MILESTONE SCIENTIFIC INC. Annual Report Summary

I’ve put together this guide to help you understand how Milestone Scientific performed this year. My goal is to cut through the corporate jargon so you can see the big picture clearly.

1. What does this company do?

Milestone Scientific makes high-tech, computer-controlled tools for injections. Their "secret sauce" is Dynamic Pressure Sensing (DPS) technology. This gives doctors real-time, objective data on the pressure at the needle tip, replacing the "feel" doctors traditionally rely on.

• Dental: Their "Wand" and "STA" (Single Tooth Anesthesia) systems make injections more comfortable and precise. They sell these mainly through a direct-to-dentist website.
• Medical: Their "CompuFlo" system helps doctors perform safer epidurals. It provides visual and audible confirmation when the needle reaches the right spot, reducing the risk of accidental punctures.

2. Financial performance

The company is currently spending more than it earns. For 2023, they reported a loss of $6.8 million, compared to a $5.7 million loss in 2022. Revenue for 2023 was $8.4 million, down 19% from $10.3 million in 2022. They also used $2.9 million in cash to run their operations. Simply put, they are spending significantly more on research and overhead than they are bringing in from sales.

3. Major wins and challenges

• Wins: They own over 300 patents worldwide. A major 2024 win was securing a specific billing code for their CompuFlo system, which allows for Medicare reimbursement. This removes a significant financial hurdle for hospitals and clinics.
• Challenges: They are trying to shift from a niche dental supplier to a medical device manufacturer. Their medical growth depends on changing clinical habits that have been in place for 160 years. This requires slow, expensive physician training and clinical proof.

4. Financial health

The company is in "survival mode." As of their last report, they had about $2.6 million in cash. Because they are spending cash quickly, they warned investors there is "substantial doubt" they can keep operating without raising more money. They often sell more shares to fund operations. This increases the total number of shares, which reduces your ownership percentage and potential earnings per share.

5. Key risks

• Survival Risk: They need to raise more money within the next year. If they cannot find new funding, they will have to cut back on research and sales efforts.
• Supply Chain: They rely on one website for dental sales. Any technical issues or shipping problems could stop their main source of income.
• Regulatory Hurdles: They must meet strict new European medical standards by 2027. If they fail, they will lose the ability to sell medical devices in the European Union.
• Market Adoption: Their medical business relies heavily on the CompuFlo system. If doctors don't adopt it, the company has no other major product to cover their losses.

6. Competitive positioning

Milestone stands out through its proprietary technology and clinical studies. However, they are a small company competing against massive, wealthy medical conglomerates. Since 45% of their revenue comes from outside the U.S., they are also vulnerable to currency changes and trade barriers.

7. Future outlook

The company is focused on reaching profitability. They hope the new Medicare billing code will drive hospital sales. They are also working toward European certification by 2027 and looking for ways to raise the cash needed to keep the business running until they break even.

Investor Takeaway: Milestone Scientific is a high-risk, high-reward play. Their technology is patented and innovative, but their current financial situation is precarious. Before considering an investment, weigh whether you believe their new Medicare billing code will drive enough sales to bridge the gap before they run out of cash.