Milestone Scientific Q3 sales fall 5.9% to $2.22M
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Milestone Scientific Inc. (MLSS) reported third-quarter product sales of $2.22 million, down 5.9% from $2.36 million a year earlier; nine-month sales were $7.22 million versus $6.92 million. Nine-month net loss narrowed to $2.47 million from $4.63 million, and cash used in operating activities was $1.245 million versus $2.690 million.
The company completed a private placement on April 20, 2026, issuing 7,962,963 units at $0.27 each for $2.15 million in gross proceeds, including $1.80 million in cash and $351,000 of convertible-note principal. Each unit included one common share and one warrant to buy a share at $0.3375; warrants are exercisable after six months through the third anniversary.
At September 30, cash was $1.315 million and working capital was $3.5 million. Recurring operating losses and negative operating cash flows leave substantial doubt about the company’s ability to continue as a going concern within one year after the statements are issued; management expects additional financing to fund operations. Equity was $3.66 million, below the NYSE American’s stated $4 million and $6 million thresholds; failure to regain compliance by April 8, 2027, could lead to delisting procedures.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointNine-month net loss narrowed to $2.47 million from $4.63 million.
- Moderate pointOperating cash used fell to $1.245 million from $2.690 million.
Negative
- Major pointSubstantial doubt remains about continuing as a going concern within one year after issuance.
- Moderate pointQ3 sales fell 5.9% year over year.
- Moderate point. Forward-looking: it has not happened yet and may not happen.April 8, 2027 is the deadline to regain NYSE American compliance.
Filing Explained
The plan adds potential dilution, but the approved performance awards had not become issued shares by September 30, 2026.
The company reports that stockholders approved raising the 2020 equity plan authorization to 28,750,000 shares and approved 11,202,513 performance-based restricted stock units; no PRSUs had been issued by
Separately, the option exchange replaced options covering 4,000,000 shares with options exercisable at
Key Figures
Key Terms
going concern financial
working capital financial
private placement financial
anti-dilutive financial
510(k) clearance regulatory
valuation allowance financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did MLSS report in the third quarter of 2026?
How much did MLSS raise in its 2026 private placement?
Does MLSS expect to need more financing?
When must MLSS regain NYSE American compliance?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to __________
Commission
file number
(Exact name of registrant as specified in its charter)
| State
or other jurisdiction of Incorporation or organization |
(I.R.S.
Employer Identification No.) |
(Address of principal executive offices)
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Symbol | Name of each exchange on which registered | ||
Securities registered pursuant to section 12(g) of the Act: NONE.
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. ☒
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). ☒
Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large, accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
As
of November 13, 2026, the registrant has a total of
MILESTONE SCIENTIFIC INC.
Form 10-Q
TABLE OF CONTENTS
| PART I—FINANCIAL INFORMATION | 4 | |
| Item 1. | Condensed Consolidated Financial Statements | 4 |
| Balance Sheets as of September 30, 2026 (Unaudited) and December 31, 2025 | 4 | |
| Statements of Operations for the three and nine months ended September 30, 2026, and 2025 (Unaudited) | 5 | |
| Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2026 and 2025 (Unaudited) | 6 | |
| Statements of Cash Flows for the three and nine months ended September 30, 2026 and 2025 (Unaudited) | 7 | |
| Notes to Condensed Consolidated Financial Statements (Unaudited) | 8 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 23 |
| Item 4. | Controls and Procedures | 23 |
| PART II—OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 24 |
| Item 1A. | Risk Factors | 24 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 26 |
| Item 3. | Defaults Upon Senior Securities | 26 |
| Item 4. | Mine Safety Disclosures | 26 |
| Item 5. | Other Information | 26 |
| Item 6. | Exhibits | 27 |
| Signatures | 28 | |
| 2 |
FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements within the meaning of the federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially, including the risks described in our Annual Report on Form 10-K and this Form 10-Q. Except as required by law, we undertake no obligation to update forward-looking statements.
| 3 |
Part I- Financial Information
Item 1. Financial Statements
MILESTONE SCIENTIFIC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| September 30, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance for credit losses of $ | ||||||||
| Accounts receivable, related party | ||||||||
| Accounts receivable | ||||||||
| Other receivables | - | |||||||
| Prepaid expenses and other current assets | ||||||||
| Inventories | ||||||||
| Advances on contracts | ||||||||
| Total current assets | ||||||||
| Furniture, fixtures and equipment, net | ||||||||
| Intangibles, net | ||||||||
| Right of use assets finance lease | ||||||||
| Right of use assets operating lease | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable, related party | ||||||||
| Accounts payable | ||||||||
| Accrued expenses and other payables | ||||||||
| Accrued expenses, related party | - | |||||||
| Accrued expenses | - | |||||||
| Current portion of finance lease liabilities | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-current portion of finance lease liabilities | ||||||||
| Non-current portion of operating lease liabilities | - | |||||||
| Convertible notes payable, related parties | - | |||||||
| Total liabilities | $ | $ | ||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders’ equity | ||||||||
| Common stock, par value $ | $ | $ | ||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Treasury stock, at cost, | ( | ) | ( | ) | ||||
| Total stockholders’ equity | $ | |||||||
| Total liabilities and stockholders’ equity | $ | |||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
MILESTONE SCIENTIFIC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ending | Three Months Ending | Nine Month Months Ending | Nine Month Months Ending | |||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||
| Product sales, net | $ | $ | $ | $ | ||||||||||||
| Cost of products sold | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Research and development expenses | ||||||||||||||||
| Depreciation and amortization expense | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest (expense) income, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share applicable to common stockholders— | ||||||||||||||||
| Basic and Diluted | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Weighted average shares outstanding and to be issued— | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
MILESTONE SCIENTIFIC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025
(UNAUDITED)
| Common Stock Shares | Common Stock Amount | Additional Paid in Capital | Accumulated Deficit | Treasury Stock | Total Stockholder Equity | |||||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Stock based compensation | - | - | - | - | ||||||||||||||||||||
| Common stock issued to board of directors for services | - | - | - | - | ||||||||||||||||||||
| Common stock issued to board of directors for services | ||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||
| Balance at March 31, 2026 | ( | ) | ( | ) | ||||||||||||||||||||
| Stock based compensation | - | - | - | - | ||||||||||||||||||||
| Common stock issued to board of directors for services | - | - | ||||||||||||||||||||||
| Common Stock issued in private offerings net of conversion | - | - | ||||||||||||||||||||||
| Common Stock issued in private offerings for convertible notes | - | - | ||||||||||||||||||||||
| Common stock issued for payment of consulting services | - | - | ||||||||||||||||||||||
| Common stock to be issued to employees for compensation | - | - | - | - | ||||||||||||||||||||
| Common stock to be issued to consultants for compensation | - | - | - | - | ||||||||||||||||||||
| Net loss | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||
| Balance at June 30, 2026 | ( | ) | ( | ) | ||||||||||||||||||||
| Stock based compensation | - | - | - | - | ||||||||||||||||||||
| Common stock issued for convertible notes and interest | - | - | ||||||||||||||||||||||
| Common stock issued to employees for compensation | ( | ) | - | - | - | |||||||||||||||||||
| Common Stock reserved for consultants reversed | - | ( | ) | - | - | ( | ) | |||||||||||||||||
| Net loss | - | - | ( | ) | - | ( | ) | |||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Common Stock Shares | Common Stock Amount | Additional Paid in Capital | Accumulated Deficit | Treasury Stock | Total Stockholder Equity | |||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Stock based compensation | - | - | - | - | ||||||||||||||||||||
| Common stock to be issued to employees for bonuses | - | - | - | - | ||||||||||||||||||||
| Common stock issued to board of directors for services | ( | ) | - | - | - | |||||||||||||||||||
| Net loss | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||
| Balance at March 31, 2025 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Stock based compensation | - | - | - | - | ||||||||||||||||||||
| Common stock issued for payment of consultant services | - | - | ||||||||||||||||||||||
| Common stock issued to board of directors for services | ( | ) | - | - | - | |||||||||||||||||||
| Net loss | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||
| Balance at June 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||
| Balance at September 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
MILESTONE SCIENTIFIC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR NINE MONTHS ENDED
(UNAUDITED)
| September 30, 2026 | September 30, 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | ( | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | ||||||||
| Amortization of intangibles | ||||||||
| Stock based compensation | ||||||||
| Employees paid in stock | ||||||||
| Expense paid in stock | ( | ) | ||||||
| Provision for credit losses | ||||||||
| Amortization of right-of-use asset | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Accounts receivable, related party | ( | ) | ||||||
| Other Receivable | ( | ) | - | |||||
| Inventories | ( | ) | ||||||
| Advances on contracts | ( | ) | ||||||
| Prepaid expenses and other current assets | ||||||||
| Accounts payable | ||||||||
| Accounts payable, related party | ( | ) | ||||||
| Accrued expenses | ( | ) | ( | ) | ||||
| Accrued expenses, related party | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Cash flows from investing activities: | ||||||||
| Purchase of furniture, fixtures, and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | $ | ( | ) | $ | ( | ) | ||
| Cash flows from financing activities: | ||||||||
| Proceeds from convertible notes payable | $ | - | $ | |||||
| Proceeds from the Private Placement | - | |||||||
| Payments of equity issuance costs | ( | ) | - | |||||
| Payments finance lease obligations | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | $ | $ | ||||||
| Net (decrease) increase in cash and cash equivalents | $ | $ | ( | ) | ||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||
| Supplemental disclosure of noncash financing activities | ||||||||
| Convertible notes payable converted into common stock | - | |||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 7 |
MILESTONE SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 — ORGANIZATION AND BUSINESS
References to “Milestone Scientific,” “us,” “our,” “we,” the “Company” or “Milestone” refer to Milestone Scientific Inc. and its consolidated subsidiaries, unless the context otherwise indicates.
Milestone Scientific is a biomedical technology company that designs, develops and commercializes computer-controlled injection technologies for dental and medical applications. We have developed a proprietary computer-controlled anesthetic delivery system based on our DPS Dynamic Pressure Sensing Technology® platform. The technology is designed to address the limitations of the traditional manual syringe by enabling precise, controlled delivery of anesthetic and other injectable drugs, as well as fluid aspiration. Our proprietary DPS technology regulates flow rate and continuously monitors pressure at the tip of the needle, providing healthcare practitioners with greater control during injections. The platform supports a range of dental and medical applications, including local anesthesia, subcutaneous drug delivery, and regional anesthesia procedures.
Our device, using The Wand®, a single use disposable handpiece, is marketed in dentistry under the trademark CompuDent®, and STA Single Tooth Anesthesia System® and is suitable for all dental procedures that require local anesthetic.
NOTE 2 — GOING CONCERN AND LIQUIDITY
The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate the continuation of the Company as a going concern. The going concern basis of accounting assumes that assets will be realized and liabilities will be settled in the ordinary course of business.
The
Company has incurred recurring losses from operations and negative cash flows from operating activities and had an accumulated deficit
of approximately $
On
April 20, 2026, the Company completed a private placement of
Each
warrant entitles the holder to purchase one share of common stock at an exercise price of $
Management’s plans to address the Company’s liquidity requirements include increasing revenues through its dental and medical businesses, expanding distribution opportunities, managing operating expenses, improving working capital efficiency, and pursuing additional financing opportunities, if necessary.
Although the completion of the Private Placement in April 2026 improved the Company’s liquidity position, the Company’s ability to continue as a going concern remains dependent upon its ability to generate sufficient revenue, achieve positive operating cash flows, manage operating expenses, and obtain additional financing, if necessary. There can be no assurance that these plans will be successfully implemented or that additional financing will be available on acceptable terms.
Based on the Company’s recurring operating losses, negative operating cash flows, and uncertainty regarding its ability to generate sufficient liquidity to fund operations, substantial doubt about the Company’s ability to continue as a going concern has not been alleviated.
| 8 |
The accompanying condensed consolidated financial statements do not include any adjustments to the recoverability or classification of assets or the amounts or classification of liabilities that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Milestone Scientific Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year or any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K.
2. Correction of Immaterial Error
During the third quarter of 2026, the Company conducted a review of royalty obligations under its Technology Sale Agreement, as amended, with its Director of Clinical Affairs. Based on its review of the applicable patent expiration dates and contractual provisions, the Company determined that certain royalty amounts previously accrued were no longer payable under the terms of the agreement.
As
a result, the Company identified an overstatement of accrued royalty liabilities of $
Management evaluated the error in accordance with Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections, and the guidance provided in Securities and Exchange Commission Staff Accounting Bulletins (“SAB”) Nos. 99 and 108, considering both quantitative and qualitative factors.
Based on this assessment, management concluded that the error was not material to the Company’s previously issued consolidated financial statements. Accordingly, the Company revised its December 31, 2025 consolidated balance sheet to correct the error.
The
revision resulted in a decrease of approximately $
The following table summarizes the impact of the revision on the Company’s consolidated balance sheet as of December 31, 2025:
SCHEDULE OF IMPACT OF REVISION ON THE COMPANY’S CONSOLIDATED BALANCE SHEET
| Balance Sheet Line Item | As Previously Reported | Adjustment | As Revised | |||||||||
| Accrued expenses, related party | $ | $ | ( | ) | $ | |||||||
| Total current liabilities | ( | ) | ||||||||||
| Total liabilities | ( | ) | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
| Total stockholders’ equity | ||||||||||||
| Total liabilities and stockholders’ equity | $ | — | $ | |||||||||
The revised December 31, 2025 balances are reflected in the accompanying condensed consolidated balance sheets. The correction is also reflected in the Company’s opening accumulated deficit for the nine months ended September 30, 2026.
The
Company will reflect the corresponding revisions in future filings that include the affected historical financial statements. The revised March 31, 2026 stockholders’ equity was adjusted by approximately
$
| 9 |
3. Loss per Share
Basic and diluted net loss per common share was determined by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding during the period.
SCHEDULE OF BASIC AND DILUTED NET LOSS PER COMMON SHARE
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Basic and diluted net loss per common share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Denominator: | ||||||||||||||||
| Weighted average common shares outstanding (1) | ||||||||||||||||
| Net loss per share of common stock—basic and diluted | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| (1) |
The following outstanding securities at September 30, 2026 and 2025 have been excluded from the computation of basic and diluted weighted shares outstanding, as they would have been anti-dilutive due to net loss:
SCHEDULE OF OUTSTANDING SECURITIES EXCLUDED FROM COMPUTATION OF BASIC AND DILUTED WEIGHTED SHARES OUTSTANDING
| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||
| Common shares issuable for: | ||||||||
| Stock options | ||||||||
| Restricted Stock Awards | - | |||||||
| Warrants – equity classified | - | |||||||
| Convertibles Notes | - | |||||||
| Total | ||||||||
4. Recent Accounting Pronouncements
Recently Issued Accounting Pronouncement
In November 2024, the Financial Accounting Standards Board, “FASB”, issued Accounting Standards Update “ASU” 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), to improve the disaggregation of expenses within the consolidated statement of operations. The amendments in ASU 2024-03 require disclosures, in the notes to the consolidated financial statements, specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity disclose (a) employee compensation, (b) depreciation, and (c) intangible asset amortization included in each relevant expense caption; include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements; and disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. The amendments in ASU 2024-03 are effective January 1, 2027, and effective for interim periods beginning January 1, 2028. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company will evaluate the impact of ASU 2024-03 on its financial statements.
NOTE 4 — INVENTORIES, NET
Inventories consist of the following:
SCHEDULE OF INVENTORIES
| September 30, 2026 | December 31, 2025 | |||||||
| Dental finished goods | $ | $ | ||||||
| Medical finished goods | $ | |||||||
| Inventory finished goods | $ | |||||||
| Component parts and other materials | ||||||||
| Total inventories | $ | $ | ||||||
| 10 |
The
Company had an allowance on slow moving Medical finished goods due to the slow adoption of the epidural instruments and handpieces for
approximately $
NOTE 5 — ADVANCES ON CONTRACTS
The
advances on contracts represent funding for future Single Tooth Anesthesia System® (STA) devices, epidural instruments, and epidural
replacement parts. The balance of the advances as of September 30, 2026 and December 31, 2025, is approximately $
NOTE 6— STOCKHOLDERS’ EQUITY
WARRANTS
On
April 20, 2026, the Company completed a private placement of
Each
warrant is exercisable for one share of common stock at $
The following table summarizes information about warrants for the nine month periods ending September 30, 2026.
SCHEDULE OF INFORMATION ABOUT SHARES ISSUABLE UNDER WARRANTS OUTSTANDING
| Warrant shares outstanding | Weighted average exercise price $ | Weighted average remaining life (years) | Intrinsic value $ | |||||||||||||
| Outstanding at January 1, 2026 | - | - | - | $ | - | |||||||||||
| Issued | - | |||||||||||||||
| Outstanding at September 30, 2026 | ||||||||||||||||
SHARES TO BE ISSUED
As
of September 30, 2026, and 2025, there were
As
of September 30, 2026 and 2025 there were
The following table summarizes information about shares to be issued for the nine month periods ending September 30, 2026 and 2025.
SCHEDULE OF SHARES TO BE ISSUED
| September 30, 2026 | September 30, 2025 | |||||||
| Shares-to-be-issued, outstanding January 1, 2026 and 2025, respectively | ||||||||
| Shares-to-be-issued, outstanding beginning balance | ||||||||
| Granted in current period | ||||||||
| Issued in current period | ( | ) | - | |||||
| Shares-to be issued outstanding September 30, 2026 and 2025, respectively | ||||||||
| Shares-to be issued outstanding ending balanceShares-to be issued outstanding ending balance | ||||||||
| 11 |
NOTE 7 — STOCK OPTION PLANS
The
Amended and Restated 2020 Equity Incentive Plan (the “2020 Plan”), as amended by stockholders on July 27, 2026, authorizes
up to
On
April 30, 2026 (the “Effective Date”), the Compensation Committee of the Board of Directors (the “Compensation Committee”)
of the Company approved a one-time stock option exchange program (the “Exchange Program”) for outstanding stock options granted
under the Company’s 2020 Plan and the applicable award agreements thereunder, held by Eric Hines, the President and Chief Executive
Officer, and Jason Papes, the Senior Vice President, Global Head of Sales and Marketing, of the Company (“Eligible Options”),
all of which have exercise prices that exceed the current fair market value of the Company’s common stock (the “Common Stock”).
The Exchange Program was undertaken in accordance with, and as expressly permitted by, the 2020 Plan and the applicable award agreements
thereunder, and provides that such eligible participants may voluntarily elect to surrender some or all of their Eligible Options in
exchange for newly granted stock options to purchase shares of the Company’s Common Stock, at an exercise price reduced to $
The
number of shares of Common Stock issuable upon the exercise of each of the Repriced Options (
The Company accounted for each Repriced Option as a modification under ASC 718, Compensation—Stock Compensation, and the Company measured the fair value of the modified awards immediately before and immediately after the modification using the Black-Scholes-Merton option-pricing model.
The
Company estimated the fair value of the Repriced Options immediately before the Effective Date using the Black-Scholes option pricing
model with the following assumptions: a risk-free interest rate of
The
Company estimated the fair value of the Repriced Options immediately after the Effective Date using the Black-Scholes option pricing
model with the following assumptions: a risk-free interest rate of
The
recommendation of the award of PRSUs under the Sub-Plan was subject to stockholder approval to increase the number of shares covered
by the 2020 Plan to account for the recommendation to issue PRSU awards under the Sub-Plan, which increase was approved by the stockholders
at the Company’s Annual Meeting on July 27, 2026 In April 2026, the Compensation Committee established a performance-based restricted
stock unit sub-plan to the 2020 Plan, as the framework together with the 2020 Plan for the award of performance-based restricted stock
units (“PRSUs”), with a fixed pool of up to
| 12 |
As
a result of the measurement of the modified awards immediately before and after the modification date, the Company determined an
incremental fair value of $
Milestone Scientific recognizes
compensation expenses over the requisite service period and in the case of performance-based options over the period of the expected
performance. For the three and nine months ended September 30, 2026, Milestone Scientific recognized approximately $
As
of September 30,2026, there was approximately $
A summary of option activity for employees under the plans and changes during the nine months ended September 30, 2026 is presented below:
SCHEDULE OF STOCK OPTION ACTIVITY
| Number of Options | Weighted Averaged Exercise Price $ | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Options Value $ | |||||||||||||
| Options outstanding at January 1, 2026 | - | |||||||||||||||
| Granted during 2026(1) | - | |||||||||||||||
| Exercised during 2026 | - | - | - | - | ||||||||||||
| Forfeited or expired during 2026 | ( | ) | - | - | ||||||||||||
| Options outstanding September 30, 2026 | ||||||||||||||||
| Exercisable, September 30, 2026 | ||||||||||||||||
| (1) |
A summary of option activity for non-employees under the plans and changes during the nine months ended September 30, 2026 is presented below:
SCHEDULE OF STOCK OPTION ACTIVITY
| Number of Options | Weighted Averaged Exercise Price $ | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Options Value $ | |||||||||||||
| Options outstanding at January 1, 2026 | - | |||||||||||||||
| Granted during 2026 | - | - | - | - | ||||||||||||
| Exercised during 2026 | - | - | - | - | ||||||||||||
| Forfeited or expired during 2026 | ( | ) | - | - | ||||||||||||
| Options outstanding June 30, 2026 | - | |||||||||||||||
| Exercisable, September 30, 2026 | - | |||||||||||||||
For
the three and nine months ended September 30, 2026 Milestone Scientific recognized approximately $
A summary of restricted stock under the plans and changes during the nine months ended September 30, 2026 is presented below:
SCHEDULE OF RESTRICTED STOCK
| Number of Shares | Weighted Average Grant-Date Fair Value per Award | |||||||
| Non-vested as January 1, 2026 | - | - | ||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Cancelled | - | - | ||||||
| Non-vested as September 30, 2026 | ||||||||
| 13 |
On
January 1, 2026, the Company entered into restricted stock agreements with members of the Board of Directors of the Company. The Company
granted
For
the three months ended September 30, 2026 and 2025, the Company recognized approximately $
As
of September 30, 2026 there was
NOTE 8 — INCOME TAXES
The
utilization of Milestone Scientific’s net operating losses may be subject to a substantial limitation due to the “change
of ownership provisions” under Section 382 of the Internal Revenue Code and similar state provisions. Such limitation may result
in the expiration of the net operating loss carry forwards before their utilization. Milestone Scientific has established a
NOTE 9 — SEGMENT AND GEOGRAPHIC DATA
Operating
segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating
decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified
as the Chief Executive Officer (the “CODM”). The Company conducts its business through
The Company provides general corporate services to its segments; however, these services are not considered when making operating decisions and assessing segment performance. These services are reported under “Corporate Services” below, and these include costs associated with executive management, investor relations, patents, trademarks, licensing agreements, new instruments developments, financing activities and public company compliance.
The following tables present information about our reportable and operating segments for the three and nine months ended September 30, 2026, and 2025:
SCHEDULE OF REPORTABLE AND OPERATING SEGMENTS
| Corporate | Dental | Medical | Grand Total | |||||||||||||
| Three Months ending September 30, 2026 | ||||||||||||||||
| Corporate | Dental | Medical | Grand Total | |||||||||||||
| Product sales, net | - | |||||||||||||||
| Cost of products sold | - | |||||||||||||||
| Gross Margin | - | |||||||||||||||
| Salaries & employee benefits | ||||||||||||||||
| Stock-based compensation expense | - | - | ||||||||||||||
| Royalty expense | - | |||||||||||||||
| Marketing | ||||||||||||||||
| Rent & occupancy costs | ||||||||||||||||
| Consultants and professional services fees | ||||||||||||||||
| Insurance | ||||||||||||||||
| Warehousing expense | ||||||||||||||||
| Regulatory expense | ||||||||||||||||
| Travel expense | ||||||||||||||||
| Research and development expense | - | - | ||||||||||||||
| Depreciation and amortization expense | - | - | ||||||||||||||
| Other segment items | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| 14 |
| Corporate | Dental | Medical | Grand Total | |||||||||||||
| Three Months ending September 30, 2025 | ||||||||||||||||
| Corporate | Dental | Medical | Grand Total | |||||||||||||
| Product sales, net | - | |||||||||||||||
| Cost of products sold | - | |||||||||||||||
| Gross Margin | - | |||||||||||||||
| Salaries & employee benefits | ||||||||||||||||
| Stock-based compensation expense | - | - | ||||||||||||||
| Royalty expense | - | |||||||||||||||
| Marketing | ||||||||||||||||
| Rent & occupancy costs | ||||||||||||||||
| Consultants and professional services fees | ||||||||||||||||
| Insurance | ||||||||||||||||
| Warehousing expense | ||||||||||||||||
| Regulatory expense | ||||||||||||||||
| Travel expense | ||||||||||||||||
| Research and development expense | - | |||||||||||||||
| Depreciation and amortization expense | - | - | ||||||||||||||
| Other segment items | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Corporate | Dental | Medical | Grand Total | |||||||||||||
| Nine Months ending September 30, 2026 | ||||||||||||||||
| Corporate | Dental | Medical | Grand Total | |||||||||||||
| Product sales, net | - | |||||||||||||||
| Cost of products sold | - | |||||||||||||||
| Gross Margin | - | |||||||||||||||
| Salaries & employee benefits | ||||||||||||||||
| Stock-based compensation expense | - | - | ||||||||||||||
| Royalty expense | - | |||||||||||||||
| Marketing | ||||||||||||||||
| Rent & occupancy costs | ||||||||||||||||
| Consultants and professional services fees | ||||||||||||||||
| Insurance | ||||||||||||||||
| Warehousing expense | ||||||||||||||||
| Regulatory expense | ||||||||||||||||
| Travel expense | ||||||||||||||||
| Research and development expense | - | |||||||||||||||
| Depreciation and amortization expense | - | - | ||||||||||||||
| Other segment items | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| 15 |
| Corporate | Dental | Medical | Grand Total | |||||||||||||
| Nine Months ending September 30, 2025 | ||||||||||||||||
| Corporate | Dental | Medical | Grand Total | |||||||||||||
| Product sales, net | - | |||||||||||||||
| Cost of products sold | - | |||||||||||||||
| Gross Margin | - | |||||||||||||||
| Salaries & employee benefits | ||||||||||||||||
| Stock-based compensation expense | - | - | ||||||||||||||
| Royalty expense | - | |||||||||||||||
| Marketing | ||||||||||||||||
| Rent & occupancy costs | ||||||||||||||||
| Consultants and professional services fees | ||||||||||||||||
| Insurance | ||||||||||||||||
| Warehousing expense | ||||||||||||||||
| Regulatory expense | ||||||||||||||||
| Travel expense | ||||||||||||||||
| Research and development expense | - | |||||||||||||||
| Depreciation and amortization expense | - | - | ||||||||||||||
| Other segment items | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| September 30, 2026 | ||||||||||||||||
| Dental | Medical | Corporate | Total | |||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
| December 31, 2025 | ||||||||||||||||
| Dental | Medical | Corporate | Total | |||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
NOTE 10 – CONCENTRATIONS
The Company relies on a limited number of third-party manufacturers for its STA and epidural products. A disruption in these manufacturing relationships could materially affect product supply.
E-Commerce
accounted for
The
Company had four distributors that accounted for
As
of September 30, 2026, the Company had four suppliers that accounted for
NOTE 11 — RELATED PARTY TRANSACTIONS
Director of Clinical Affairs
The Company pays royalty fees to its Director of Clinical Affairs pursuant to a Technology Sale Agreement, as amended, relating to certain Company products embodying technology covered by patents purchased by the Company from the Director of Clinical Affairs.
| 16 |
For
the three and nine months ended September 30, 2026, the Company recognized approximately $
Consulting
expense attributable to the Director of Clinical Affairs was approximately $
Under the Technology Sale Agreement, as amended, the Director of Clinical Affairs is also entitled to receive stock options upon the issuance of patents for inventions made by the Director of Clinical Affairs and purchased by the Company. Any stock options granted upon satisfaction of these patent-related milestones are accounted for as stock-based compensation in accordance with applicable accounting guidance and the terms of the respective award agreements. As of September 30, 2026 no new options were issued.
Directors
Dr. D. Demesmin, Director
As
of February 2024, the University Pain Medicine Center (STEMMEE), of which Dr. D. Demesmin, a member of the Company’s Board of Directors,
serves as Chief Executive Officer, agreed to purchase products from the Company under terms and conditions consistent with those offered
to other medical pain clinics in the United States. STEMMEE purchased medical products totaling approximately $
Arjan J. Haverhals, Former Director
As
of September 30, 2026 and December 31, 2025, the Company owed Mr. Haverhals approximately $
During
2026, Mr. Haverhals agreed to waive approximately $
During
the third quarter of 2026, the Company issued
April 2025 Convertible Notes
On March 31, 2026, the Company entered into an amendment to the MOU to, among other things, revise the definition of “Qualified Offering” in order to facilitate an offering by the Company, and required certain additional persons and entities to enter into lock-up agreement. The Private Placement on April 20, 2026 satisfied the requirement of a “Qualified Offering” and the required additional persons and entities signed lock-up agreements.
On
April 9, 2025, the Company issued an aggregate of $
On
April 20, 2026, the Company completed the Private Placement of
| 17 |
On
July 24, 2026, the Company received notices of conversion (the “Conversion Notices”) from each of the Holders with respect
to the Company’s Convertible Notes. The Conversion Notices constituted the Holders’ elections, pursuant to Section 5(a) of
the Convertible Notes, to convert the remaining outstanding principal amount and accrued interest under their respective Convertible
Notes into shares of the Company’s common stock, effective automatically at such time as the Fair Value (as defined in the Convertible
Notes) of the common stock is not less than $
On
August 19, 2026, the Holders elected to convert the remaining Convertible Notes. The principal amount of the convertible Notes was approximately
$
BP4
S.r.l. / Innovest S.p.A.\n\nBP4 S.r.l. (“BP4”) is a significant shareholder of the Company, beneficially owning approximately
NOTE 12 — Commitments and Contingencies
Contract Manufacturing Agreement
The
Company is a party to a Contract Manufacturing Agreement with a third-party manufacturer for the production and supply of certain products.
As of September 30, 2026, the Company had outstanding purchase obligations of approximately $
Lease Obligations
As
of September 30, 2026, the Company also has lease obligations totaling approximately $
NOTE 13 — SUBSEQUENT EVENT
On
October 1, 2026, subsequent to the balance sheet date, the Company entered into an amendment to its existing office lease for new
office space located at 425 Eagle Rock Avenue, Suite 201, Roseland, New Jersey. The amended lease provides for the Company’s
relocation to the new premises and includes approximately nine months of free rent. The Company expects the relocation to reduce its
annual occupancy costs by approximately $
| 18 |
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the year ended December 31, 2025.
This discussion contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those anticipated in these forward-looking statements.
OVERVIEW
Milestone Scientific develops and commercializes injection technologies for dental and medical applications. See Note 1 for additional business information.
The Company operates in two reportable segments:
| ● | Dental, which represents the Company’s primary source of revenue and is driven by sales of instruments and recurring handpiece consumables; and | |
| ● | Medical, which represents a strategic growth area focused on the commercialization of the CompuFlo® Epidural System. |
Current Product Platform
See Note 1, “Organization and Business”.
Results of Operations
The following table sets forth the consolidated results of operations for the three and nine months ended September 30, 2026 and 2025, respectively. The trends suggested by this table may not be indicative of future operating results:
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||||||||
| Product sales, net | $ | 2,219,747 | $ | 2,360,117 | $ | 7,222,818 | $ | 6,916,003 | ||||||||
| Cost of products sold | 614,218 | 719,247 | 2,143,098 | 2,010,092 | ||||||||||||
| Gross profit | 1,605,529 | 1,640,870 | 5,079,720 | 4,905,911 | ||||||||||||
| Selling, general and administrative expenses | 2,321,312 | 2,739,011 | 7,460,752 | 9,026,691 | ||||||||||||
| Research and development expenses | 10,413 | 16,226 | 17,022 | 437,135 | ||||||||||||
| Depreciation and amortization expense | 20,096 | 20,104 | 59,139 | 59,040 | ||||||||||||
| Total operating expenses | 2,351,821 | 2,775,341 | 7,536,913 | 9,522,866 | ||||||||||||
| Loss from operations | (746,292 | ) | (1,134,471 | ) | (2,457,193 | ) | (4,616,955 | ) | ||||||||
| Interest (expense) income, net | (1,253 | ) | (19,488 | ) | (10,792 | ) | (14,700 | ) | ||||||||
| Loss before provision for income taxes | (747,545 | ) | (1,153,959 | ) | (2,467,985 | ) | (4,631,655 | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net loss | $ | (747,545 | ) | $ | (1,153,959 | ) | $ | (2,467,985 | ) | $ | (4,631,655 | ) | ||||
Three Months Ended September 30, 2026 Compared with the Three Months Ended September 30, 2025
Product Sales, Net
Product sales, net for the three months ended September 30, 2026 were approximately $2.2 million compared with approximately $2.4 million for the three months ended September 30, 2025, a decrease of approximately $140,000, or 5.9%.
| 19 |
The decrease was primarily attributable to lower Dental sales. Sales of Dental Devices decreased approximately $187,000, or 33.8%, to approximately $367,000 compared with approximately $554,000 for the comparable period in 2025. Sales of Dental Handpieces decreased approximately $22,000, or 1.3%, to approximately $1.7 million compared with approximately $1.8 million for the comparable prior-year period. Dental repair income also increased approximately $10,000 during the current-year quarter.
Sales of Medical Handpieces increased approximately $51,000, or 123.2%, to approximately $92,000 compared with approximately $41,000 for the comparable period in 2025. Medical Device sales were approximately $4,000 during the current-year quarter compared with no significant Medical Device sales during the comparable prior-year period.
Cost of Products Sold and Gross Profit
Cost of products sold was approximately $614,000 for the three months ended September 30, 2026 compared with approximately $719,000 for the comparable period in 2025, a decrease of approximately $105,000.
Gross profit was approximately $1.6 million for each of the three-month periods ended September 30, 2026 and 2025. Gross margin as a percentage of product sales was approximately 72.3% for the three months ended September 30, 2026 compared with approximately 69.5% for the comparable prior-year period. The improvement in gross margin was primarily attributable to an increase in the prices of our products during the current-year period
Operating Expenses
Total operating expenses decreased to approximately $2.4 million for the three months ended September 30, 2026 compared with approximately $2.8 million for the comparable period in 2025. The decrease was primarily attributable to lower salaries and compensation, stock-based compensation, professional fees and royalty expense, partially offset by increased marketing, regulatory, warehousing and travel expenses.
Salaries and compensation decreased by approximately $447,000 to approximately $914,000 for the three months ended September 30, 2026 compared with approximately $1.4 million for the comparable prior-year period. The decrease was primarily attributable to lower corporate salaries and directors’ fees and lower stock-based compensation, partially offset by increases in certain Dental and Medical personnel costs. Stock-based compensation expense was approximately $155,000 for the three months ended September 30, 2026 compared with approximately $363,000 for the comparable prior-year period, a decrease of approximately $208,000.
Professional fees decreased approximately $201,000 to approximately $452,000 for the three months ended September 30, 2026 compared with approximately $653,000 for the comparable prior-year period. The decrease primarily reflected lower consulting and certain professional service expenses, partially offset by higher legal expenses during the current-year quarter.
Royalty expense for the three months ending September 30, 2026 was approximately $23,000, a decrease of $95,000 from the same period in 2025.
Warehousing and logistics expenses increased to approximately $140,000 for the three months ended September 30, 2026 compared with approximately $118,000 for the comparable prior-year period, primarily as a result of increased warehousing and logistics activity.
Quality control and regulatory expenses increased to approximately $136,000 for the three months ended September 30, 2026 compared with approximately $64,000 for the comparable prior-year period. The increase primarily resulted from higher corporate and Medical regulatory-related expenditures during the current-year period.
Travel expense increased to approximately $114,000 for the three months ended September 30, 2026 compared with approximately $37,000 for the comparable prior-year period. The increase principally reflected greater travel activity associated with the Company’s commercial and Medical initiatives, including airfare, lodging, meals and ground transportation.
Marketing expense increased to approximately $140,000 for the three months ended September 30, 2026 compared with approximately $64,000 for the comparable prior-year period. The increase primarily reflected increased marketing consulting, key opinion leader, promotional, demonstration, trial and campaign-related activities supporting the Company’s Dental and Medical businesses.
| 20 |
Research and development expense for the three months ending September 30, 2026 was approximately $10,000, a decrease of approximately $6,000 compared to the same period in 2025.
Operating Loss
Operating loss for the three months ended September 30, 2026 was approximately $746,000, compared with an operating loss of approximately $1.1 million for the three months ended September 30, 2025, an improvement of approximately $354,000, or 32.2%. The improvement in operating results was primarily attributable to the approximately $600,000 decrease in operating expenses, including lower salaries and employee benefits, stock-based compensation expense, consultants and professional services fees, together with an improvement in gross margin. These improvements were partially offset by lower product sales and increases in marketing, regulatory, warehousing, travel and other operating expenses.
Nine Months Ended September 30, 2026 Compared with the Nine Months Ended September 30, 2025
Product Sales, Net
Product sales, net for the nine months ended September 30, 2026 were approximately $7.2 million compared with approximately $6.9 million for the comparable period in 2025. Sales of Dental Devices increased approximately $202,000 to approximately $1.7 million for the nine months ended September 30, 2026 compared with approximately $1.5 million for the comparable prior-year period. Sales of Dental Handpieces decreased approximately $119,000 to approximately $5.4 million compared with approximately $5.5 million for the comparable period in 2025. Dental repair income also increased approximately $26,000 to approximately $51,000 for the nine months ended September 30, 2026 compared with approximately $25,000 for the comparable prior-year period.
Medical Handpiece sales increased approximately $154,000 to approximately $274,000 compared with approximately $120,000 for the comparable prior-year period. Medical Device sales increased approximately $31,000 to approximately $36,000 compared with approximately $5,000 for the comparable period in 2025.
Cost of Products Sold and Gross Profit
Gross profit was approximately $5.1 million for the nine-month period ended September 30, 2026 and approximately $4.9 million for the nine-month period ended September 30, 2025. Gross margin as a percentage of product sales was approximately 70.3% for the three months ended September 30, 2026 compared with approximately 70.9% for the comparable prior-year period. The improvement in gross margin was primarily attributable to an increase in the prices of our products during the current-year period. However, cost of products sold increased at a faster rate than revenue, resulting in a modest decline in gross profit margin.
Cost of products sold increased to approximately $2.1 million for the nine months ended September 30, 2026 compared with approximately $2.0 million for the comparable prior-year period.
Operating Expenses
Total operating expenses decreased approximately $2.0 million, or approximately 21%, to approximately $7.5 million for the nine months ended September 30, 2026 compared with approximately $9.5 million for the comparable period in 2025.
Salaries and compensation decreased to approximately $3.2 million for the nine months ended September 30, 2026 compared with approximately $3.5 million for the comparable prior-year period.
Professional fees decreased to approximately $1.7 million for the nine months ended September 30, 2026 compared with approximately $2.8 million for the comparable period in 2025, a decrease of approximately $1.2 million. The decrease primarily reflected lower consulting and other professional service costs during the current-year period. Royalty expense was approximately $91,000 for the nine months ended September 30, 2026, compared with approximately $351,000 for the comparable period in 2025.
Warehousing and logistics expense increased to approximately $454,000 for the nine months ended September 30, 2026 compared with approximately $378,000 for the comparable prior-year period. Travel expense increased to approximately $262,000 for the nine months ended September 30, 2026 compared with approximately $178,000 for the comparable prior-year period, reflecting increased commercial and Medical-related travel activity.
Quality control and regulatory expense decreased to approximately $361,000 for the nine months ended September 30, 2026 compared with approximately $482,000 for the comparable prior-year period. These decreases were partially offset by higher warehousing, travel and marketing expenses.
| 21 |
Marketing expense increased to approximately $322,000 for the nine months ended September 30, 2026 compared with approximately $253,000 for the comparable prior-year period, reflecting increased marketing programs, consulting, key opinion leader activities, demonstrations, trials and promotional activities.
Research and development expense decreased to approximately $3,000 for the nine months ended September 30, 2026 compared with approximately $432,000 for the comparable prior-year period. The prior-year period included significant product development consulting costs.
Loss from Operations
Loss from operations decreased to approximately $2.5 million for the nine months ended September 30, 2026 compared with approximately $4.6 million for the comparable period in 2025, an improvement of approximately $2.1 million.
The improvement primarily reflected significantly lower professional fees and research and development expenses, lower salaries and compensation and royalty expense, partially offset by increased warehousing, marketing and travel expenses.
Liquidity and Capital Resources
Cash Flows
The following table summarizes our sources and uses of cash for the nine months ended:
| 2026 | 2025 | Change | ||||||||||
| Cash flow: | ||||||||||||
| Net cash used in operating activities | (1,244,584 | ) | $ | (2,690,498 | ) | $ | 1,445,914 | |||||
| Net cash used in investing activities | (7,433 | ) | (12,008 | ) | 4,575 | |||||||
| Net cash provided by financing activities | 1,454,776 | 789,749 | 665,027 | |||||||||
| $ | 202,759 | $ | (1,912,757 | ) | $ | 2,115,516 | ||||||
Operating Activities
Net cash used in operating activities was approximately $1.2 million for the nine months ended September 30, 2026, compared with approximately $2.7 million for the nine months ended September 30, 2025, representing a decrease of approximately $1.4 million.
The decrease in cash used in operating activities was primarily attributable to a reduction in net loss and favorable changes in certain operating assets and liabilities, including decreases in inventories and advances on contracts, partially offset by changes in accounts receivable and related-party payables.
For the nine months ended September 30, 2026, the Company reported a net loss of approximately $2.5 million, compared with approximately $4.6 million for the corresponding period in 2025. Despite the improvement in operating cash flows, the Company continues to use cash to fund its operations.
Investing Activities
Net cash used in investing activities was approximately $7,000 for the nine months ended September 30, 2026, compared with approximately $12,000 for the corresponding period in 2025. Cash used in investing activities during both periods primarily consisted of purchases of furniture, fixtures and equipment
Financing Activities
Net cash provided by financing activities was approximately $1.5 million for the nine months ended September 30, 2026, compared with approximately $790,000 for the corresponding period in 2025, representing an increase of approximately $665,000.
| 22 |
On April 20, 2026, the Company completed a private placement of 7,962,963 units at a purchase price of $0.27 per unit, with each unit consisting of one share of common stock and one warrant to purchase one share of common stock (the “Private Placement”). The Private Placement generated gross proceeds of approximately $2.15 million, consisting of approximately $1.80 million in cash and approximately $351,000 of outstanding convertible note principal applied toward the purchase of units in lieu of cash. The Company incurred approximately $333,000 in equity issuance costs related to the Private Placement.
Each warrant issued in the Private Placement entitles the holder to purchase one share of common stock at an exercise price of $0.3375 per share and is exercisable for three years. If all warrants are exercised, the Company could receive approximately $2.69 million in additional gross proceeds. However, there can be no assurance that any or all of the warrants will be exercised. As of September 30, 2026 no warrants have been exercised.
During the third quarter of 2026, the remaining outstanding convertible notes were converted into shares of the Company’s common stock. As of September 30, 2026, the Company had no remaining outstanding principal balance related to these convertible notes. The conversion of the notes was a noncash financing transaction and, accordingly, did not affect net cash provided by financing activities.
Consideration of the Company’s ability to continue as a going concern.
As of September 30, 2026, the Company had cash and cash equivalents of approximately $1.3 million, working capital of approximately $3.5 million, and an accumulated deficit of approximately $136.0 million. The Company has incurred recurring losses from operations and negative cash flows from operating activities. For the three and nine months ended September 30, 2026, the Company incurred operating losses of approximately $568,000 and $2.5 million, respectively. Net cash used in operating activities for the nine months ended September 30, 2026, was approximately $1.2 million.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of the accompanying unaudited condensed consolidated financial statements. The completion of the Private Placement in April 2026 improved the Company’s liquidity position and provided additional capital to support operations. In addition, the conversion of the remaining convertible notes during the third quarter of 2026 eliminated the related outstanding principal obligations.
Management’s plans to address the Company’s liquidity requirements include increasing revenues through its dental and medical businesses, expanding domestic and international distribution opportunities, managing operating expenses, improving working capital efficiency, and pursuing additional financing opportunities, if necessary.
Management believes that existing cash resources, anticipated customer collections, and continued expense management measures will support near-term operating activities. However, the Company expects that additional financing will be required to fund its anticipated operating requirements over the assessment period.
There can be no assurance that the Company will achieve sufficient revenue growth, generate positive cash flows from operations, or obtain additional financing when needed or on terms acceptable to the Company.
As discussed in Note 2 to the accompanying unaudited condensed consolidated financial statements, management has concluded that its plans do not currently alleviate the substantial doubt regarding the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.
Item 3. 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 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Principal Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.
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Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such an evaluation, our Chief Executive Officer and Principal Accounting Officer concluded that, as of September 30, 2026, our disclosure controls and procedures were effective at a reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the three months ended September 30, 2026 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
Item 1 – Legal Proceedings
None
Item 1A. Risk Factors
As a smaller reporting company, the Company is not required to provide the information required by this Item.
Investing in our securities involves significant risks. In addition to the information contained elsewhere in this Quarterly Report on Form 10-Q, investors should carefully consider the risk factors disclosed in our Annual Report on Form 10-K for the year ended 2025. Nevertheless, set forth below, is a summary of certain of such risk factors.
We are dependent on our dental product line for the majority of our revenue
A significant portion of the Company’s revenue is derived from its dental products, particularly the STA Single Tooth Anesthesia System® and related handpieces. Any decline in demand, increased competition, pricing pressures, or disruption in distribution channels for these products could have a material adverse effect on the Company’s financial condition and results of operations.
Our medical product commercialization efforts may not achieve the expected adoption
The Company is in the process of expanding the commercialization of its medical products, including the CompuFlo® Epidural Computer Controlled Anesthesia System. While the Company has obtained 510(k) clearance from the FDA, CE mark approval for European markets, and a Category III CPT code to support reimbursement submissions, adoption by healthcare providers may take longer than expected and the Company has maintained a material allowance against slow-moving Medical finished goods inventory as a result. Factors such as continued reimbursement uncertainty, clinician adoption rates, competition, and sales execution capacity may further limit the Company’s ability to generate meaningful revenue from its medical segment, and there can be no assurance that the Company’s investment in medical inventory and commercialization efforts will be recovered.
Changes to United States tariff and import/export regulations may have a material adverse effect on our business, financial condition and results of operations.
The United States has recently enacted and proposed to enact significant new tariffs, and President Trump has directed various federal agencies to evaluate key aspects of U.S. trade policy further. There have been and are ongoing discussions and commentaries regarding potential significant changes to U.S. trade policies, treaties and tariffs. There exists significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. We source important elements used in our products from China. We have significant sales in jurisdictions outside the United States. Any of these factors could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on our business, financial condition and results of operations.
We are subject to risks related to international operations and geopolitical conditions
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The Company generates a meaningful portion of its revenue from international markets through a global distribution network spanning more than 30 countries. International operations are subject to risks including economic instability, regulatory changes, supply chain disruptions, and geopolitical events. For example, ongoing geopolitical tensions, including conflicts in Eastern Europe and the Middle East, have disrupted certain markets served by the Company’s international distributors and may adversely impact demand, distribution, and revenue in affected regions. Continued or escalating geopolitical instability could further negatively impact the Company’s international sales.
Our business is subject to significant risks arising from our dual exposure to China as both a manufacturing source and a sales market.
The Company relies on Chinese third-party manufacturers for a substantial portion of its products and also previously generated revenue from Chinese distributors. During the three months ended September 30, 2026, revenue from China increased to approximately $500,000, compared to $310,000 in the prior period. Simultaneously, escalating U.S.-China trade tensions and newly imposed tariffs have increased the cost of sourcing products and components from China. This dual exposure - increased revenue from Chinese customers and increased costs from Chinese suppliers - may materially and adversely affect our results of operations. Furthermore, regulatory actions by either the U.S. or Chinese government, including export controls, retaliatory trade measures, restrictions on technology transfer, or sanctions, could further disrupt our supply chain or eliminate our ability to sell into the Chinese market entirely. Any such developments could have a material adverse effect on our business, financial condition, and results of operations.
Our operating results may fluctuate due to changes in product mix and demand
The Company’s results of operations may fluctuate from period to period due to changes in product mix, including variations between instrument and handpiece sales, as well as geographic demand. Shifts in product mix, pricing, or customer purchasing patterns may impact on gross margins and overall profitability.
Our common stock may be delisted from NYSE American if we fail to regain compliance with continued listing standards by April 8, 2027.
Our common stock is listed on NYSE American under the symbol “MLSS.” On October 8, 2025, the Company received a written notice from NYSE American stating that it is not in compliance with the continued listing standards set forth in Sections 1003(a)(ii) and 1003(a)(iii) of the NYSE American Company Guide, which require minimum stockholders’ equity of $4 million and $6 million, respectively, for companies with sustained operating losses in certain of its fiscal years. As of September 30, 2026, the Company’s reported total stockholders’ equity was approximately $3.7 million and the Company has reported net losses in each of the relevant fiscal years below both the NYSE American thresholds.
To maintain its listing, the Company submitted a plan of compliance outlining the actions it has taken or will take to regain compliance. 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.
Any such de-listing of our common stock would have an adverse impact on the value of and trading activity in our common stock. If the Company is able to continue its listing, it will be subject to periodic reviews by the NYSE American.
We expect we will need additional financing following to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all.
As of September 30, 2026, we had total working capital of approximately $3.5 million. 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 de-listed by the NYSE American and unable to further pursue our business plan and we may be unable to continue operations.
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Item 2. Unregistered Sales of Equity Securities and use of proceeds
As previously disclosed pursuant Form 8-K filed by the Company on April 21, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with the purchasers named therein, for the private placement (the “Private Placement”) of an aggregate of 7,962,963 units (the “Units”), with each Unit consisting of (i) one share of the Company’s common stock and (ii) one warrant to purchase one share of Common Stock (each, a “Warrant”). The purchase price paid by the purchasers for each Unit was $0.27.
Each Warrant has an exercise price equal to 125% of the Per Unit Purchase Price per share, or $0.3375 per warrant share, and will be exercisable prior to the third anniversary of the closing for cash only.
The gross proceeds for the Private Placement were $2,150,000 (comprised of $1,799,000 in cash and $351,000 in respect of the conversion of a portion of Convertible Notes by certain directors of the Company), before deducting fees and expenses, and up to an additional $2,687,500 in gross proceeds if the Warrants are fully exercised. The Private Placement closed on April 20, 2026. The Private Placement was conducted in accordance with Rule 506(b) of Regulation D solely with respect to “accredited investors”, as determined in accordance with representations of the purchasers in the purchase documentation, and applicable NYSE American rules.
The Company expects to use the net proceeds from the Private Placement for general working capital purposes and payment of past due accounts payable. The securities were offered directly by the Company without a placement agent, and therefore no placement or underwriting discounts, commissions or other fees have been or will be paid.
Item 3. Default upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosure
Not applicable.
Item 5. Other Information
Not applicable.
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Item 6. Exhibits and Financial Statement Schedules
| Exhibit No | Description | |
| 3.1 | Restated Certificate of Incorporation of Milestone, as amended as of August 5, 2026 (incorporated by reference to Exhibit 3.1 to the Form 10-Q filed August 13, 2026) | |
| 4.1 | Form of Warrant (incorporated by reference to Exhibit 4.1 to the Form 8-K filed April 21, 2026) | |
| 10.1 | Form of Securities Purchase Agreement, dated April 20, 2026 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed April 21, 2026) | |
| 10.2 | Form of Registration Rights Agreement, dated April 20, 2026 (incorporated by reference to Exhibit 10.2 to the Form 8-K filed April 21, 2026) | |
| 10.3 | Form of Lock-up Agreement for directors, officers, and certain stockholders (incorporated by reference to Exhibit 10.3 to the Form 8-K filed April 21, 2026) | |
| 10.4 | Form of Amended and Restated Note, dated April 20, 2026 (incorporated by reference to Exhibit 10.4 to the Form 8-K filed April 21, 2026) | |
| 10.5 | Form of Omnibus Signature Page to Securities Purchase Agreement (incorporated by reference to Exhibit 10.5 to the Form 8-K filed April 21, 2026) | |
| 10.6 | Amendment to Amended and Restated Memorandum of Understanding, by and between Innovest S.p.A. and Milestone Scientific Inc., dated March 31, 2026.) (incorporated by reference to Exhibit 10.1 to the Form 8-K filed April 2, 2026) | |
| 10.7 | Agreement With respect to Compensation and Other Arrangements, by and between Milestone Scientific Inc., Leonard Osser and U.S. Asian Consulting Group, LLC dated (incorporated by reference as of April 1, 2026.) (incorporated by reference to Exhibit 10.1 to the Form 8-K filed June 25, 2026) | |
| 10.8 | Form of Lock-Up Agreements by Leonard Osser and Marilyn Elson in favor of Milestone Scientific Inc. (incorporated by reference to Exhibit 10.2 to the Form 8K filed June 25, 2026) | |
| 10.9 | Executive Chairman Agreement between the Company and Benedetta Casamento, (incorporated by reference to Exhibit 10.3 to the Form 8-K filed June 25, 2026) | |
| 10.10 | Form of Option Exchange and Surrender Agreement; Form of Notice of Stock Option Grant; Stock Option Agreement (for Repriced Options); 2026 Performance Incentive Sub-Plan to the Amended and Restated 2020 Equity Incentive Plan; Form of Award Agreement under 2026 Performance Incentive Sub-Plan (incorporated by reference to Exhibits 10.1-10.4 to the Form 8-K filed May 6, 2026 | |
| 31.1 | Principal Executive Officer Certification required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |
| 31.2 | Principal Financial Officer Certification required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |
| 32.1 | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* | |
| 101.INS | Inline XBRL Instance Document* | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document* | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document* | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document* | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| * | Filed herewith. |
| ** | Furnished herewith and not filed, in accordance with item 601(32) (ii) of Regulation S-K. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MILESTONE SCIENTIFIC INC. | |
| /s/ Eric Hines | |
| Eric Hines | |
| Chief Executive Officer | |
| (Principal Executive Officer) | |
| /s/ Keisha Harcum | |
| Keisha Harcum | |
| Vice President of Finance and Acting Chief Accounting Officer (Principal Financial and Accounting Officer) | |
| Date: November 13, 2026 |
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