a technology-specific Category III CPT® code (0777T), effective January 1, 2023, to facilitate tracking and reimbursement submissions when the system is used in conjunction with primary epidural steroid injection procedures. In 2024, Medicare Administrative Contractors in Florida and multiple additional jurisdictions established Medicare Part B physician payment determinations for CPT code 0777T. The Company also received Notices of Allowance in the United States and Europe in 2024 related to its next-generation Dynamic Pressure Sensing® technology. 27 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, 2025 Year Ended December 31, 2024 Dental Medical Grand Total Dental Medical Grand Total Domestic-US Instruments $ 652,044 $ 18,400 $ 670,444 $ 653,990 $ 4,000 $ 657,990 Handpieces 4,105,727 150,850 4,256,577 4,489,521 57,700 4,547,221 Other 42,194 - 42,194 49,120 - 49,120 Grand Total $ 4,799,965 $ 169,250 $ 4,969,215 $ 5,192,631 $ 61,700 $ 5,254,331 International Rest of World Instruments $ 781,019 $ - $ 781,019 $ 868,169 $ 39,000 $ 907,169 Handpieces 2,867,180 14,000 2,881,180 2,423,507 3,920 2,427,427 Other 32,568 - 32,568 41,001 - 41,001 Grand Total $ 3,680,767 $ 14,000 $ 3,694,767 $ 3,332,677 $ 42,920 $ 3,375,597 International China Instruments $ 310,000 $ - $ 310,000 $ - $ - $ - Handpieces - - - - - - Other - - - - - - Grand Total $ 310,000 $ - $ 310,000 $ - $ - $ - Total Product Sales $ 8,790,732 $ 183,250 $ 8,973,982 $ 8,525,308 $ 104,620 $ 8,629,928 Current Product Platform See Item 1—description of Business. Summary of Critical Accounting Estimates The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, assumptions, and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Management considers an accounting estimate to be critical if it requires significant judgment, is inherently subjective, and if changes in the estimate could have a material impact on the Company’s financial condition or results of operations. Actual results may differ from those estimates under different assumptions or conditions. Management evaluates its estimates and assumptions on an ongoing basis using historical experience, current trends, and other information believed to be reasonable under the circumstances. Management regularly reviews revenue trends, liquidity and cash position, inventory levels, and operating forecasts. The estimates discussed below represent those that management believes are the most critical to understanding the Company’s financial condition and results of operations. For a more complete discussion of the Company’s significant accounting policies, see Note C to the consolidated financial statements. 28 Going Concern and Liquidity Management’s assessment of the Company’s ability to continue as a going concern requires significant judgment and is based on estimates regarding future revenues, operating expenses, working capital requirements, timing of cash flows, and access to additional sources of capital. The Company has incurred recurring operating losses and has an accumulated deficit. In addition, the Company’s available cash and cash equivalents are not sufficient to fund operations for at least twelve months from the issuance date of these financial statements without obtaining additional financing. Management has developed plans intended to improve liquidity and operating results, including initiatives to increase revenues, reduce professional and consulting expenses, and defer certain discretionary expenditures, including delaying research and development activities related to the next-generation Single Tooth Anesthesia System instrument. In April 2025, the Company received $800,000 in related party financing (see Note H). However, management’s plans are dependent on the Company’s ability to generate additional revenues and/or obtain additional financing, and there can be no assurance that such plans will be successful or that additional capital will be available on acceptable terms, or at all. Accordingly, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern within one year after the issuance date of these financial statements. The accompanying financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. Revenue Recognition Revenue recognition is a critical accounting estimate due to the judgment required in determining the timing of revenue recognition, identifying performance obligations, and estimating variable consideration, including returns and discounts. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of the promised goods transfers to the customer, in an amount that reflects the consideration the Company expects to receive in exchange for those goods. Revenue is derived primarily from the sale of dental and medical instruments and related single-use disposable handpieces. Instrument revenue is generally recognized upon shipment or delivery, depending on the contractual terms, while disposable handpiece revenue is recognized upon transfer of control to the customer. Management evaluates whether contracts contain multiple performance obligations and allocates consideration based on relative standalone selling prices when applicable. Judgment is required in estimating expected returns, distributor incentives, and other variable consideration, which are recorded as reductions of revenue. These estimates are based on historical experience, current market conditions, and anticipated future trends. Changes in assumptions related to these estimates could have a material impact on reported revenue. Inventories Inventory valuation is considered a critical accounting estimate due to the judgment required in assessing excess and obsolete inventory, forecasted demand, and the recoverability of inventory carrying values, particularly in light of the Company’s operating losses and liquidity considerations. Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (FIFO) method. The Company periodically reviews inventory quantities on hand relative to historical sales, projected future demand, product life cycles, technological changes, regulatory developments, and market conditions. Management records reserves for excess, slow-moving, or obsolete inventory based on its assessment of expected future sales and usage. This evaluation requires significant judgment, particularly with respect to estimating future demand for instruments and related disposable handpieces, anticipated product transitions, and distributor purchasing patterns. If actual demand is lower than forecasted, or if products become obsolete due to technological advancements, regulatory changes, or shifts in market acceptance, additional inventory write-downs may be required. Inventory write-downs are recorded as a component of cost of goods sold and establish a new cost basis for the inventory. Given the Company’s current liquidity position and operating results, adverse changes in demand forecasts or market conditions could have a material impact on inventory reserves and future operating results. 29 Results of Operations The following table sets forth the consolidated results of operations for the year ended December 31, 2025, compared to the year ended December 31, 2024. For the year-end December 31, 2025, compared to the year ended December 31, 2024 2025 2024 Operating results: Product sales, net $ 8,973,982 $ 8,629,928 Cost of products sold 2,566,405 2,195,340 Gross profit 6,407,577 6,434,588 Operating expenses: Selling, general and administrative expenses 11,576,530 12,295,330 Research and development expenses 449,469 858,767 Depreciation and amortization expense 78,195 37,448 Total operating expenses 12,104,194 13,191,545 Loss from operations (5,696,617 ) (6,756,957 ) Interest income (25,599 ) 60,265 Gain on sale of net operating losses - 1,983,095 Net loss (5,722,216 ) (4,713,597 ) Net loss attributable to noncontrolling interests - - Net loss attributable to Milestone Scientific Inc. (5,722,216 ) (4,713,597 ) Net sales for the year ended December 31, 2025, compared to the year ended December 31, 2024 2025 2024 Change Dental $ 8,790,732 $ 8,525,308 $ 265,424 Medical 183,250 104,620 78,630 Total sales, net $ 8,973,982 $ 8,629,928 $ 344,054 For the year ended December 31, 2025, total net sales were approximately $8.9 million, an increase of approximately $344,000, or 4%, compared to approximately $8.6 million in 2024. Dental sales were approximately $8.8 million, compared to $8.5 million in the prior year. The increase reflects higher international sales, including sales in China during 2025, partially offset by a decline in domestic U.S. dental sales. International dental sales increased 9% year over year, while domestic dental sales decreased 7%. Medical sales are approximately $183,000, compared to $104,000 in 2024, reflecting higher domestic medical handpiece sales. Medical sales continue to represent a small portion of total revenue. 30 Gross Profit for the years ended December 31, 2025, and 2024 was as follows: 2025 2024 Change Dental $ 6,227,119 $ 6,339,166 $ (112,047 ) Medical 180,458 95,422 85,036 Total gross profit $ 6,407,577 $ 6,434,588 $ (27,011 ) Gross margin was approximately 71% in 2025 compared to approximately 75% in 2024. The decline in gross margin percentage reflects changes in product mix and cost structure during the period. Selling, general, and administrative expenses for the years ended December 31, 2025, and 2024 were as follows: 2025 2024 Change Dental $ 3,873,178 $ 3,929,073 $ (55,895 ) Medical 1,593,538 2,128,456 (534,918 ) Corporate 6,109,814 6,237,801 (127,987 ) Total selling, general and administrative expense $ 11,576,530 $ 12,295,330 $ (718,800 ) Total selling, general and administrative expenses for the year ended December 31, 2025 were approximately $11.6 million, compared to $12.3 million in 2024, representing a decrease of approximately $718,000, or 6%. As a percentage of net sales, selling, general and administrative expenses decreased to approximately 129% of net sales in 2025, compared to approximately 142% of net sales in 2024. Total salaries decreased by approximately $653,000, or 17%, primarily reflecting lower headcount and related personnel costs during the year. Quality and regulatory expenses decreased by approximately $146,400, or 30%, primarily due to reduced regulatory consulting and compliance-related activities. Marketing expenses decreased by approximately $236,200, or 42%, primarily reflecting reduced promotional and advertising activities. Insurance costs decreased by approximately $57,900, or 10%, and other SG&A expenses decreased by approximately $90,300, or 10%, primarily due to general cost containment efforts. These decreases were partially offset by an increase in stock-based compensation included in salaries of approximately $234,400, or 17%, primarily related to equity compensation granted during the year. Professional fees and consultants increased by approximately $223,600, or 7%, primarily due to higher legal, accounting, and consulting expenses. Warehouse expenses increased by approximately $18,400, or 4%, reflecting higher distribution and logistics costs. Rent increased modestly by approximately $4,500, or 3%, while royalties increased slightly by approximately $3,000, or 1%. Research and Development for the years ended December 31, 2025, and 2024 were as follows: 2025 2024 Change Dental $ 430,676 $ 835,851 $ (405,175 ) Medical 18,793 22,916 (4,123 ) Corporate - - - Total research and development $ 449,469 $ 858,767 $ (409,298 ) 31 Research and development expenses for the year ended December 31, 2025 were approximately $449,000 compared to $859,000 for the year ended December 31, 2024, representing a decrease of approximately $409,000, or 48%. The decrease in research and development expenses was primarily attributable to a reduction in dental-related research and development activities, which decreased to $0.4 million in 2025 from $0.8 million in 2024, representing a decrease of $0.4 million. This reduction reflects the Company’s decision to delay research and development efforts related to the next-generation Single Tooth Anesthesia System instrument during 2025. Medical research and development expenses decreased modestly to $0.02 million in 2025 from $0.02 million in 2024, reflecting limited ongoing development activity related to the Company’s medical product platform. Overall, the decrease in research and development expenses reflects management’s focus on cost containment and prioritization of resources toward commercialization and operational activities during 2025. Loss from Operations for 2025- and 2024 were as follows: 2025 2024 Change Dental $ 1,923,265 $ 1,574,242 $ 349,023 Medical (1,431,873 ) (2,055,950 ) 624,077 Corporate (6,188,009 ) (6,275,249 ) 87,240 Total loss from operations $ (5,696,617 ) $ (6,756,957 ) $ 1,060,340 Loss from operations for the year ended December 31, 2025, was approximately $(5,700,000) compared to $(6,800,000) for the year ended December 31, 2024, representing an improvement of approximately $1.06 million, or 16%. As a percentage of net sales, operating loss improved to approximately 63% of net sales in 2025 compared to approximately 78% of net sales in 2024. The year-over-year improvement in operating results primarily reflects lower operating expenses, including reductions in selling, general and administrative expenses and research and development expenditures, partially offset by a modest decline in gross margin percentage. Liquidity and Capital Resources Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: Cash flow: 2025 2024 Change Net cash used in operating activities $ (2,916,627 ) $ (2,919,875 ) $ 3,248 Net cash provided by (used in) investing activities (15,124 ) 2,966,449 (2,981,573 ) Net cash provided by financing activities 786,335 233,771 552,564 $ (2,145,416 ) $ 280,345 $ (2,425,761 ) Operating Activities Net cash used in operating activities for the year ended December 31, 2025, and 2024 was $2.9 million, which was substantially consistent year over year. Cash used in operating activities during both periods primarily reflects net losses, partially offset by non-cash charges and changes in working capital. Although loss from operations improved in 2025, operating cash usage remained comparable to the prior year due to changes in working capital accounts, including the timing of customer collections and vendor payments. For the year ended December 31, 2024, the Company received approximately $2.0 million, net of related expenses, from the sale of New Jersey net operating losses under the New Jersey Economic Development Authority’s Technology Business Tax Certificate Transfer Program. 32 Investing Activities Net cash used in investing activities for the year ended December 31, 2025, was approximately $0.02 million, compared to net cash provided by investing activities of approximately $3.0 million in 2024. However, the cash provided by investing activities in 2024 was primarily attributable to proceeds from the sale of net operating losses. Investing activity in 2025 was minimal and consisted primarily of routine capital expenditures. Financing Activities Net cash provided by financing activities for the year ended December 31, 2025, was approximately $0.8 million, compared to $0.2 million in 2024. The increase in cash provided by financing activities during 2025 primarily reflects financing proceeds, including related-party financing, partially offset by repayments and other financing-related outflows. Management continues to monitor liquidity and implement cost-containment initiatives. The Company’s ability to meet its future operating requirements will depend on its operating performance and its ability to obtain additional financing, as discussed in the going concern disclosure. Contractual Obligations The impact of the consolidated contractual obligations on December 31, 2025, on the liquidity and cash flows in future periods, is as follows: Payments Due by Period Total Less than 1 Year 1-3 Years Operating lease obligations $ 229,274 152,793 76,481 Purchase obligations $ 2,313,252 1,506,101 807,151 Total $ 2,542,526 1,658,894 883,632 Recent Accounting Pronouncements See “Note C - Summary of Significant Accounting Policies” to the consolidated financial statements for an 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 33