Milestone Scientific (NYSE: MLSS) grows revenue 22% but flags going concern risk
Milestone Scientific Inc. reported higher sales but continued losses for the three and six months ended June 30, 2026. Net product sales were $2.84 million for the quarter and $5.00 million year-to-date, up from $2.32 million and $4.56 million in 2025, driven mainly by Dental segment growth and renewed sales into China, plus early-stage growth in Medical CompuFlo® epidural systems.
Gross profit rose to $1.91 million for the quarter and $3.47 million for six months, with gross margin of about 67.2%, slightly below the prior year due to mix and higher product costs, including tariffs. Operating expenses declined to $5.36 million for six months from $6.75 million, reflecting lower regulatory, consulting and R&D spend, partially offset by higher stock-based compensation, royalties and marketing.
The company recorded a six‑month net loss of $1.90 million, improved from a $3.48 million loss a year earlier, but has an accumulated deficit of $135.7 million. Cash and cash equivalents were $2.07 million and working capital about $3.7 million at June 30, 2026. A $1.81 million April 2026 private placement and related warrants strengthened liquidity, yet management states that recurring losses, negative operating cash flows and limited cash raise substantial doubt about the ability to continue as a going concern without additional revenue growth or financing.
Positive
- Net product sales grew 22.3% year over year for the quarter to $2.84 million, with Dental revenue up $443,272 and Medical revenue up $74,300, reflecting renewed China sales and early adoption of CompuFlo® in pain management.
- Six‑month net loss improved to $1.90 million from $3.48 million, as total operating expenses fell to $5.36 million from $6.75 million while gross profit increased to $3.47 million.
- Liquidity was bolstered by an April 2026 private placement raising approximately $1.81 million and issuing 7,962,963 warrants that could provide up to $2.69 million in additional gross proceeds if fully exercised.
Negative
- Management discloses substantial doubt about the company’s ability to continue as a going concern, citing cumulative losses of $135.7 million, ongoing operating losses and reliance on additional funding.
- Cash remains limited at $2.07 million with six‑month operating cash outflows of about $498,000, leaving the business dependent on further revenue growth or external financing.
- Slow adoption of medical products has required an allowance on slow‑moving Medical finished goods of approximately $504,000, following prior inventory write‑downs and disposals.
- The company notes risk that failure to regain compliance with NYSE American listing requirements, including minimum stockholders’ equity, could result in delisting, reduced liquidity and constrained capital access.
Filing Explained
July 27 approvals expanded potential equity issuance capacity, while July 24 note conversions and April warrants remain conditional rather than completed share issuance.
This unaudited Form 10-Q reports the quarter ended
The April 20 private placement is completed: each unit included one common share and one warrant, with the warrants exercisable for cash after six months and before the third anniversary, so the warrant shares represent contingent issuance rather than shares already issued. The company also exchanged 4,000,000 executive options with exercise prices of
After quarter-end, stockholders approved increasing authorized common shares from 125,000,000 to 135,000,000 and expanding the equity-plan reserve from 11,500,000 to 28,750,000; these approvals expand possible issuance capacity, not completed issuance. On
Key Figures
Key Terms
going concern financial
Dynamic Pressure Sensing Technology medical
private placement financial
right of use assets financial
Convertible Notes financial
E-Commerce platform market
Earnings Snapshot
FAQ
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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 August 11, 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 June 30, 2026 (Unaudited) and December 31, 2025 | 4 | |
| Statements of Operations for the three and six months ended June 30, 2026, and 2025 (Unaudited) | 5 | |
| Statements of Changes in Stockholders’ Equity for the six months ended June 30, 2026 and 2025 (Unaudited) | 6 | |
| Statements of Cash Flows for the three and six months ended June 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 | 24 |
| Item 4. | Controls and Procedures | 25 |
| PART II—OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 25 |
| Item 1A. | Risk Factors | 25 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 28 |
| Item 3. | Defaults Upon Senior Securities | 28 |
| Item 4. | Mine Safety Disclosures | 28 |
| Item 5. | Other Information | 28 |
| Item 6. | Exhibits | 28 |
| Signatures | 29 | |
| 2 |
FORWARD-LOOKING STATEMENTS
When used in this Quarterly Report on Form 10-Q, the words “may”, “will”, “should”, “expect”, “believe”, “anticipate”, “continue”, “estimate”, “project”, “intend” and similar expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) regarding events, conditions and financial trends that may affect Milestone Scientific’s plans of operations, business strategy, results of operations and financial condition. Milestone Scientific wishes to ensure that such statements are accompanied by meaningful cautionary statements pursuant to the safe harbor established in the Private Securities Litigation Reform Act of 1995. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Milestone Scientific’s plans and objectives are based, in part, on assumptions involving the continued expansion of its business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Milestone Scientific. Although Milestone Scientific believes that its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate. Considering the significant uncertainties inherent in the forward-looking statements included herein, our history of operating losses that are expected to continue, requiring additional funding which we may be unable to raise when needed (which may force us to delay, curtail or eliminate commercialization efforts of our CompuFlo Epidural Computer Controlled Anesthesia System), the early stage operations of and relative lack of acceptance of our medical products, including our inability to recover our investment in slow-moving Medical finished goods inventory, relying exclusively on two third parties to manufacture our products, changes to our distribution arrangements exposes us to risks of interruption of marketing efforts and building new marketing channels, changes in our informal manufacturing arrangements made by the manufacturer of our products and disruptions at the manufacturing facility of our manufacturers, including shortages of or delays in obtaining chips and other components, exposes us to risks that may harm our business, raising additional funds by issuing securities or through licensing or lending arrangements may cause dilution to our existing stockholders, restrict our operations or require us to relinquish proprietary rights, our ability to generate revenue from sales will be materially impaired if physicians do not accept nor use our CompuFlo Epidural Computer Controlled Anesthesia System, exposure to the risks inherent in international sales and operations, including the cessation of revenue from China and the risk that U.S.-China trade tensions and tariffs may simultaneously increase our input costs and eliminate our ability to sell into the Chinese market, several legislative and regulatory changes and proposed changes regarding the healthcare system, including changes to reimbursement coverage of our products, that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect our ability to profitably sell any product candidates for which we obtain marketing approval, developments by competitors may render our products or technologies obsolete or non-competitive, changes in United States policy regarding international trade, including the imposition of tariff and export controls on certain goods and products imported from China and other countries, which has resulted in retaliatory tariffs and other trade measures by China, the United States and other countries that will result in an increase in costs that we may not be able to offset or that otherwise adversely impact our results of operations, federal government actions that constrain collaborative research funding may reduce the pool of available research partners and increase the cost and difficulty of future product development efforts, our failure to regain compliance with the strict listing requirements of NYSE American, including the minimum stockholders’ equity requirement, may subject us to delisting and, if our stock were no longer listed on NYSE American, our stock price may decline, the liquidity of our securities likely would be impaired and our ability to raise additional capital may be limited, and ongoing geopolitical tensions, including conflicts in Eastern Europe and the Middle East, that have disrupted certain international markets served by the Company’s distributors and may continue to adversely impact demand and revenue, the inclusion of such information should not be regarded as a representation by Milestone Scientific or any other person that the objectives and plans of Milestone Scientific will be achieved. Prospective investors are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. The actual results may differ materially from those included within the forward-looking statements because of various factors. Except as required by the federal securities laws, Milestone Scientific undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise, to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. Milestone Scientific is the owner of the following registered U.S. trademarks: CompuDent®; CompuMed®; CompuFlo®; DPS Dynamic Pressure Sensing technology®; Milestone Scientific ®; CathCheck®; the Milestone logo ®; SafetyWand®; STA Single Tooth Anesthesia Device®; and The Wand ®.
| 3 |
Part I- Financial Information
Item 1. Financial Statements
MILESTONE SCIENTIFIC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| June 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 | ||||||||
| Other Current Liabilities | - | |||||||
| 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 Ended | Three Months Ended | Six Months Ended | Six Months Ended | |||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 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 SIX MONTHS ENDED JUNE 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 | ||||||||||||||||||||||||
| 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 consultant 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 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| 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 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
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 SIX MONTHS ENDED
(UNAUDITED)
| June 30, 2026 | June 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 | ||||||||
| Bad debt expense | ||||||||
| Amortization of right-of-use asset | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Increase in accounts receivable | ( | ) | ( | ) | ||||
| Decrease (increase) in accounts receivable, related party | ( | ) | ||||||
| Increase in Other Receivable | ( | ) | - | |||||
| Decrease in inventories | ( | ) | ||||||
| Decrease in advances on contracts | ||||||||
| Increase in prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Increase in accounts payable | ||||||||
| Decrease (increase) in accounts payable, related party | ( | ) | ||||||
| Decrease in accrued expenses | ( | ) | ( | ) | ||||
| Increase (decrease) in accrued expenses, related party | ( | ) | ||||||
| Increase in other liabilities | - | |||||||
| Decrease operating right of use lease asset | ( | ) | ( | ) | ||||
| 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 the Private Placement | $ | $ | - | |||||
| Proceeds from convertible notes payable | - | |||||||
| Payments of equity issuance costs | ( | ) | - | |||||
| Payments finance lease obligations | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | $ | $ | ||||||
| Net increase (decrease) in cash and cash equivalents | $ | $ | ( | ) | ||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
Six Months Ended June 30, 2026 | Six Months Ended June 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
All references in this report to “Milestone Scientific,” “us,” “our,” “we,” the “Company” or “Milestone” refer to Milestone Scientific Inc., and its consolidated subsidiaries, Wand Dental, Inc., and Milestone Innovations Inc. and Milestone Education LLC (all described below), unless the context otherwise indicates. Milestone Scientific is the owner of the following registered U.S. trademarks: CompuDent®; CompuMed®; CompuFlo®; DPS Dynamic Pressure Sensing technology®; Milestone Scientific ®; the Milestone logo ®; SafetyWand®; STA Single Tooth Anesthesia System®; and The Wand ®.
Milestone Scientific is a biomedical technology company that patents, designs, develops and commercializes innovative diagnostic and therapeutic injection technologies and devices for medical and dental use. Since our inception, we have engaged in pioneering proprietary, innovative, computer-controlled injection technologies, and solutions for the medical and dental markets. We believe our technologies are proven and well established.
We have focused our resources on redefining the worldwide standard of care for injection techniques by making the experience more comfortable for the patient by reducing the anxiety and stress of receiving injections from the healthcare provider. Our computer-controlled injection devices make injections precise, efficient, and virtually painless.
Milestone Scientific has 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. In particular, the technology has specific medical applications in epidural procedures, where dynamic pressure sensing can assist healthcare practitioners in identifying the epidural space. DPS serves as Milestone Scientific’s core technology platform and provides the foundation for the development of next-generation drug delivery and injection devices.
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. The dental devices currently are sold in the United States, Canada and in over 33 other countries. Milestone Scientific also has 510(k) marketing clearance from the U.S. Food and Drug Administration (FDA) on the CompuFlo® Epidural Computer Controlled Anesthesia System in the lumbar, thoracic and cervical thoracic junction of the spine region. In addition, Milestone Scientific has obtained CE mark approval and can be marketed and sold in most European countries.
Our recent receipt of technology-specific CPT Code for the Company’s technology by the American Medical Association marks an important milestone that could increase the potential number of anesthesia pain management clinics adopting the CompuFlo instrument. A CPT code expands the potential for reimbursement of epidural procedures in pain management utilizing the CompuFlo Epidural System., which we believe should help accelerate the commercial roll-out of CompuFlo in the United States.
NOTE 2 — GOING CONCERN AND LIQUIDITY
Our financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company on a going concern basis. The going concern basis assumes that assets are realized, and liabilities are extinguished in the ordinary course of business at amounts disclosed in the financial statements.
The
Company has incurred total losses since its inception of $
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 $
The Company’s recurring losses from operations, negative cash flows, and accumulated deficit raise substantial doubt about its ability to continue as a going concern. The completion of the private placement in April 2026 has improved the Company’s liquidity position; however, the Company’s ability to continue as a going concern is dependent upon its ability to generate sufficient revenue, manage operating expenses, and, if necessary, obtain additional financing.
| 8 |
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. Basic and Diluted Net Loss Per Common Share
Milestone
Scientific presents “basic” earnings (loss) per common share and, if applicable, “diluted” earnings (loss)
per common share applicable to common stockholders pursuant to the provisions of ASC 260, “Earnings per Share”. Basic
earnings (loss) per common share is calculated by dividing net income or loss applicable to common stockholders by the weighted
average number of common shares outstanding and to be issued common shares as follows:
3. 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.
4. Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”).
The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. Management concluded that its warrants qualify for equity accounting treatment.
| 9 |
NOTE 4 — INVENTORIES, NET
Inventories consist of the following:
SCHEDULE OF INVENTORIES
| June 30, 2026 | December 31, 2025 | |||||||
| Dental finished goods | $ | $ | ||||||
| Medical finished goods | ||||||||
| Inventory finished goods | ||||||||
| Component parts and other materials | ||||||||
| Total inventories | $ | $ | ||||||
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 June 30, 2026 and December 31, 2025, is approximately $
NOTE 6— STOCKHOLDERS’ EQUITY
WARRANTS
On
April 20, 2026, Company entered into a securities purchase agreement (the “Purchase
Agreement”) with the purchasers named therein (the “Purchasers”), for the private placement (the “Private Placement”)
of an aggregate of
Each
Warrant has an exercise price equal to
The following table summarizes information about Warrants for the six month periods ending June 30, 2026.
SCHEDULE OF INFORMATION ABOUT SHARES ISSUABLE UNDER WARRANTS OUTSTANDING
Number of Warrants | Weighted Averaged Exercise Price $ | Weighted Average Remaining Life | Aggregate Intrinsic Options Value $ | |||||||||||||
| Warrants outstanding at January 1, 2026 | - | - | - | - | ||||||||||||
| Granted during 2026 | $ | - | ||||||||||||||
| Warrants outstanding June 30, 2026 | $ | - | ||||||||||||||
| 10 |
SHARES TO BE ISSUED
As
of June 30, 2026, and 2025, there were
As
of June 30, 2026 and 2025 there were
The following table summarizes information about shares to be issued for the six month periods ending June 30, 2026 and 2025.
SCHEDULE OF SHARES TO BE ISSUED
| June 30, 2026 | June 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 June 30, 2026 and 2025, respectively | ||||||||
| Shares-to be issued outstanding ending balance | ||||||||
NOTE 7 — STOCK OPTION PLANS
The
Milestone Scientific Inc., Amended and Restated 2020 Equity Incentive Plan (the “2020 Plan”) provides for awards of
restricted common stock, restricted stock units, options to purchase shares and other awards. At June 30, 2026, the maximum number
of shares that could be issued thereunder was
Additionally on April 30, 2026, the Compensation Committee recommended the grant of performance-based restricted
stock units (“PRSUs”) to certain officers of the Company. As all of the PRSUs are to have the same performance milestones
and other terms and conditions (other than the actual grant amounts), the Compensation Committee established a sub-plan of the 2020 Plan
(the “Sub-Plan”) as the framework together with the 2020 Plan for the award of PRSUs (each, an “Award” and collectively,
“Awards”), with a fixed pool of PRSUs. The total aggregate number of shares of common stock that to be issued under 2020 Plan
will be adjusted 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
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 six months
ended June 30, 2026, Milestone Scientific recognized approximately $
As
of June 30,2026, there was approximately $
A summary of option activity for employees under the plans and changes during the six months ended June 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) | - | - | ||||||||||||||
| Forfeited or expired during 2026(1) | ( | ) | - | - | ||||||||||||
| Options outstanding June 30, 2026 | ||||||||||||||||
| Exercisable, June 30, 2026 | ||||||||||||||||
| (1) |
| 11 |
A summary of option activity for non-employees under the plans and changes during the six months ended June 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 | - | |||||||||||||||
| Forfeited or expired during 2026 | ( | ) | - | - | ||||||||||||
| Options outstanding June 30, 2026 | - | |||||||||||||||
| Exercisable, June 30, 2026 | - | |||||||||||||||
For the three and six months ended June 30, 2026 Milestone Scientific recognized
approximately $
A summary of restricted stock under the plans and changes during the six months ended June 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 | ( | ) | ||||||
| Non-vested as June 30, 2026 | ||||||||
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 June 30, 2026 and 2025, the Company recognized approximately $
As of June 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.
| 12 |
The following tables present information about our reportable and operating segments for the three and six months ended June 30, 2026, and 2025:
SCHEDULE OF REPORTABLE AND OPERATING SEGMENTS
| Corporate | Dental | Medical | Total | |||||||||||||
| Three Months ended June 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) | ( | ) | ( | ) | ( | ) | ||||||||||
| Corporate | Dental | Medical | Total | |||||||||||||
| Three Months ended June 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) | ( | ) | ( | ) | ( | ) | ||||||||||
| 13 |
| Corporate | Dental | Medical | Total | |||||||||||||
| Six Months ended June 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) | ( | ) | ( | ) | ( | ) | ||||||||||
| Corporate | Dental | Medical | Total | |||||||||||||
| Six Months ended June 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) | ( | ) | ( | ) | ( | ) | ||||||||||
| June 30, 2026 | ||||||||||||||||
| Dental | Medical | Corporate | Total | |||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
| December 31, 2025 | ||||||||||||||||
| Dental | Medical | Corporate | Total | |||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
| 14 |
NOTE 10 – CONCENTRATIONS
Milestone Scientific has informal arrangements with third-party U.S. manufacturers of the STA devices and epidural instruments pursuant to which they manufacture these products under specific purchase orders that contain advance payments for long lead items for production. Advances on contracts have been classified as current at June 30, 2026 and December 31, 2025. The termination of the manufacturing relationship with any of these manufacturers could have a material adverse effect on Milestone Scientific’s ability to produce and sell its products. Although alternate sources of supply exist, and new manufacturing relationships could be established, Milestone Scientific would need to recover its existing tools or have new tools produced. Establishment of new manufacturing relationships could involve significant expense and delay. Any curtailment or interruption of the supply, because of the termination of such a relationship, would have a material adverse effect on Milestone Scientific’s financial condition, business, and results of operations.
On
January 3, 2023, the Company launched an E-Commerce platform selling and shipping STA instruments and handpieces
directly to dental offices and dental groups within the U.S. For the three months ended June 30, 2026, E-Commerce accounted for
The
Company had
As
of June 30, 2026, the Company had
NOTE 11 — RELATED PARTY TRANSACTIONS
United Systems
In June 2021, the Company entered into a ten-year supply agreement with United Systems, the principal supplier of
its handpieces. United Systems is considered a related party because its controlling shareholder, Tom Cheng, is also a stockholder of
the Company. Under the agreement, the Company procures products pursuant to individual purchase orders and has no minimum purchase commitments. Purchases from this supplier were approximately $
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 Company products embodying technology covered by patents purchased by the Company from the Director of Clinical Affairs, including U.S. Patent No. 7,625,354, relating to the Company’s computer-controlled local anesthetic delivery system and associated handpiece, and U.S. Patent No. 7,618,409, relating to methods of administering an anesthetic using the system and handpiece.
Royalty fee
attributable to the Director of Clinical Affairs was approximately $
In
addition, consulting expense attributable to the Director of Clinical Affairs was approximately $
Under such 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 options granted upon the achievement of such patent-related milestones are measured and recognized as stock-based compensation expense in accordance with the applicable accounting guidance and the terms of the related award agreement.
As
of June 30, 2026 and December 31, 2025, had recorded accrued but unpaid royalties owed to the Director of Clinical Affairs of
approximately $
| 15 |
Directors
Leonard Osser
On April 6, 2021, Leonard Osser entered into a succession agreement with the Company and U.S. Asian Consulting Group, LLC (“U.S. Asian”), a company of which Mr. Osser is a principal and, together with his wife, the sole members (the “Succession Agreement”). The Succession Agreement restructured certain compensation arrangements under Mr. Osser’s July 2017 employment agreement with the Company (the “Osser Employment Agreement”) and U.S. Asian’s July 2017 consulting agreement with the Company (the “Osser Consulting Agreement”).
Under
the Succession Agreement, annual compensation under the Osser Employment Agreement was reduced by $
On
May 19, 2021, Mr. Osser stepped down as Interim Chief Executive Officer and assumed the role of Vice Chairman of the Board. In connection
with his appointment as Vice Chairman and his continuing consulting services, Mr. Osser was granted options to purchase
Mr. Osser resigned from the Company’s Board of Directors effective November 7, 2025.
New Osser Agreement
On June 19, 2026, the Company entered into a new agreement with Mr. Osser and U.S. Asian, effective as of April 1, 2026 (the “New Osser Agreement”). The New Osser Agreement amended the Osser Employment Agreement, the Osser Consulting Agreement and the Succession Agreement.
With respect to periods before April 1, 2026, the New Osser Agreement provides that the Osser Consulting Agreement and the portions of the Succession Agreement relating to the Osser Consulting Agreement were canceled and terminated. As a result, the Company has no further obligation to make payments or provide benefits under those arrangements, whether in cash or shares.
Mr. Osser also waived compensation and other amounts and benefits owed under the Osser Employment Agreement, subject to and conditioned upon the Company’s:
| ● | payment
of an aggregate of $ | |
| ● | payment
of $ | |
| ● | reimbursement of certain China-related travel and other expenses. |
Shares
having a value of $
Effective
April 1, 2026, under the New Osser Agreement, Mr. Osser’s position was changed to Advisor to the Chief Executive Officer.
The modified Osser Employment Agreement continues through July 17, 2027. During this period, Mr. Osser is entitled to annual
cash compensation of $
If the Company terminates Mr. Osser’s employment without cause, other than due to death or disability, if Mr. Osser terminates his employment for good reason, or if the Company fails to make a required payment within 30 days after its scheduled payment date, Mr. Osser is entitled to receive any amounts accrued through the termination or default date. He is also entitled to a lump-sum payment equal to the unpaid base salary, car allowance and healthcare payments that otherwise would have been payable through July 10, 2027. These amounts are payable in lieu of any termination-related payments under the prior Osser agreements.
For
the three and six months ended June 30, 2026, the Company recorded $
For
the three and six months ended June 30, 2026, the Company recorded $
Mr.
Osser and his wife also entered into lock-up agreements restricting the transfer of their shares of the Company’s common stock
through April 20, 2027. The lock-up agreements do not restrict the transfer of
Beneficial Ownership
As
of June 30, 2026, Mr. Osser beneficially owned
The
previously disclosed statement that Mr. Osser was entitled to receive an additional
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 $
| 16 |
Arjan J. Haverhals, Director
The
Company entered into a consulting agreement with Jan Adriaan (Arjan) Haverhals (the “Haverhals Consulting Agreement”), effective
January 1, 2025. The Haverhals Consulting Agreement continues for an indefinite term unless terminated in accordance with its terms.
Either party may terminate the Haverhals Consulting Agreement upon 90 days’ prior written notice. The Company may terminate the
Haverhals Consulting Agreement upon 30 days’ prior written notice in the event of Mr. Haverhals’ inability to provide services.
Under the Haverhals Consulting Agreement, Mr. Haverhals is entitled to receive consulting fees at an annual rate of $
| ● | $ | |
| ● | $ |
The
Company recorded consulting expense of approximately $
Mr. Haverhals is entitled to reimbursement of reasonable expenses incurred in connection with the performance of his services. He serves as an independent contractor and is not eligible for Company-provided employee benefits, including health or accident insurance, life insurance, paid sick leave, or paid vacation. In connection with the Haverhals Consulting Agreement, Mr. Haverhals entered into the Company’s standard form of non-disclosure, non-solicitation, non-competition, and invention assignment agreement.
As
of June 30, 2026, and December 31, 2025, the Company owed Mr. Haverhals approximately $
Pursuant
to the Haverhals Consulting Agreement, Mr. Haverhals is entitled to receive
At the Company’s Annual Meeting of Stockholders held on December 18, 2025, Mr. Haverhals was not re-elected to the Board of Directors, and his term as a director expired at the conclusion of the Annual Meeting.
April 2025 Convertible Notes
On
April 9, 2025, the Company issued a series of promissory notes in the aggregate amount of $
On
April 20, 2026, the Company completed the Private Placement of
On
July 24, 2026, the Company received notices of conversion (the “Conversion Notices”) from Benedetta Casamento, Dr. Didier
Demesmin and Neal Goldman, each of whom is a director of the Company (collectively, the “Holders”), with respect to the Company’s
amended and restated Convertible Notes. The Conversion Notices constitute the Holders’ elections, pursuant to Section 5(a) of the
Convertible Bridge 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 $
| 17 |
BP4 S.r.l. / Innovest S.p.A.
BP4
S.r.l. / Innovest S.p.A.\n\nBP4 S.r.l. (“BP4”) is a significant shareholder of the Company, beneficially owning approximately
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.
Bendetta Casamento-Executive Chairman.
On June 24, 2026, the Board, with Benedetta Casamento not in attendance, determined, in view of
the increased role played, and to continue to be played, by Ms. Casamento in the business and affairs of the Company, to approve the recommendation
of the Compensation Committee, electing Ms. Casamento as Executive Chairman. Prior to becoming Executive Chairman, Ms. Casamento has been
the Chairman of the Board of the Company as an independent director, devoting substantial time and effort to the Company. As Executive
Chairman, she is expected to enhance executive leadership, strategic oversight, investor engagement, and corporate development support
for the Company. Her duties and responsibilities as Executive Chairman include, without limitation, working collaboratively with the Chief
Executive Officer and senior management to establish and execute the Company’s strategic objectives, supporting corporate development
initiatives, including strategic partnerships, acquisitions, licensing opportunities, and commercial growth initiatives, assisting with
investor relations activities, capital markets initiatives, financing transactions, and communications with current and prospective investors,
and advising management on operational, financial, regulatory, and governance matters affecting the Company. For her services as Executive
Chairman, the Company has agreed to pay her,
On June 24, 2026, Ms. Casamento and the Company entered into an employment letter agreement with respect to her status as Executive Chairman. The foregoing description of the material terms of such letter agreement does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which, previously filed with the Company’s Form 8-K, is an as Exhibit hereto.
NOTE 12 — COMMITMENTS
(1) Contract Manufacturing Agreement
Milestone
Scientific has informal arrangements with third-party manufacturers of the STA devices and epidural instruments pursuant to which they
manufacture these products under specific purchase orders but without any long-term contract or minimum purchase commitment. The Company
has a purchase commitment for the delivery of
The
advances in contracts represent funding for future epidural instruments and epidural replacement parts. As of June 30, 2026 and December
31, 2025, the Company also has advances on an open purchase order for long lead items for a future purchase order for the manufacturing
of Epidural instruments of approximately $
(2) Operating Leases
The Company identified and assessed the following significant assumptions in recognizing its right-of-use assets and corresponding lease liabilities:
| ● | As the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in calculating the present value of the lease payments. The Company has utilized its incremental borrowing rate based on the long-term borrowing costs of comparable companies in the Medical Device industry. | |
| ● | Since the Company elected to account for each lease component and its associated non-lease components as a single combined lease component, all contract consideration was allocated to the combined lease component. | |
| ● | The expected lease terms include non-cancellable lease periods. Renewal option periods are not included in the determination of the lease terms as they were not reasonably certain to be exercised. |
The components of lease expense were as follows:
SCHEDULE OF COMPONENTS OF LEASE EXPENSE
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Three months ended | Six months ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Cash paid for operating lease liabilities | $ | $ | $ | $ | ||||||||||||
| Cash paid for finance lease liabilities | ||||||||||||||||
| Weighted Average Remaining Lease Term | ||||||||||||||||
| Finance leases (years) | | | ||||||||||||||
| Operating leases (years) | | | ||||||||||||||
| Weighted-average discount rate – operating leases | % | % | ||||||||||||||
| Weighted-average discount rate – finance leases | % | % | ||||||||||||||
NOTE 13 — SUBSEQUENT EVENT
On July 27, 2026, the Company held its 2026 Annual Meeting of Stockholders. At the Annual Meeting, the Company’s stockholders:
| ● | Elected Benedetta Casamento, Neal Goldman, Eric Hines, Dr. Didier Demesmin and Dr. Dawood Sayed to serve as directors until the Company’s 2027 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified; | |
| ● | Approved
an amendment to the Company’s Restated Certificate of Incorporation to increase the
number of authorized shares of common stock from | |
| ● | Approved
an amendment to the Company’s Amended and Restated 2020 Equity Incentive Plan to increase
the number of shares of common stock reserved and available for issuance under the plan from
| |
| ● | Approved, on a non-binding advisory basis, the compensation of the Company’s named executive officers; and | |
| ● | Ratified the appointment of Grassi & Co., CPAs, P.C. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2026. |
On July 29, 2026, the Board of Directors:
| ● | Re-elected each of Kelly Ulto and Greg Shilling to serve as a director of the Company, effective July 27, 2026, until the Company’s 2027 annual meeting of stockholders (the “2027 Annual Meeting”) or until their respective successor is duly elected and qualified, or such director’s earlier resignation or removal | |
| ● | Reaffirmed its determination that each of Ms. Ulto and Mr. Shilling is independent under the applicable NYSE American listing standards; | |
| ● | Reaffirmed its determination that Ms. Ulto qualifies as an “audit committee financial expert,” as defined in Item 407(d)(5) of Regulation S-K as well as Rule 10A-3 under the Securities Exchange Act of 1934, as applicable; | |
| ● | Appointed Ms. Ulto as Chair of the Audit Committee and as a member of the Compensation Committee and the Nominating and Corporate Governance Committee; and | |
| ● | Appointed Mr. Shilling as Chair of the Compensation Committee and as a member of the Audit Committee and the Nominating and Corporate Governance Committee. |
These events occurred subsequent to June 30, 2026 and did not require adjustment to the Company’s unaudited condensed consolidated financial statements.
| 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 Inc. is a biomedical technology company that designs, develops, patents, and commercializes innovative diagnostic and therapeutic injection technologies for medical and dental applications. The Company’s common stock trades on the NYSE American under the symbol “MLSS.”
The Company’s proprietary Dynamic Pressure Sensing Technology® (DPS) platform is a computer-controlled system designed to improve the precision, efficiency, and patient comfort of injections by regulating flow rate and monitoring pressure at the needle tip in real time.
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. |
The Company continues to focus on expanding adoption of its DPS technology platform, advancing commercialization of its Medical segment, and maintaining disciplined cost management while supporting targeted growth initiatives.
The following table shows a breakdown of Milestone Scientific’s product sales (net), domestically and internationally, by business segment, product category:
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | |||||||||||||||||||||||
| Dental | Medical | Grand Total | Dental | Medical | Grand Total | |||||||||||||||||||
| Domestic-US | ||||||||||||||||||||||||
| Instruments | $ | 183,290 | $ | - | $ | 183,290 | $ | 183,190 | $ | 2,000 | $ | 185,190 | ||||||||||||
| Handpieces | $ | 1,047,625 | $ | 104,400 | $ | 1,152,025 | 1,085,047 | 30,100 | 1,115,147 | |||||||||||||||
| Other | $ | 22,122 | $ | - | $ | 22,122 | 10,029 | - | 10,029 | |||||||||||||||
| Grand Total | $ | 1,253,037 | $ | 104,400 | $ | 1,357,437 | $ | 1,278,266 | $ | 32,100 | $ | 1,310,366 | ||||||||||||
| International Rest of World | ||||||||||||||||||||||||
| Instruments | $ | 252,458 | $ | - | $ | 252,458 | $ | 269,871 | $ | - | $ | 269,871 | ||||||||||||
| Handpieces | $ | 723,184 | $ | 2,000 | $ | 725,184 | 732,218 | - | 732,218 | |||||||||||||||
| Other | $ | 7,739 | $ | - | $ | 7,739 | 11,011 | - | 11,011 | |||||||||||||||
| Grand Total | $ | 983,381 | $ | 2,000 | $ | 985,381 | $ | 1,013,100 | $ | - | $ | 1,013,100 | ||||||||||||
| International China | ||||||||||||||||||||||||
| Instruments | $ | 294,000 | $ | - | $ | 294,000 | $ | - | $ | - | $ | - | ||||||||||||
| Handpieces | 204,220 | - | 204,220 | - | - | - | ||||||||||||||||||
| Other | - | - | - | - | - | - | ||||||||||||||||||
| Grand Total | $ | 498,220 | $ | - | $ | 498,220 | $ | - | $ | - | $ | - | ||||||||||||
| Total Product Sales | $ | 2,734,638 | $ | 106,400 | $ | 2,841,038 | $ | 2,291,366 | $ | 32,100 | $ | 2,323,466 | ||||||||||||
| 19 |
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| Dental | Medical | Grand Total | Dental | Medical | Grand Total | |||||||||||||||||||
| Domestic-US | ||||||||||||||||||||||||
| Instruments | $ | 344,922 | $ | 28,300 | $ | 373,222 | $ | 361,065 | $ | 5,000 | $ | 366,065 | ||||||||||||
| Handpieces | 2,064,989 | 179,600 | 2,100,894 | 2,100,894 | 74,350 | 2,175,244 | ||||||||||||||||||
| Other | 44,084 | - | 44,084 | 24,389 | - | 24,389 | ||||||||||||||||||
| Grand Total | $ | 2,453,995 | $ | 207,900 | $ | 2,661,895 | $ | 2,486,348 | $ | 79,350 | $ | 2,565,698 | ||||||||||||
| International Rest of World | ||||||||||||||||||||||||
| Instruments | $ | 499,553 | $ | 4,100 | $ | 503,653 | $ | 344,814 | $ | 4,000 | $ | 348,814 | ||||||||||||
| Handpieces | 1,305,669 | 2,000 | 1,307,669 | 1,508,065 | - | 1,508,0657 | ||||||||||||||||||
| Other | 31,634 | - | 31,634 | 23,309 | - | 23,309 | ||||||||||||||||||
| Grand Total | $ | 1,836,856 | $ | 6,100 | $ | 1,842,956 | $ | 1,876,188 | $ | 4,000 | $ | 1,880,188 | ||||||||||||
| International China | ||||||||||||||||||||||||
| Instruments | $ | 294,000 | $ | - | $ | 294,000 | $ | 110,000 | $ | - | $ | 110,000 | ||||||||||||
| Handpieces | 204,220 | - | 204,220 | - | - | - | ||||||||||||||||||
| Other | - | - | - | - | - | - | ||||||||||||||||||
| Grand Total | $ | 498,220 | $ | - | $ | 498,220 | $ | 110,000 | $ | - | $ | 110,000 | ||||||||||||
| Total Product Sales | $ | 4,789,071 | $ | 214,000 | $ | 5,003,071 | $ | 4,472,536 | $ | 83,350 | $ | 4,555,886 | ||||||||||||
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 months ended June 30, 2026 and 2025, respectively. The trends suggested by this table may not be indicative of future operating results:
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||||||||
| Product sales, net | $ | 2,841,038 | $ | 2,323,466 | $ | 5,003,071 | $ | 4,555,886 | ||||||||
| Cost of products sold | 930,871 | 705,860 | 1,528,880 | 1,290,845 | ||||||||||||
| Gross profit | $ | 1,910,167 | $ | 1,617,606 | $ | 3,474,191 | $ | 3,265,041 | ||||||||
| Selling, general and administrative expenses | $ | 2,945,532 | $ | 3,030,952 | $ | 5,318,184 | $ | 6,287,680 | ||||||||
| Research and development expenses | 6,609 | 51,789 | 6,609 | 420,909 | ||||||||||||
| Depreciation and amortization expense | 19,589 | 19,496 | 39,043 | 38,936 | ||||||||||||
| Total operating expenses | $ | 2,971,730 | $ | 3,102,237 | $ | 5,363,836 | $ | 6,747,525 | ||||||||
| Loss from operations | $ | (1,061,563 | ) | $ | (1,484,631 | ) | $ | (1,889,645 | ) | $ | (3,482,484 | ) | ||||
| Interest (expense) income, net | 2,231 | 1,521 | (9,540 | ) | 4,788 | |||||||||||
| Loss before provision for income taxes | $ | (1,059,332 | ) | $ | (1,483,110 | ) | $ | (1,899,185 | ) | $ | (3,477,696 | ) | ||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net loss | $ | (1,059,332 | ) | $ | (1,483,110 | ) | $ | (1,899,185 | ) | $ | (3,477,696 | ) | ||||
| 20 |
Three months ended June 30, 2026 compared to three months ended June 3, 2025
Net sales for 2026 and 2025 were as follows:
| 2026 | 2025 | Change | ||||||||||
| Dental | $ | 2,734,638 | $ | 2,291,366 | $ | 443,272 | ||||||
| Medical | 106,400 | 32,100 | 74,300 | |||||||||
| Total sales, net | $ | 2,841,038 | $ | 2,323,466 | $ | 517,572 | ||||||
Total product sales for the three months ended June 30, 2026 were approximately $2.8 million, compared to approximately $2.3 million for the same period in 2025, representing an increase of approximately $518,000, or 22.3%.
Dental product revenue was approximately $2.7 million, an increase of approximately $443,000, or 19.3%, compared with the prior-year period. The increase was primarily driven by approximately $498,000 of sales to customers in China during the current quarter, compared with no sales to China in the prior-year period. This increase was partially offset by modest decreases in sales in the United States and other international markets of approximately 2% and 3%, respectively, which may reflect normal fluctuations in distributor ordering patterns and broader market conditions.
Medical revenue increased to approximately $106,000, compared to approximately $32,000 in the prior period, representing an increase of approximately $74,000, or 231.5%. The increase reflects continued early-stage adoption and commercialization of the Company’s medical products.
Overall, the increase in total net sales was driven by growth in both the Dental and Medical segments, notwithstanding continued variability in certain international markets.
Gross profits for 2026 and 2025 were as follows:
| 2026 | 2025 | Change | ||||||||||
| Dental | $ | 1,828,605 | $ | 1,586,500 | $ | 242,105 | ||||||
| Medical | 81,562 | 31,106 | 50,456 | |||||||||
| Total gross profit | $ | 1,910,167 | $ | 1,617,606 | $ | 292,561 | ||||||
Gross margin was approximately 67.2% for the three months ended June 30, 2026, compared with approximately 69.6% for the same period in 2025.
Gross profit increased by approximately $293,000, or 18.1%, primarily due to higher sales in both the Dental and Medical segments. Dental gross profit increased by approximately $242,000, while Medical gross profit increased by approximately $50,000.
Gross margin decreased by approximately 2.4 percentage points, primarily due to product and customer mix and increased product costs, including tariffs imposed on certain imported products and components. These cost pressures were partially offset by the higher level of sales during the current period.
| 21 |
Selling, general and administrative expenses for 2026 and 2025 were as follows:
| 2026 | 2025 | Change | ||||||||||
| Dental | $ | 1,024,724 | $ | 1,083,794 | $ | (59,070 | ) | |||||
| Medical | 412,894 | 449,551 | (36,657 | ) | ||||||||
| Corporate | 1,507,914 | 1,497,607 | (10,307 | ) | ||||||||
| Total selling, general and administrative expense | $ | 2,945,532 | $ | 3,030,952 | $ | (85,420 | ) | |||||
Total operating expenses decreased by approximately $0.1 million, or 4.2%, to approximately $3.0 million for the three months ended June 30, 2026, compared with approximately $3.1 million for the three months ended June 30, 2025. The decrease was primarily attributable to lower quality and regulatory expenses, consulting and professional service fees, research and development expenses, rent and occupancy costs, and other segment items. These decreases were partially offset by increases in stock-based compensation, warehousing expense, royalty expense, marketing expense, salaries and employee benefits, and travel expense. increased promotional activities, trade shows, advertising, product launches, or customer-acquisition initiatives. Salaries and employee benefits increased by approximately $23,000, or 2.8%, to approximately $863,000, compared with approximately $840,000 in the prior-year period. The increase was primarily attributable to salary increases, changes in staffing levels, employee benefits, or other personnel-related costs. Stock-based compensation expense increased by approximately $94,000, or 59.1%, to approximately $254,000, compared with approximately $160,000 in the prior-year period. The increase was primarily attributable to new equity awards, the timing of vesting, or changes in the valuation and forfeiture of outstanding awards. Royalty expense increased by approximately $31,000, or 25.9%, to approximately $151,000, compared with approximately $120,000 in the prior-year period. The increase was primarily attributable to higher sales of products subject to contractual royalty arrangements. Warehousing expense increased by approximately $46,000, or 36.1%, to approximately $175,000, compared with approximately $129,000 in the prior-year period. The increase was primarily attributable to higher inventory storage, handling, fulfillment, freight, or third-party logistics costs. Quality and regulatory expense decreased by approximately $203,000, or 60.9%, to approximately $130,000, compared with approximately $333,000 in the prior-year period. The decrease was primarily attributable to lower spending on regulatory submissions, product testing, quality-system initiatives, compliance consulting, or other regulatory activities. Marketing expense increased by approximately $30,000, or 39.2%, to approximately $108,000, compared with approximately $77,000 in the prior-year period. The increase was primarily attributable to increased promotional activities, trade shows, advertising, product launches, or customer-acquisition initiatives. Consulting and professional service fees decreased by approximately $83,000, or 9.3%, to approximately $817,000, compared with approximately $901,000 in the prior-year period. The decrease was primarily attributable to lower legal, accounting, advisory, consulting, or transaction-related expenses. Travel expense increased by approximately $13,000, or 17.9%, to approximately $87,000, compared with approximately $74,000 in the prior-year period. The increase was primarily attributable to higher travel associated with sales, regulatory, operational, and business-development activities.
Research and Development for 2026 and 2025 were as follows:
| 2026 | 2025 | Change | ||||||||||
| Dental | $ | 6,609 | $ | 47,089 | $ | (40,480 | ) | |||||
| Medical | - | 4,700 | (4,700 | ) | ||||||||
| Corporate | - | - | - | |||||||||
| Total research and development | $ | 6,609 | $ | 51,789 | $ | (45,180 | ) | |||||
Research and development expense decreased by approximately $45,000, as no major R&D expenses were incurred during the current period compared to the prior period. The Company continues to evaluate its research and development priorities and may make targeted investments in future periods to support product enhancements, new applications, and long-term growth initiatives.
Profit (Loss) from Operations for 2026 and 2025 were as follows:
| 2026 | 2025 | Change | ||||||||||
| Dental | $ | 797,273 | $ | 455,626 | $ | 341,647 | ||||||
| Medical | (331,332 | ) | (423,152 | ) | 91,820 | |||||||
| Corporate | (1,527,504 | ) | (1,517,105 | ) | (10,399 | ) | ||||||
| Total loss from operations | $ | (1,061,563 | ) | $ | (1,484,631 | ) | $ | 423,068 | ||||
Loss from operations was approximately $1.1 million for the three months ended June 30, 2026. The loss from operations resulted from gross margin of approximately $1.9 million, which was more than offset by operating expenses of approximately $3.0 million.
The improvement was primarily attributable to reduced operating expenses.
Six months ended June 30, 2026 compared to six months ended June 30, 2025
Net sales for 2026 and 2025 were as follows:
| 2026 | 2025 | Change | ||||||||||
| Dental | $ | 4,789,071 | $ | 4,472,536 | $ | 316,535 | ||||||
| Medical | 214,000 | 83,350 | 130,650 | |||||||||
| Total sales, net | $ | 5,003,071 | $ | 4,555,886 | $ | 447,185 | ||||||
Total product sales for the six months ended June 30, 2026 were approximately $5.0 million, compared to approximately $4.6 million for the same period in 2025, representing an increase of approximately $447,000, or 9.8%.
Dental product revenue was approximately $4.8 million, representing an increase of approximately $317,000, or 7.1%, compared to the prior year end period. The increase was primarily attributable to higher sales of the Company’s dental products. The increase was primarily driven by approximately $498,000 of sales to customers in China during the current quarter, compared with $110,000 sales to China in the prior-year period. This increase was partially offset by lower demand from certain international distributors, which the Company believes was influenced by ongoing geopolitical conditions, including the Russia-Ukraine conflict and instability in the Middle East.
| 22 |
Medical product revenue increased to approximately $214,000 from approximately $83,000 in the prior-year period, representing an increase of approximately $131,000, or 156.7%. The increase reflects continued early-stage adoption and commercialization of the Company’s medical products.
Overall, the increase in total net sales was driven by growth in both the Dental and Medical segments, notwithstanding continued variability in certain international markets.
Gross profits for 2026 and 2025 were as follows:
| 2026 | 2025 | Change | ||||||||||
| Dental | $ | 3,298,457 | $ | 3,182,775 | $ | 115,682 | ||||||
| Medical | 175,734 | 82,266 | 93,468 | |||||||||
| Total gross profit | $ | 3,474,191 | $ | 3,265,041 | $ | 209,150 | ||||||
Gross margin was approximately 69.4% for the six months ended June 30, 2026, compared with approximately 71.7% for the same period in 2025.
Gross profit increased by approximately $209,000, or 6.4%, primarily due to higher sales in both the Dental and Medical segments. Dental gross profit increased by approximately $116,000, while Medical gross profit increased by approximately $93,000.
Gross margin decreased by approximately 2.2 percentage points, primarily due to product and customer mix and increased product costs, including tariffs imposed on certain imported products and components. These cost pressures were partially offset by the higher level of sales and increased contribution from the Medical segment during the current-year period.
Selling, general and administrative expenses for 2026 and 2025 were as follows:
| 2026 | 2025 | Change | ||||||||||
| Dental | $ | 1,958,740 | $ | 2,135,900 | $ | (177,160 | ) | |||||
| Medical | 820,108 | 917,655 | (97,547 | ) | ||||||||
| Corporate | 2,539,336 | 3,234,125 | (694,789 | ) | ||||||||
| Total selling, general and administrative expense | $ | 5,318,184 | $ | 6,287,680 | $ | 969,496 | ||||||
Total operating expenses decreased by approximately $1.4 million, or 20.5%, to approximately $5.4 million for the six months ended June 30, 2026, compared with approximately $6.7 million for the six months ended June 30, 2025. The decrease was primarily attributable to lower consulting and professional service fees, research and development expenses, and quality and regulatory expenses, partially offset by increases in salaries and employee benefits, stock-based compensation expense, warehousing expense, royalty expense, and travel expense. Salaries and employee benefits increased by approximately $84,000, or 5.2%, to approximately $1.7 million, compared with approximately $1.6 million in the prior-year period. The increase was primarily attributable to additional personnel, salary increases, employee benefits, or changes in departmental staffing Stock-based compensation expense increased by approximately $76,000, or 15.5%, to approximately $566,000, compared with approximately $490,000. Royalty expense increased by approximately $14,000, or 6.1%, to approximately $246,000, compared with approximately $232,000 in the prior-year period. The increase was primarily attributable to higher sales of products subject to royalty arrangements. Warehousing expense increased by approximately $54,000, or 21.5%, to approximately $305,000, compared with approximately $251,000 in the prior-year period. The increase was primarily attributable to higher inventory storage, handling, fulfillment, freight, or third-party logistics costs. Quality and regulatory expense decreased by approximately $192,000, or 46.1%, to approximately $225,000, compared with approximately $417,000 in the prior-year period. The decrease was primarily attributable to lower spending on regulatory submissions, product testing, quality-system initiatives, compliance consulting, or other regulatory activities. Marketing expense decreased by approximately $8,000, or 4.1%, to approximately $181,000, compared with approximately $189,000 in the prior-year period. The decrease was primarily attributable to the timing of promotional programs, trade shows, advertising, or customer-acquisition activities. Consulting and professional service fees decreased by approximately $976,000, or 44.7%, to approximately $1.2 million, compared with approximately $2.2 million in the prior-year period. The decrease was primarily attributable to lower legal, accounting, advisory, consulting, and transaction-related costs incurred during the current period.
| 23 |
Research and Development for 2026 and 2025 were as follows:
| 2026 | 2025 | Change | ||||||||||
| Dental | $ | 6,609 | $ | 411,896 | $ | (405,287 | ) | |||||
| Medical | - | 9,013 | (9,013 | ) | ||||||||
| Corporate | - | - | - | |||||||||
| Total research and development | $ | 6,609 | $ | 420,909 | $ | (414,300 | ) | |||||
Research and development expense decreased by approximately $414,000, as no major R&D expenses were incurred during the current period compared to the prior period.
The Company continues to evaluate its research and development priorities and may make targeted investments in future periods to support product enhancements, new applications, and long-term growth initiatives.
Profit (Loss) from Operations for 2026 and 2025 were as follows:
| 2026 | 2025 | Change | ||||||||||
| Dental | $ | 1,333,108 | $ | 634,979 | $ | 698,129 | ||||||
| Medical | (644,375 | ) | (844,402 | ) | 200,027 | |||||||
| Corporate | (2,578,378 | ) | (3,273,061 | ) | 694,683 | |||||||
| Total loss from operations | $ | (1,889,645 | ) | $ | (3,482,484 | ) | $ | 1,592,839 | ||||
Loss from operations for the six months ended June 30, 2026 was approximately $1.8 million, compared with approximately $3.5 million for the six months ended June 30, 2025, an improvement of approximately $1.7 million, or 48.6%.
The improvement was primarily attributable to higher revenue and gross profit and significant reductions in professional fees, research and development expenses, quality control and regulatory expenses. These improvements were partially offset by increases in salaries and compensation, warehousing and logistics expenses, royalty expense and travel expenses.
Liquidity and Capital Resources
Cash Flows
The following table summarizes our sources and uses of cash for the six months ended:
| 2026 | 2025 | Change | ||||||||||
| Cash flow: | ||||||||||||
| Net cash used in operating activities | (498,285 | ) | $ | (2,772,273 | ) | $ | 2,273,988 | |||||
| Net cash used in investing activities | (5,771 | ) | (5,776 | ) | 5 | |||||||
| Net cash provided by financing activities | 1,458,184 | 794,305 | 663,879 | |||||||||
| $ | 954,128 | $ | (1,983,744 | ) | $ | 2,937,872 | ||||||
Net cash used in operating activities was approximately $0.5 million for the six months ended June 30, 2026, compared with approximately $2.8 million for the six months ended June 30, 2025. The approximately $2.3 million decrease in cash used in operating activities was primarily attributable to a reduction in net loss and favorable changes in certain working capital account
Net cash used in investing was minimal in both periods.
Net cash provided by financing activities was approximately $1.5 million for the six months ended June 30, 2026, compared with approximately $0.8 million for the six months ended June 30, 2025. During the six months ended June 30, 2026, the Company received approximately $1.8 million of gross proceeds (or approximately $1.5 million net of issuance costs) from a private placement. Additionally, approximately $350,000 of convertible notes payable was converted into shares of the Company’s common stock in a noncash financing transaction.
Consideration of the Company’s ability to continue as a going concern.
As of June 30, 2026, the Company had cash and cash equivalents of approximately $2.1 million and working capital of approximately $3.7 million.
The Company has incurred recurring operating losses and has an accumulated deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
On April 20, 2026, the Company completed a private placement of 7,962,963 units at a purchase price of $0.27 per unit, generating gross proceeds of approximately $2.15 million, consisting of $1.80 million in cash and a reduction of $351,000 in outstanding principal of the Company’s outstanding convertible notes, the holders of which applied such principal amounts toward the purchase of units in the offering in lieu of cash.
The Company’s ability to continue as a going concern is dependent upon its ability to generate sufficient revenue, manage operating expenses, and obtain additional financing, if necessary.
As discussed in Note 2 to the unaudited condensed consolidated financial statements, the Company’s current financial condition raises substantial doubt about its ability to continue as a going concern. Management believes that existing cash resources, anticipated collections and potential financing proceeds may support near-term operations; however, additional financing is required, and there can be no assurance that such financing will be available on acceptable terms, or at all. Accordingly, substantial doubt about the Company’s ability to continue as a going concern has not been alleviated.
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.
| 24 |
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 June 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.
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 June 30, 2026, our disclosure controls and procedures were effective at a reasonable assurance level.
Changes in Internal Control over Financial Reporting
We routinely review our internal control over financial reporting and, from time to time, make changes intended to enhance the effectiveness of our internal control over financial reporting. During the three months ended June 30, 2026, we made no changes to our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that we believe materially affected, or are reasonably likely to affect, our internal control over financial reporting materially.
Item 1 – Legal Proceedings
None
Item 1A. Risk Factors
Except as disclosed below, there have been no material changes to the risk factors previously disclosed in Part I, Item 1A, of our 2025 Annual Report.
Our ability to continue as a going concern may adversely affect our business
The Company has incurred significant losses since its inception and continues to experience operating losses. Although operating performance improved during the six months ended June 30, 2026, including positive operating cash flow, there can be no assurance that the Company will sustain profitability or positive cash flows in future periods. As of June 30, 2026, the Company had limited cash resources, and these conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company may need to raise additional capital through equity or debt financings, and such financing may not be available on acceptable terms, or at all.
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.
| 25 |
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.
Government Action on tariffs, research grants, and other funding may impede our ability to conduct our research and to raise capital.
Federal government actions to impose tariffs and limit research grants and other funding, including funding for universities and research enterprises, may cause disruption to our business. To the extent the Company seeks to invest in product enhancements or next-generation development, including further advancement of the CompuFlo® Epidural platform, government actions that constrain collaborative research funding may reduce the pool of available research partners and increase the cost and difficulty of such efforts. In addition, tariffs are likely to increase the cost of doing business, particularly given the Company’s reliance on Chinese manufacturers for handpieces and other key components, and reduced research funding may make it more difficult for the Company to attract capital from investors who consider the availability of funded development partners as part of their investment analysis.
We are subject to risks related to international operations and geopolitical conditions
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.
| 26 |
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 June 30, 2026, revenue from China increased to $498,000, compared to $0 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 - reduced 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.
We rely on key personnel and consultants
The Company’s success depends in part on the continued services of key executives, consultants, and technical personnel. The loss of key individuals or the inability to attract and retain qualified personnel could adversely affect the Company’s ability to execute its business strategy, maintain key relationships, and advance its commercialization efforts.
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. As of June 30, 2026, the Company’s reported total stockholders’ equity was approximately $3.5 million - below both thresholds - and the Company has reported net losses in each of the past five fiscal years.
To maintain its listing, the Company submitted a plan of compliance outlining the actions it has taken or will take to regain compliance. The Company will be able to continue its listing but will be subject to periodic reviews by the NYSE American. If the Company fails to comply with the continued listing standards by April 8, 2027, or if the Company does not make progress consistent with the plan, the NYSE American will initiate delisting procedures as appropriate. The Company’s management is pursuing options to address the deficiency.
While in the Private Placement, we increased our stockholders’ equity, the Company cannot assure that it will achieve the required equity thresholds within the required timeframe, particularly given its ongoing operating losses and going concern uncertainty. If we fail to regain compliance with and adhere to NYSE American’s strict listing criteria, including with respect to stock price, our market capitalization and stockholders’ equity, our stock may be de-listed. This would impair the liquidity of our securities not only in the number of shares that could be bought and sold at a given price, which may be depressed by the relative illiquidity, but also through delays in the timing of transactions and the potential reduction in media coverage. As a result, an investor might find it more difficult to dispose of our common stock if we are delisted. Any failure at any time to meet the continuing NYSE American listing requirements would have an adverse impact on the value of and trading activity in our common stock. There can be no assurance that we can maintain the listing of our common stock on the NYSE American.
Our April 2026 private placement and outstanding convertible instruments create significant dilution risk for existing stockholders.
In April 2026, the Company issued 7,962,963 units in a private placement at $0.27 per unit, each consisting of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $0.3375, exercisable for three years. This issuance increased the Company’s outstanding shares by approximately 10%. If all warrants are exercised, existing stockholders would experience an additional approximately 10% dilution, generating up to approximately $2.69 million in gross proceeds. In addition, following the partial conversion of $351,000 of principal in connection with the private placement, the Company has approximately $449,000 in aggregate outstanding principal under its Convertible Notes, which are convertible into shares of common stock at the option of the holders or the Company at a conversion price not less than $0.50 per share. Given the Company’s recurring operating losses and going concern uncertainty, we may need to pursue additional equity or debt financings in the future, which would further dilute existing stockholders. Cumulative dilution from these instruments and any future financings may depress the trading price of our common stock and adversely affect stockholder value.
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Item 2. Unregistered Sales of Equity Securities and use of proceeds
Not applicable.
Item 3. Default upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosure
Not applicable.
Item 5. Other Information
Not applicable.
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 | |
| 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. | |
| 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 as of April 1, 2026. | |
| 10.8 | Form of Lock-Up Agreements by Leonard Osser and Marilyn Elson in favor of Milestone Scientific Inc. | |
| 10.9 | Executive Chairman Agreement between the Company and Benedetta Casamento, dated June 19,2026 | |
| 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: August 13, 2026 |
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