UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
For
the fiscal year ended December 31, 2025
Or
For
the transition period from
Commission
file number 001-14053
Milestone
Scientific Inc.
(Exact
name of registrant as specified in its charter)
425
Eagle Rock Avenue, Roseland, NJ07068
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: 973-535-2717.
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Symbol Name of each exchange on which registered.
Common Stock, par value $0.001 per share MLSS NYSE American
Securities
registered pursuant to section 12(g) of the Act: NONE.
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒
No
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. ☒ Yes ☐ No
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). ☒ Yes
☐ No
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 ☐
Non-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 has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As
of June 30, 2025, the last business day of the registrants most recently completed second fiscal quarter, the aggregate market value
of the common stock held by non-affiliates of the issuer was $39,730,497This amount is based on the closing price of $0.64 per share
of the registrant’s common stock as of such date, as reported on the NYSE American.
As
of March 31, 2026, the registrant has a total of 80,453,116 shares of Common Stock, par value $0.001 per share outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None
MILESTONE
SCIENTIFIC INC.
Form
10-K Annual Report
TABLE
OF CONTENTS
PART I
Item 1. Business 4
Item 1A. Risk Factors 9
Item 1B. Unresolved Staff Comments 24
Item 1C Cybersecurity 25
Item 2. Description of Property 25
Item 3. Legal Proceedings 25
Item 4. Mine Safety Disclosure 25
PART II
Item 6. Selected Financial Data 26
Item 7. Management’s Discussion and Analysis or Plan of Operations 27
Item 7A. Quantitative and Qualitative Disclosure about Market Risk 33
Item 8. Financial Statements 33
Item 9A. Controls and Procedures 34
Item 9B. Other Information 34
Item 9C. Disclosure regarding Foreign Jurisdiction that Prevents inspections 34
PART III
Item 11. Executive Compensation 41
Item 14. Principal Accounting Fees and Services 50
PART IV
Item 15. Exhibits and Financial Statement Schedules 51
SIGNATURES 52
EXHIBITS
FORWARD-LOOKING
STATEMENTS
When
used in this Annual Report on Form 10-K, 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 capital 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, 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 China, 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, and
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, 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 Annual Report on Form 10-K. 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 ®.
Item
1. Business
Overview
Milestone
Scientific Inc. was incorporated in the State of Delaware in August 1989. The Company develops and commercializes proprietary computer-controlled
drug delivery systems designed to enhance the safety, precision, and patient experience associated with subcutaneous injections and fluid
aspiration procedures.
The
Company’s core technology platform, Dynamic Pressure Sensing® (“DPS”) Technology, controls flow rate and measures
pressure at the needle tip in real time. DPS Technology is incorporated into both the Company’s dental and medical products and
supports clinical applications, including local anesthesia delivery, epidural space identification in regional anesthesia procedures,
and intra-articular joint injections.
In
the dental market, the Company’s products are marketed under the CompuDent® and STA Single Tooth Anesthesia System® trademarks
and utilize The Wand®, a single-use disposable handpiece. These products are sold in the United States, Canada, and more than 40
other countries. In the medical market, the Company has received U.S. Food and Drug Administration (“FDA”) 510(k) clearance
for its CompuFlo® Epidural Computer Controlled Anesthesia System for use in specified regions of the spine.
The
Company continues to evaluate opportunities to expand its distribution channels, including e-commerce and third-party distributor relationships,
and to pursue additional regulatory clearances and commercial opportunities in domestic and international markets.
DPS
Dynamic Pressure Sensing Technology; Our Proprietary Core Technology Platform
Given
our experience and established brand awareness within the dental industry beginning with our first commercial product, the first computer-controlled
local anesthesia delivery (C-CLAD) system marketed as the Wand® and re-branded as the CompuDent® System, now the market leader
in dental injection technology, we elected to focus our product development efforts on improving the patient experience and making the
device more versatile and precise for the practitioner.
Our
next significant intellectual property advancement was an improvement over our CompuDent® System – the development of our proprietary
CompuFlo® Computer-Controlled Drug Delivery System with DPS Dynamic Pressure Sensing Technology, an advanced technology for the painless
and accurate delivery of drugs, anesthetics, and other medicaments into all tissue types, as well as for the aspiration of bodily fluids
or previously injected substances. Its regulation and control of the flow rate continue to provide painless delivery benefits. In contrast,
its innovative dynamic pressure sensing capability provides visual and audible in-tissue pressure feedback, identifying tissue types
to the healthcare provider. This pressure feedback extends the benefit of painlessness from anesthetics with known viscosities to a wide
range of liquid drugs and other medicaments with varying viscosities and flow rates. Such pressure feedback, part of our DPS Dynamic
Pressure Sensing Technology, also allows the healthcare provider to know when certain types of tissues have been penetrated and permits
the healthcare provider to inject medicaments precisely at the desired location. Thus, real-time continuous pressure feedback can prevent
the injection of tissue outside the intended target area, an important characteristic in the injection of chemotherapeutics and other
toxic substances.
In
addition to the ability to determine exit pressure in situ (in the injection site tissue) at the tip of the needle, minimizing tissue
damage (and eliminating the pain of the injection) because the flow rate and pressure of the injection are precisely controlled, CompuFlo®
computer-controlled Drug Delivery Systems features a proprietary algorithm, which allow for the measurement of the exit pressure. CompuFlo®
technology also enables devices to provide a digital record of the time and volume of anesthetic or medicament injected. Each Wand/STA
System also includes a disposable injection handpiece that is extremely comfortable, light, and easy to use, providing for precise tactile
control during the injection, an electro-mechanical (computer-controlled) fluid delivery instrument, and the ability to record data from
the injection event.
The pencil grip used with the handpieces provides the practitioner with enhanced tactile sense and accurate control
and allows bi-directional rotation, eliminating needle deflection, resulting in greater accuracy and success. The handpiece is vibration-free
because it does not have a motor or electrical component in it, and since the handpiece does not look like a typical syringe, we believe
it also reduces patient anxiety and offers the possibility of curing dental phobia, of which an estimated 40 million Americans suffer.
As
confirmed by numerous noted medical and dental experts within academia and the clinical practice arenas, CompuFlo Systems using DPS Dynamic
Pressure Sensing technology have the potential to greatly increase the safety and efficacy of many drug delivery procedures that currently
rely upon the over 160-year-old hypodermic syringe technology and the tactile senses and delivery expertise of the administrator.
Devices
using DPS Dynamic Pressure Sensing Technology, such as the CompuFlo System, can be used to inject a wide variety of liquid medicaments
as well as anesthetics. We believe our CompuFlo System avoids the negative side effects from the use of traditional hypodermic drug delivery
injection devices, which are well documented in dental and medical literature and include risk of death, transient or permanent paralysis,
pain, tissue damage, and post-operative complications. Pain and tissue damage often result from uncontrolled flow rates and pressure
created during the administration of drug solutions into human tissue. While several technologies can control the flow rate, we believe
our patented DPS Dynamic Pressure Sensing technology and CompuFlo Systems provide the control of pressure during the injection as well
as accurately and precisely deliver the drug.
CompuFlo
Epidural Computer Controlled Anesthesia System
The
CompuFlo Epidural Computer Controlled Anesthesia System (or the CompuFlo Epidural System) is one such platform extension of our DPS Dynamic
Pressure Sensing Technology platform, providing anesthesiologists and other healthcare providers the ability, for the first time, to
quantitatively determine and document the pressure at the needle tip in real-time for proper needle placement in epidural procedures
used for labor/delivery and back pain management. Our proprietary DPS Dynamic Pressure Sensing Technology allows the CompuFlo Epidural
System to provide objective visual and audible in-tissue pressure feedback that allows anesthesiologists to identify and confirm placement
in the epidural space.
Our
CompuFlo Epidural System provides an objective tool that we believe consistently and accurately identifies the epidural space by detecting
the difference in pressure between the ligamentum flavum and the intradural tissue. In studies, the CompuFlo Epidural System with DPS
Dynamic Pressure Sensing Technology has been shown to be effective in correctly identifying the epidural space. Knowing the precise location
of a needle tip during an epidural injection procedure provides a measure of safety not presently available to doctors using conventional
syringes. In the absence of fluoroscopy, identifying the epidural space by relying on the subjective perception of loss of resistance
to saline requires a very long education period and learning curve. It could result in morbidity and lack of efficacy. During back pain
management epidural procedures, where fluoroscopy is commonly used, the CompuFlo Epidural System allows the clinician to locate the epidural
space without using fluoroscopy, thereby protecting the patient and clinician from unnecessary exposure to radiation, along with significantly
reducing capital and operating costs.
Wand/STA
Dental Product
Since
its commercial introduction in early 2007, the STA Single Tooth Anesthesia (STA) System, together with its predecessor C-CLAD devices,
has been used to administer more than 95 million injections globally. The system is designed to provide controlled delivery of local
anesthetic and has been utilized in a broad range of dental procedures. The STA Instrument has been evaluated in multiple peer-reviewed
clinical studies and published articles. Feedback from practitioners and published literature indicate that the technology has been incorporated
into clinical practice in various markets worldwide.
Patents
and Intellectual Property
Milestone
Scientific and its subsidiaries currently hold approximately 305 issued U.S. and foreign patents, along with numerous pending patent
applications. These patents and applications relate to a wide range of proprietary technologies, including drug delivery methodologies;
drug flow-rate measurement; pressure- and force-based computer-controlled drug delivery with exit pressure; dynamic pressure sensing;
automated rate control and charging; drug delivery profiles; audible and visual feedback; tissue identification; injection units; drug
drive units for anesthetics; handpieces; and injection devices.
Medical
Market Product
As
of 2025, the CompuFlo® Epidural System has received multiple regulatory clearances and reimbursement milestones in the United States.
The system initially received FDA 510(k) clearance in 2017 for epidural injections in the lumbar region, with expanded clearance in 2023
for use in the thoracic region, including the cervicothoracic junction. In 2022, the American Medical Association assigned a technology-specific
Category III CPT® code (0777T), effective January 1, 2023, to facilitate tracking and reimbursement submissions when the system is
used in conjunction with primary epidural steroid injection procedures. In 2024, Medicare Administrative Contractors in Florida and multiple
additional jurisdictions established Medicare Part B physician payment determinations for CPT code 0777T. The Company also received Notices
of Allowance in the United States and Europe in 2024 related to its next-generation Dynamic Pressure Sensing® technology.
Other
Possible Product Applications
The
Company is exploring additional potential applications for its Dynamic Pressure Sensing® (“DPS”) technology platform
in various medical settings. These areas may include certain surgical and procedural specialties, as well as potential applications in
the self-injection drug market, where patients administer injectable therapies for chronic conditions at home or in clinical environments.
Development
of new product applications is subject to significant technical, clinical, regulatory, and commercial risks. Any new application of DPS
technology would require substantial research and development, potential clinical evaluation, regulatory review and clearance or approval,
and the establishment of manufacturing and distribution capabilities. The regulatory pathway for new indications or product configurations
may be lengthy, uncertain, and costly.
There
can be no assurance that the Company will successfully develop additional products or indications, obtain necessary regulatory clearances
or approvals from the U.S. Food and Drug Administration (“FDA”) or other regulatory authorities, secure reimbursement coverage,
achieve market acceptance, or generate revenue from any such initiatives. Failure to successfully develop and commercialize new applications
could adversely affect the Company’s future growth prospects.
Milestone
Scientific and its subsidiaries also hold approximately 10 registered U.S. and foreign trademarks, including CompuDent®, CompuFlo®,
DPS Dynamic Pressure Sensing® technology, Safety Wand®, STA Single Tooth Anesthesia System®, and The Wand®.
The
Company relies on a combination of patent, copyright, trade secret, and trademark laws, as well as employee and third-party nondisclosure
agreements, to protect its intellectual property rights. Despite these efforts, unauthorized parties may attempt to reverse engineer,
copy, or otherwise obtain and use technologies or information that the Company considers proprietary, or may develop competing products
that serve similar purposes without infringing the Company’s patents. Failure to adequately protect the Company’s proprietary
information, as well as the costs associated with such protection, could have a material adverse effect on the Company’s business,
financial condition, and results of operations.
In
addition, if the Company’s products are found to infringe upon the patent or proprietary rights of others, the Company may be required
to modify its products or processes or obtain licenses from third parties. There can be no assurance that any such licenses would be
available on commercially reasonable terms, promptly, or at all. Failure to do so could have a material adverse effect on the Company’s
business, financial condition, and results of operations.
Manufacturing
The
Company relies on third-party manufacturers for the production of its products. The Wand®/STA® System and epidural devices are
manufactured by a U.S.-based supplier pursuant to individual purchase orders without minimum volume commitments. Dental handpieces are
sourced from a manufacturer located in the People’s Republic of China under an agreement that includes pricing terms. The Company
has maintained long-standing relationships with these manufacturers.
The
Company’s dependence on a limited number of suppliers exposes it to risks, including pricing changes, supply disruptions, quality
issues, geopolitical factors, and termination of manufacturing relationships. Any interruption or inability to obtain an adequate supply
could materially and adversely affect the Company’s business, financial condition, and results of operations. See Item 1A, “Risk
Factors.”
Distribution
and Marketing
Dental
Products
The
Company markets and sells its dental products worldwide through a combination of exclusive and non-exclusive distribution arrangements.
In
the United States, the Company sells its STA Single Tooth Anesthesia Systems® and related handpieces directly to dental offices and
dental groups through an online sales portal. The Company’s e-commerce platform accepts electronic payments, including credit and
debit cards. Shipping costs are billed to customers, and applicable state and local sales taxes are collected.
Internationally,
the Company has granted exclusive marketing and distribution rights for the Wand STA System to select dental suppliers in certain regions
of Asia, Africa, South America, and Europe. The Company periodically evaluates its international distribution arrangements and may add,
replace, or expand distributor relationships based on commercial and regional economic considerations. The Company continues to assess
opportunities to appoint additional distributors globally as market conditions warrant.
Medical
Products
The
Company is engaged in the marketing and sale of medical products to customers in domestic and international markets. The Company’s
commercialization strategy is designed to support broad market access while maintaining operational efficiency and includes a combination
of direct sales efforts and third-party distribution arrangements.
In
the United States, the Company sells its medical products through a direct sales organization, supplemented by distribution arrangements
with independent agents. This hybrid approach allows the Company to maintain direct relationships with customers while leveraging external
sales resources to expand market reach.
Internationally,
the Company markets and sells its medical products through third-party distributors, including both exclusive and non-exclusive arrangements,
depending on the region. In certain markets, including Italy, the Company has entered into exclusive distribution agreements to support
localized sales, marketing, and customer support. The Company periodically evaluates its distribution strategy and may modify its sales
channels or distributor relationships based on market conditions, regulatory considerations, and commercial performance.
Competition
Milestone
Scientific, Inc. was the first company to commercialize a product designed to deliver a virtually painless subcutaneous injection, which
it introduced in 1997. With the launch of this technology, the Company established a new category of computer-controlled drug delivery
systems. Since that time, competing products have entered the market; however, the Company believes that its products have been more
extensively studied and adopted than competing alternatives, as evidenced by the number of scientific and clinical studies evaluating
the Company’s technologies.
Milestone
Scientific developed the first subcutaneous drug delivery platform that regulates and monitors both flow rate and exit pressure in real
time during injection. This proprietary approach enables the delivery of anesthetic solutions in a manner designed to minimize patient
discomfort. The Company’s patented Dynamic Pressure Sensing (“DPS”) technology further allows for the identification
of specific anatomical targets by providing real-time feedback during injection.
The
Company’s devices compete primarily on performance characteristics and the clinical and operational benefits provided to patients
and practitioners. Clinical studies evaluating the Company’s products have demonstrated reductions in patient fear, pain, and anxiety
associated with injections. The Company believes these benefits may also reduce practitioner stress and improve workflow efficiency.
In
the dental market, the Company competes with other computer-controlled local anesthesia delivery (“C-CLAD”) systems, including
the Soan, Quicksleeper, and SleeperOne devices manufactured by Dental Hi Tec, Dentapen by Septodont, Anaeject by Septodont, the Calaject
system by Aseptico, and the Comfort Control Syringe by Dentsply Sirona. These competing systems vary in design, functionality, price,
and market penetration.
Certain
competing devices incorporate motor-driven mechanisms to facilitate intraosseous injections or bone perforation. For example, the Quicksleeper
system, originally developed in France, integrates a motorized handpiece that allows both injection and bone perforation but is heavier
than a standard dental syringe and provides limited operator control over injection speed. Other devices emphasize specific use cases,
such as pediatric intraosseous injections, or have experienced limited market adoption due to distribution constraints or clinical preference.
In
the medical market, the Company’s products compete with devices designed to assist clinicians in identifying anatomical targets
during procedures such as epidural placement. Recent competitors include the EpiFaith syringe, Episure syringe, Epidrum device, and the
EpiFinder system, which received U.S. FDA clearance in 2023. These devices employ varying technologies and approaches, including loss-of-resistance
methods and sensor-based detection. The Company believes that its DPS technology is differentiated by providing continuous real-time
audible and visual pressure feedback throughout the entire needle insertion process.
The
Company’s proprietary systems also compete with conventional disposable and reusable syringes that utilize established manual techniques
and are generally offered at lower price points in both the dental and medical markets.
The
markets in which the Company operates are subject to technological change and ongoing research and development. Existing new competitors
may introduce products with enhanced features or alternative technologies that could reduce the market acceptance of the Company’s
products or render them less competitive. Accordingly, the Company devotes significant resources to improving existing products, developing
new technologies, expanding into adjacent markets, and maintaining regulatory compliance. The Company’s ability to compete successfully
also depends on maintaining an effective distribution network and executing a comprehensive marketing strategy. There can be no assurance
that the Company will successfully develop new products, obtain required regulatory approvals, or maintain its competitive position in
the marketplace.
Government
Regulation
The
manufacture and sale of medical devices and other medical products are subject to extensive regulation by the Food and Drug Administration
(“FDA”) pursuant to the U.S. Food, Drug, and Cosmetic Act (“FD&C Act”), and by other federal, state, and
foreign authorities. Under the FD&C Act, medical devices must receive FDA clearance before they can be marketed commercially in the
United States. Some medical products must undergo rigorous pre-clinical and clinical testing and an extensive FDA approval process before
they can be marketed.
These
processes can take many years and require the expenditure of substantial resources. The time required for completing such testing and
obtaining such approvals is uncertain, and FDA clearance may never be obtained. Delays or rejections may be encountered based upon changes
in FDA policy during the period of product development and FDA regulatory review of each product submitted. Similar delays may also be
encountered in other countries. Following the enactment of the Medical Device Amendments to the U.S. Food, Drug, and Cosmetic Act in
May 1976, the FDA classified medical devices in commercial distribution into one of three classes. This classification is based on the
controls necessary to ensure the safety and effectiveness of medical devices reasonably. Class I devices are those devices whose safety
and effectiveness can reasonably be ensured through general controls, such as adequate labeling, pre-market notification, and adherence
to the FDA’s Quality System Regulation (“QSR”), also referred to as “Good Manufacturing Practices” (“GMP”)
regulations. Some Class I devices are further exempt from some of the general controls. Class II devices are those devices whose safety
and effectiveness reasonably can be ensured using special controls, such as performance standards, post-market surveillance, patient
registries, and FDA guidelines. Class III devices are those that must receive pre-market approval by the FDA to ensure their safety and
effectiveness. Generally, Class III devices are limited to life-sustaining, life-supporting, or implantable devices.
For
us to commercialize other medical device products in the United States, Milestone Scientific would have to submit and have cleared additional
510(k) applications to the FDA. In 2017, the FDA reduced the barrier to marketing clearance for certain dental devices, which may enable
other manufacturers of injection devices to more readily enter the dental market. While regulatory requirements may affect market entry,
we believe that meaningful commercial adoption of new devices is generally dependent on access to established distribution channels within
the dental market.
Before
Pre-market Notification clearance, the manufacturer or distributor may not place the device into commercial distribution until the FDA
issues an order. By regulation, the FDA has no specific time limit by which it must respond to a 510(k) Pre-market Notification. Currently,
the FDA typically responds to the submission of a 510(k) Pre-market Notification within 180 days. The FDA response may declare that the
device is substantially equivalent to another legally marketed device and allow the proposed device to be marketed in the United States.
However, the FDA may determine that the proposed device is not substantially equivalent or may require further information, such as additional
test data, before the FDA is able to decide regarding substantial equivalence. Such a determination or request for additional information
could delay the market introduction of products. If a device that has obtained 510(k) Pre-market Notification clearance is changed or
modified in design, components, method of manufacture, or intended use, such that the safety or effectiveness of the device could be
significantly affected, separate 510(k) Pre-market notification clearance must be obtained before the modified device can be marketed
in the United States. If a manufacturer or distributor cannot establish that a proposed device is substantially equivalent to a legally
marketed device, the manufacturer or distributor will have to seek pre-market approval of the proposed device, a more difficult procedure
requiring extensive data, including pre-clinical and human clinical trial data, as well as extensive literature to prove the safety and
efficacy of the device.
The
FDA cleared the Wand, our CompuDent System, and its disposable handpieces, for marketing in the United States for dental applications
in July 1996; the CompuMed® System for marketing in the United States for medical applications in May 2001; the Safety Wand®
for marketing in the United States for dental applications in September 2003; the Wand/STA System for dental applications in August 2006;
and our CompuFlo Epidural System in June 2017.
Though
certain dental and medical devices have received FDA marketing clearance, there can be no assurance that any of the other medical devices
under development will obtain the required regulatory clearance promptly, or at all. If regulatory clearance of a product is granted,
such clearance may entail limitations on the indicated uses for which the product may be marketed. In addition, modifications may be
made to the products to incorporate and enhance their functionality and performance based upon new data and design review. There can
be no assurance that the FDA will not request additional information relating to product improvements; that any such improvements would
not require further regulatory review, thereby delaying the testing, approval, and commercialization of product improvements; or that
ultimately any such improvements will receive FDA clearance.
The
FDA’s regulations applicable to manufacturers of medical devices have historically included Quality System Regulation (“QSR”),
requiring, among other things, the establishment and maintenance of procedures governing design controls, testing, quality control, documentation,
and corrective and preventive actions. Failure to comply with applicable QSR requirements may result in enforcement actions by the FDA,
including warning letters, product recalls, suspension or termination of production, and the imposition of fines or other penalties.
Failure to comply with applicable QSR requirements may result in enforcement actions by the FDA, including warning letters, product recalls,
suspension or termination of production, and the imposition of fines or other penalties. Medical devices must also be manufactured in
establishments that are registered with the FDA and are subject to periodic inspection. In addition, labeling and promotional activities
are subject to regulation and oversight by the FDA and, with respect to advertising and marketing claims, in certain circumstances by
the Federal Trade Commission. The export of medical devices is also subject to FDA and other applicable regulatory requirements in certain
circumstances.
In
a regulatory shift, the FDA has adopted a new regulatory framework for the domestic medical device industry, replacing the longstanding
Quality System Regulation (QSR) under 21 CFR Part 820 and fundamentally aligning U.S. medical device requirements with ISO 13485 and
the quality management system (QMS) requirements used by other regulatory authorities from other jurisdictions. The new regulatory framework,
finalized as the Quality Management System Regulation (“QMSR”), became effective February 2, 2026.
The
QMSR is less of a wholesale rewrite and more of a strategic refinement of existing quality expectations. A primary change is the updating
of terminology, with the ISO concept of a Medical Device File replacing the QSR’s Device Master Record. More substantively, the
new rule makes risk management a clear, enforceable expectation across the entire product life cycle. Similarly, it strengthens supplier
and purchasing controls, with both contract manufacturers and component providers now subject to greater scrutiny and more rigorous oversight.
The new framework positions documented evidence, from training records to complaint files, as the undisputed cornerstone of compliance.
This heightened emphasis on robust and accessible documentation underscores the shift towards a more proactive, evidence-based approach
to quality.
For
firms already operating in international markets, including the Company, their international operations are already operating under ISO
13485, and the adoption of the QMSR is expected to reduce duplication in audits and documentation. However, to better confirm compliance
of the Company’s domestic quality control procedures with the new QMSR, the Company conducted a gap assessment, benchmarking
QSR-based systems against the requirements of ISO 13485 and the QMSR. This analysis has informed necessary updates to domestic
standard operating procedures, the quality manual and related compliance documentation. The Company has implemented the additional controls and process enhancements identified through this evaluation, and is compliant.
Compliance
with applicable regulatory requirements is subject to continual review and is monitored through periodic inspections by the FDA. Later
discovery of previously unknown problems with a product, manufacturer, or facility may result in restrictions on such product or manufacturer,
including fines, delays or suspensions of regulatory clearances, seizures or recalls of products, operating restrictions, and criminal
prosecution.
In the European Union, the Company is required to maintain compliance with applicable ISO standards and CE marking requirements in order
to market and sell its medical devices and must undergo periodic audits and inspections by notified bodies to obtain and maintain such
certifications. The Company’s products, including the Wand® STA System, dental handpieces used with the Wand® and Wand®
STA Systems, which are classified as Class IIa medical devices and the CompuFlo® Epidural System, which is classified as a Class
IIb medical device, are currently authorized for sale in the European Union under certificates issued pursuant to the former European
Medical Devices Directive (“MDD”). The European Union has replaced the MDD with Regulation (EU) 2017/745, commonly referred
to as the Medical Device Regulation (“MDR”), which establishes a more stringent regulatory framework for medical devices
marketed in the European Union. The MDR imposes enhanced requirements relating to clinical evidence, post-market surveillance, traceability,
transparency, and quality system oversight. While certification to ISO 13485 is not a mandatory legal requirement under the MDR, it is
the primary internationally recognized quality management system standard used by manufacturers to support compliance with the MDR’s
requirements. In this framework, ISO 13485 provides the quality management system structure, while the MDR sets forth the specific legal
and regulatory obligations applicable to medical devices in the European Union.
Under the MDR’s transitional provisions, Class IIa and Class IIb medical devices that were certified under the MDD may continue
to be marketed in the European Union for a limited period. To continue commercial sales in the European Union beyond the transition period,
the Company’s Class IIa and Class IIb devices must obtain certification under the MDR by December 31, 2028. The Company continues
to manage its MDR transition activities in coordination with notified bodies; however, failure to successfully obtain MDR certification
within the applicable timeframe could adversely affect the Company’s ability to market and sell its products in the European Union.
The Company’s products, including the Wand® STA System, dental handpieces used with the Wand® and Wand® STA Systems,
which are classified as Class IIa medical devices, and the CompuFlo® Epidural System, which is classified as a Class IIb medical device,
will have MDR certification in 2027.
Human
Capital
As
of the most recent reporting period, the Company employed a total of 15 full-time employees. In addition, the Company employs a consultant
who serves as Director of Clinical Affairs. The Company’s employees support key functions including research and development, engineering,
regulatory affairs, sales and marketing, finance, and operations.
The
Company is not a party to any collective bargaining agreements, and a labor union represents none of its employees. The Company has not
experienced any material labor disputes or work stoppages.
The
Company believes that its future success depends, in part, on its ability to attract, retain, and motivate qualified personnel. Management
evaluates workforce needs on an ongoing basis to ensure that human capital resources are aligned with operational requirements and strategic
objectives.
Corporate
Information
We
were organized in August 1989 under the laws of the State of Delaware. Our principal executive office is located at 425 Eagle Rock Avenue,
Roseland, New Jersey 07068. Our telephone number is (973) 535-2717.
Item
1A. Risk Factors
You
should carefully consider the risks and uncertainties described below, together with the other information included in this Annual Report
on Form 10-K. If any of the risks described below occur, our business, financial condition, results of operations, and prospects could
be materially and adversely affected. The risks described below are not the only risks we face. Additional risks and uncertainties that
we do not currently know about, or that we currently believe are immaterial, also may materially and adversely affect our business, financial
condition, results of operations, and/or prospects.
These disclosures reflect the Company’s beliefs
and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References to past
events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such
factors have occurred in the past or their likelihood of occurring in the future.
Risks
Related to Our Financial Position and Need for Additional Capital
We
have incurred significant losses since our inception. These operating losses are expected to continue and we are unable to predict
the extent of future losses, whether we will generate significant revenues, or whether we will achieve or sustain
profitability.
We are a small, non-diversified medical device company with a history of limited revenue and significant operating losses and our prospects
must be evaluated considering the uncertainties, risks, expenses, and difficulties frequently encountered by similarly situated companies.
We have generated net losses in all periods since inception, including operating losses of $5.7 million and $6.8
million for the years ended December 31, 2025, and 2024, respectively. These losses have adversely affected, and are expected to continue
to affect adversely, our working capital, total assets, and stockholders’ equity.
Because
of the risks and uncertainties associated with product acceptance, sales expansion, and competitive conditions, we cannot predict the
extent of future losses, whether we will generate significant revenues, or whether we will achieve or sustain profitability. Even if
we become profitable, we may not be able to maintain or increase profitability on a quarterly or annual basis. If we do not generate
sufficient profits from operations and become and remain profitable, our ability to raise capital, expand our business, maintain our
commercial efforts, or continue operations could be impaired. In addition, a decline in our valuation could cause stockholders to lose
all or part of their investment.
We
anticipate that we will need additional funding for our operations and may be unable to raise capital when needed, which may force us
to delay, curtail, or eliminate parts of the Company’s operations.
Our
operations have consumed substantial cash since inception. Net cash used in operating activities was approximately $2.9 million for
the years ended December 31, 2025, and 2024, respectively. We believe our near-term viability depends on our ability to raise
additional capital to finance operations through public or private equity offerings, collaborations, licensing arrangements, or
other sources. Although we intend to pursue additional funding, there can be no assurance that we will obtain sufficient capital on
acceptable terms, or at all. If we cannot raise capital when needed, we may be forced to delay, curtail, or eliminate research and
development programs or other operations. See also the risk factor titled “If we fail to regain compliance with the strict
listing requirements of NYSE American, we may be subject to delisting. As a result, our stock price may decline, and our common
stock may be delisted. If our stock were no longer listed on NYSE American, the liquidity of our securities likely would be
impaired.”
Sales
of a substantial number of shares of our common stock, or the perception that such sales may occur, may adversely impact the price of
our common stock.
Almost
all our 80,453,116 outstanding shares of common stock on December 31, 2025, are available for sale in the public market, either freely
or pursuant to Rule 144 under the Securities Act of 1933, as amended. Sales of a substantial number of shares of our common stock, or
the perception that such sales may occur, may adversely impact the price of our common stock.
Raising
additional capital by issuing securities or through licensing or lending arrangements may cause dilution to our existing stockholders,
restrict our operations, or require us to relinquish proprietary rights.
If
we raise additional capital through the issuance of equity securities, the share ownership of existing stockholders will experience dilution.
Debt financing could include covenants that restrict our operations, including limitations on our ability to incur liens or additional
indebtedness, pay dividends, redeem stock, make certain investments, or engage in particular merger, consolidation, or asset sale transactions.
If we raise funds through licensing arrangements or asset dispositions, we may be required to relinquish valuable rights to product candidates
or grant licenses on terms that are unfavorable.
Financial
institution instability could adversely affect our operations and financial condition.
We
maintain deposits that may exceed FDIC insurance limits. If our financial institution experiences distress or failure, we could experience
delayed access to, or a loss of, uninsured deposits or other financial assets. Although U.S. government agencies provided access to uninsured
deposits in connection with the Silicon Valley Bank crisis, there is no assurance that similar actions would occur in the future or occur
promptly. We are evaluating our banking relationships to increase the portion of deposits that are fully insured or invested in risk-free
instruments. Any non-performance by financial institutions could adversely affect our business operations and financial condition, including
through impaired access to cash, loss of deposits, or disruptions affecting our customers or vendors.
In
addition, any further deterioration in the macroeconomic economy or financial services industry, or delayed access or loss of uninsured
deposits or loss of the ability to draw on existing credit facilities involving a troubled or failed financial institution by our customers
or vendors, could lead to losses or defaults by companies with whom we do business, which in turn could have a material adverse effect
on our current and/or projected business operations, results of operations and financial condition. In addition, other companies could
be adversely affected by any of the liquidity or other risks that are described above as factors that could result in material adverse
impacts on us, including but not limited to delayed access or loss of uninsured deposits or loss of the ability to draw on existing credit
facilities involving a troubled or failed financial institution.
Our
financial statements have been prepared on a going concern basis, but there can be no assurance that we will be able to continue as a
going concern without raising additional capital.
Due
to our available cash and cash equivalents, recurring losses, accumulated deficit, and the need to raise additional
capital to finance operations, there is substantial doubt as to our ability to continue as a
going concern without raising additional capital.
Risks
Related to Sales and Distribution of Our Products
Our
sales and marketing efforts in the United States rely upon its E-Commerce platform.
We
believe that a significant portion of our sales will continue to be from its E-Commerce platform launched in January 2023, for the foreseeable
future. Currently, sales of the STA Single Tooth Anesthesia Systems® (STA) and handpieces in the United States are reliant on E-Commerce
sales. We have exposure to risks of operating in an E-commerce platform:
● Online security breaches and cyberattacks;
● Poor search engine visibility affects traffic and sales; and
● Unexpected changes in political or regulatory environments.
If
we are unable to maintain or expand our E-Commerce platform, our sales will be negatively affected.
We
are exposed to the risks inherent in international sales.
In 2025, export sales outside the United States represented approximately
45% of total sales, and we sold products in approximately 37 countries and U.S. territories. International operations expose us to risks