10-K: Milestone Scientific Reports 2025 Losses, NYSE Listing Risk

Milestone Scientific Inc. reported a net loss of $5.7 million for 2025, an improvement from 2024, but faces substantial doubt about its going concern ability and NYSE American listing compliance.

Summary

• Net loss improved to $5.7 million in 2025 from $6.8 million in 2024.
• Total net sales increased by 4% to $8.97 million in 2025, driven by higher international dental sales and domestic medical handpiece sales.
• Gross profit slightly decreased to $6.41 million in 2025 from $6.43 million in 2024, with gross margin declining to 71% from 75%.
• Operating expenses decreased by 9% to $12.1 million in 2025, primarily due to reductions in selling, general, and administrative (SG&A) and research and development (R&D) expenses.
• SG&A expenses decreased by 6% to $11.6 million, reflecting lower headcount, reduced regulatory consulting, and decreased marketing activities.
• R&D expenses decreased by 48% to $449,000, mainly due to delaying efforts on the next-generation Single Tooth Anesthesia System instrument.
• Cash and cash equivalents decreased significantly from $3.26 million in 2024 to $1.11 million in 2025.
• The company received $800,000 in related-party financing in April 2025.
• Substantial doubt exists about the company's ability to continue as a going concern without raising additional capital.
• The company is not in compliance with NYSE American listing standards regarding stockholders' equity and must regain compliance by April 8, 2027.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging report, highlighting persistent operating losses, significant liquidity concerns, and a clear risk of NYSE American delisting, despite some revenue growth and cost containment.

Positives

• Net loss improved to $5.7 million in 2025 from $6.8 million in 2024, representing a 16% improvement in loss from operations.
• Total net sales increased by 4% to $8.97 million in 2025 compared to $8.63 million in 2024.
• International dental sales increased by 9% year-over-year.
• Domestic medical handpiece sales increased, contributing to higher medical sales of $183,250 in 2025 compared to $104,620 in 2024.
• Operating expenses decreased by 9% to $12.1 million in 2025 due to cost containment efforts.
• Successful implementation of additional controls and process enhancements for QMSR compliance, which became effective February 2, 2026.
• MDR certification for Class IIa and Class IIb devices is expected in 2027, ensuring continued market access in the European Union.
• Appointment of Eric Hines as President and Chief Executive Officer, and Jason Papes as Senior Vice President, Global Head of Sales and Marketing, strengthening leadership.
• The Board determined Benedetta Casamento is an audit committee financial expert and independent, enhancing financial oversight.

Negatives

• Incurred significant losses since inception, with a net loss of $5.72 million in 2025 and $4.71 million in 2024.
• Accumulated deficit of $133.78 million as of December 31, 2025.
• Substantial doubt exists about the company's ability to continue as a going concern without raising additional capital.
• Cash and cash equivalents decreased significantly from $3.26 million in 2024 to $1.11 million in 2025.
• Not in compliance with NYSE American listing standards (stockholders' equity below $4 million and $6 million thresholds) and faces potential delisting if compliance is not regained by April 8, 2027.
• Gross margin declined to 71% in 2025 from 75% in 2024.
• Domestic U.S. dental sales decreased by 7% year-over-year.
• Delayed research and development efforts related to the next-generation Single Tooth Anesthesia System instrument during 2025.
• Heavy reliance on third-party manufacturers with informal purchase order arrangements, exposing the company to supply risks.
• Exposure to economic, environmental, and political conditions in China, where the sole manufacturer of dental handpieces is located.
• A significant portion of sales is reliant on a single product category (dental), making the company vulnerable to demand decline.
• The company has never paid cash dividends and does not intend to in the foreseeable future, meaning capital appreciation is the sole source of gain for stockholders.

Risks

• History of significant operating losses and inability to predict future profitability.
• Need for additional funding and potential inability to raise capital when needed, which may force delays or elimination of commercialization efforts.
• Sales of a substantial number of common stock shares, or the perception of such sales, may adversely impact stock price.
• Raising additional capital through equity issuance may cause dilution to existing stockholders.
• Debt financing could restrict operations or require relinquishing proprietary rights.
• Financial institution instability could adversely affect operations and financial condition, including delayed access to or loss of uninsured deposits.
• Reliance on E-commerce platform exposes to risks like refunds, customer disputes, online security breaches, poor search engine visibility, and regulatory changes.
• Exposure to risks inherent in international sales, including foreign currency fluctuations, political instability, tariffs, and challenges in obtaining approvals.
• Ability to generate revenue from CompuFlo Epidural System will be materially impaired if physicians do not accept or use it.
• Decline in demand for the single product category (dental) could significantly impact net sales and gross margins.
• Risk that existing or future technologies may not function as intended or gain market acceptance.
• Failure to successfully develop, commercialize, or sell new or enhanced products or penetrate new markets.
• Developments by competitors may render products or technologies obsolete or non-competitive.
• Uncertainty regarding reimbursement from governmental agencies and private payers could diminish revenue.
• Healthcare reform laws and regulations (e.g., ACA, IRA, OBBBA) could prevent or delay marketing approval, restrict post-approval activities, and affect profitability.
• Loss of market advantage earlier than expected due to limited patent protection or challenges to intellectual property rights.
• Inability to attract and retain qualified employees, especially key management and technical personnel.
• Exclusive reliance on third-party manufacturers, informal manufacturing arrangements, and disruptions at manufacturing facilities (including in China) expose to supply risks, pricing changes, and quality issues.
• Issues with product quality could lead to regulatory actions, loss of customer confidence, and reduced sales.
• Dependence on a limited number of suppliers for components and raw materials, without long-term supply agreements.
• Failure to comply with domestic and international government regulations, including QMSR and MDR, could lead to enforcement actions, fines, and product recalls.
• Subject to U.S. federal and state healthcare fraud and abuse and false claims laws and regulations, including Anti-Kickback Statute and False Claims Act.
• Certain product modifications may require new FDA 510(k) clearances, potentially leading to recalls or marketing cessation.
• Changes in U.S. federal and state regulatory agencies may cause disruptions and delays in approval processes.
• Risk of enforcement actions for improper marketing or promotion of products.
• Changes in laws and regulations, including trade policy (tariffs, import/export), can significantly affect business.
• Regulatory uncertainty following recent federal developments (e.g., Loper Bright Enterprises v. Raimondo overturning Chevron Doctrine).
• International conflict (Ukraine/Russia, Middle East) can disrupt supply chains and decrease international sales.
• Geopolitical instability, labor unrest, and economic disruptions in foreign jurisdictions (e.g., Venezuela) may indirectly affect operations.
• Company is effectively controlled by a limited number of stockholders (BP4, Srl owns 11.05%).
• Inability to regain compliance with NYSE American listing requirements may lead to delisting, impairing stock liquidity and price.
• Reliance on stock sales for funding, with potential for costly or dilutive additional financing due to low trading volume, stock price, and market capitalization.
• Failure to implement effective internal controls required by Sarbanes-Oxley Act could result in material misstatements.
• Volatile market price of common stock, influenced by various factors beyond control.
• Provisions in corporate documents and Delaware law might discourage, delay, or prevent a change in control.
• Percentage of ownership may be diluted in the future due to equity issuances.
• Cybersecurity incidents, data breaches, or system disruptions could compromise products, data, and operations.
• Inadequate or unavailable insurance coverage for product liability losses.

Future Outlook

The company anticipates continued operating losses and will need additional funding to finance operations. It aims to generate positive cash flows by increasing revenue from its dental business worldwide and its medical devices and disposables business, while also reducing operating expenses. The company plans to expand the global footprint of its CompuFlo Epidural and CathCheck systems through targeted sales and strategic distribution partnerships. Development of new product applications for its Dynamic Pressure Sensing (DPS) technology platform is being explored but is subject to significant technical, clinical, regulatory, and commercial risks, requiring substantial research, regulatory clearance, and market acceptance.

Management Comments

• Management has developed plans intended to improve liquidity and operating results, including initiatives to increase revenues, reduce professional and consulting expenses, and defer certain discretionary expenditures, including delaying research and development activities related to the next-generation Single Tooth Anesthesia System instrument.
• Management has concluded that substantial doubt exists about the Company's ability to continue as a going concern within one year after the issuance date of these financial statements.
• The Board of Directors believes that the separation of the roles of Chairman of the Board and Chief Executive Officer provides for effective corporate governance and appropriate checks and balances with respect to the Company's leadership and oversight.
• The Board believes that an effective risk management framework is designed to: Identify and assess material risks in a timely manner; Communicate material risk information to senior management and, as appropriate, to the Board and its committees; Develop and implement appropriate risk mitigation strategies; Integrate risk considerations into the Company's strategic planning and decision-making processes.

Industry Context

StockSavvy.ai notes that Milestone Scientific operates in the highly competitive medical device industry, characterized by rapid technological change and significant R&D investment. The company's focus on computer-controlled drug delivery systems with DPS technology aims to differentiate it from traditional hypodermic syringe technology and other C-CLAD systems. The increasing regulatory scrutiny and healthcare reform measures, such as the Inflation Reduction Act and state-level drug pricing controls, present a challenging reimbursement environment for medical device companies. The company's reliance on third-party manufacturing, particularly in China, exposes it to geopolitical and supply chain risks common in the globalized medical device sector.

Comparison to Industry Standards

• Milestone Scientific was the first company to commercialize a product designed to deliver a virtually painless subcutaneous injection in 1997, establishing a new category of computer-controlled drug delivery systems.
• The company's proprietary Dynamic Pressure Sensing (DPS) technology is differentiated by providing continuous real-time audible and visual pressure feedback throughout the entire needle insertion process, unlike competing devices such as the EpiFaith syringe, Episure syringe, Epidrum device, and the EpiFinder system.
• The Wand/STA System, along with its predecessors, has been used to administer more than 95 million injections globally since its commercial introduction in early 2007, indicating significant adoption compared to other computer-controlled local anesthesia delivery (C-CLAD) systems like Soan, Quicksleeper, SleeperOne, Dentapen by Septodont, Anaeject by Septodont, the Calaject system by Aseptico, and the Comfort Control Syringe by Dentsply Sirona.
• 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.

Management Changes

Corporate Governance

Related Party Transactions

• Supply agreement with United Systems (principal supplier of handpieces): Purchases totaled approximately $1.9 million in 2025 and $1.7 million in 2024. Amounts owed to United Systems were approximately $1.1 million as of December 31, 2025, and $664,000 as of December 31, 2024.
• Royalty and consulting fees paid to the Director of Clinical Affairs: Royalty expense totaled approximately $445,000 in 2025 and $442,000 in 2024. Consulting fees totaled approximately $128,000 in 2025 and $156,000 in 2024. Accrued but unpaid royalties were approximately $289,000 in 2025 and $110,000 in 2024.
• Leonard Osser's Employment and Consulting Agreements: Compensation of $200,000 for each agreement was recorded in both 2025 and 2024. He is entitled to a lump sum upon termination without cause or for good reason.
• Leonard Osser's Option Grant: Granted options to purchase 2,000,000 shares of common stock in May 2021. He beneficially owns 2,844,028 shares and 3,221,786 shares are issuable upon termination of his employment agreement.
• Purchases by University Pain Medicine Center (STEMMEE), where Dr. D. Demesmin (a company board member) is CEO: Purchased medical products of $54,000 in 2025 and $21,000 in 2024. The company was owed approximately $25,500 as of December 31, 2025.
• Jan Adriaan (Arjan) Haverhals' Consulting Agreement: Consulting fees of approximately $350,000 were recorded in 2025. The company owed Mr. Haverhals approximately $89,000 as of December 31, 2025, with $66,000 subsequently waived. He is entitled to receive 912,736 shares of common stock six months following his resignation as CEO.
• Promissory notes issued to directors: On April 9, 2025, the company issued promissory notes totaling $800,000 to Mr. Neal Goldman, Ms. Benedetta Casamento, and Dr. Didier Demesmin. These notes are due April 9, 2028, bear interest at prime less 2.50%, and are convertible into common stock at a price not less than $0.50 per share.
• Amended and Restated Memorandum of Understanding (MOU) with Innovest S.p.A., as the holder of certain consent and blockage rights with respect to BP4 S.r.l. (a significant shareholder): The MOU contemplated a $2.5 million offering by the company, with BP4 agreeing to a 12-month lock-up, but the period for this capital raise has expired.

Stakeholder Impact

• Shareholders: Face significant dilution risk from future capital raises, potential loss of investment due to continued losses and delisting risk, and no expectation of cash dividends. BP4 S.r.l. (11.05% ownership) has substantial control, which could delay or prevent changes in control.
• Employees: Impacted by lower headcount and related personnel costs (salaries decreased by 17% in 2025), but also benefit from stock-based compensation. The company's ability to attract and retain qualified personnel is crucial for future success.
• Customers (Dental & Medical): Continued availability of products (CompuDent, STA, CompuFlo Epidural System) but potential for supply disruptions due to reliance on third-party manufacturers. Market acceptance of new medical products is critical for revenue generation.
• Suppliers: United Systems is a principal supplier with significant purchases, indicating a strong relationship but also concentration risk. Other suppliers face potential for changes in arrangements and supply chain disruptions.
• Creditors: Directors provided $800,000 in convertible notes, indicating some confidence but also a related-party debt structure. The company's going concern risk is a significant concern for all creditors, as it impacts the ability to meet future obligations.

Next Steps

• Regain compliance with NYSE American listing standards by April 8, 2027, to avoid delisting.
• Pursue additional funding to finance operations and achieve positive cash flows.
• Increase revenue from dental business worldwide.
• Generate revenue from medical devices and disposables business in the United States and worldwide.
• Reduce operating expenses through continued cost containment initiatives.
• Evaluate opportunities to expand distribution channels, including e-commerce and third-party distributor relationships.
• Pursue additional regulatory clearances and commercial opportunities in domestic and international markets.
• Manage MDR transition activities to obtain certification for Class IIa and Class IIb devices by December 31, 2028.
• Continue to invest in improving existing products, developing new technologies, and expanding into adjacent markets.
• Complete remaining actions to support compliance with the Quality Management System Regulation (QMSR) by its effective date (February 2, 2026).

Key Dates

Recommendation

The company faces severe financial distress, evidenced by persistent operating losses, a substantial accumulated deficit, and critically low cash reserves. The explicit 'substantial doubt about the company's ability to continue as a going concern' and non-compliance with NYSE American listing standards, leading to potential delisting, are red flags for any investor. While there was a slight improvement in net loss and revenue growth, these are overshadowed by declining gross margins, significant cash burn from operations, and a heavy reliance on external financing that may not be available on favorable terms. The delay in R&D for a next-gen product and the expiration of a contemplated capital raise further highlight operational and financial challenges. The concentration of manufacturing in China and dependence on a single product category add to the risk profile. Given these fundamental weaknesses and existential threats, a seasoned investor would likely recommend a strong sell.

Keywords

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