MLSS.AMEXMilestone Scientific INC
DEF: Milestone Scientific Sets 2025 Annual Meeting Agenda
Sentiment:
Definitive Proxy Statement
Milestone Scientific Inc. announced its 2025 Annual Meeting of Stockholders to be held virtually on December 18, 2025, to vote on director elections, an increase in authorized shares, and auditor ratification.
Capital raiseOn April 9, 2025, the company issued $800,000 in unsecured promissory notes to three directors: Neal Goldman, Benedetta Casamento, and Dr. Didier Demesmin.The notes are due April 9, 2028, bear interest at prime less 2.50% annually, and are payable in cash and/or shares at the company's discretion.The notes are convertible into common stock by the holder at any time and by the company at maturity, with a conversion rate at fair value, not less than $0.50 per share.A special repayment clause allows holders to request repayment in cash/shares if the company sells equity for gross proceeds exceeding $4,000,000, limited by net proceeds above $4,000,000 after other indebtedness and specified uses.
Worse than expectedNet income for 2024 was a loss of $(4,713,597), although an improvement from 2023's loss of $(6,929,104), it still represents negative profitability.Total Shareholder Return (TSR) decreased from $150.00 in 2023 to $137.14 in 2024, indicating a decline in shareholder value over the period.
Summary
- The Annual Meeting of Stockholders is scheduled for December 18, 2025, at 9:00 a.m. ET, and will be held virtually.
- Stockholders of record as of November 4, 2025, are entitled to notice of and to vote at the Meeting.
- Key proposals include the election of six directors, an amendment to increase authorized common stock from 100,000,000 to 125,000,000 shares, and the ratification of CBIZ CPAs P.C. as independent auditors for fiscal year 2025.
- The Board of Directors recommends a vote "FOR" all proposals.
- As of November 4, 2025, there were 78,628,913 outstanding shares of common stock.
- The company reported a net loss of $(4,713,597) for 2024, an improvement from $(6,929,104) in 2023.
- Total Shareholder Return (TSR) based on an initial $100 investment was $137.14 in 2024, down from $150.00 in 2023.
Sentiment
Score: 4
Explanation: The filing outlines routine corporate governance matters and a proposal to increase authorized shares, which carries potential dilution. While the net loss improved, the company remains unprofitable, and TSR declined. The related-party financing through promissory notes to directors, while providing capital, could be viewed with caution by investors.
Positives
- Net loss decreased from $(6,929,104) in 2023 to $(4,713,597) in 2024, indicating an improvement in financial performance.
- The company has a clear corporate governance structure with separate Chairman and CEO roles, enhancing oversight.
- The Board has a clawback policy for executive compensation tied to financial reporting measures, promoting accountability.
- The appointment of new CEO Eric Hines and new directors with medical and business expertise could strengthen leadership and strategic direction.
Negatives
- The company continues to report a net loss, with $(4,713,597) in 2024, indicating ongoing unprofitability.
- Total Shareholder Return (TSR) decreased from $150.00 in 2023 to $137.14 in 2024, suggesting a decline in shareholder value.
- The proposed increase in authorized shares could lead to future dilution for existing stockholders if new shares are issued.
- The company issued $800,000 in unsecured promissory notes to directors in April 2025, which could raise concerns about related-party financing and potential future dilution if converted to stock.
Risks
- China operation risk.
- Liquidity/capital accessibility risk.
- Medical product acceptance risk.
- Operational risk.
- Potential dilution of existing stockholders' equity ownership and negative impact on stock price from future issuance of additional authorized shares.
- The use of additional authorized shares could be used to oppose hostile takeover attempts, potentially entrenching current management.
Future Outlook
The company intends to use the increased authorized shares for future potential business needs, including public or private financings, stock splits, strategic transactions, and other general corporate purposes. There are no current plans or commitments for the issuance of these additional shares, but having them available will allow for prompt action without requiring further stockholder approval for specific issuances.
Management Comments
- "The Board believes that the segregation of the roles of Board Chairman and the Chief Executive Officer ensures better overall governance of the Company and provides meaningful checks and balances regarding its overall performance."
- "The Board believes an effective risk management system will (1) timely identify the material risks that we face; (2) communicate necessary information with respect to material risks to senior executives and, as appropriate, to the Board or relevant Board committee; (3) implement appropriate and responsive risk management strategies consistent with the Company’s risk profile; and (4) integrate risk management into the Company’s decision-making."
- "The primary objective of the executive compensation program is to attract and retain qualified, energetic managers who are enthusiastic about the mission and culture of Milestone Scientific."
Industry Context
The company operates in the medical device and interventional pain therapy sectors, as evidenced by the background of its new directors and related party transactions. The appointment of directors with expertise in interventional pain management and medical devices, such as Dr. Didier Demesmin, Shanth Thiyagalingam (CEO of PainTEQ), and Dr. Dawood Sayed, suggests a strategic focus on these growing areas. The company's engagement with suppliers like United Systems for handpieces and its historical involvement with dental products indicate a diversified approach within healthcare technology.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chairman of the Board | Neal Goldman | Benedetta Casamento | Upon election at Annual Meeting | Board recommendation and succession plan. |
| Vice Chairman of the Board | NA | Neal Goldman | Upon election at Annual Meeting | Board recommendation and succession plan. |
| President, Chief Executive Officer and Director | Jan Adriaan (Arjan) Haverhals | Eric Hines | 2025-07-31 | Succession plan; Jan Adriaan (Arjan) Haverhals retired as CEO on December 31, 2024. |
| Chief Financial Officer | NA | Peter Milligan | 2023-02-01 | Appointment. |
| Chief Financial Officer | Peter Milligan | NA | 2023-09-01 | Resignation. |
| Director | NA | Dr. Didier Demesmin | 2024-01-01 | Appointment to Board. |
| Director | NA | Shanth Thiyagalingam | 2025-01-01 | Appointment to Board. |
| Director | NA | Dr. Dawood Sayed | 2025-01-01 | Appointment to Board. |
| Vice Chairman and Director | Leonard Osser | NA | 2025-11-07 | Resignation after not being re-nominated. |
| Director | Gian Domenico Trombetta | NA | 2025-01-12 | Resignation. |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Board Leadership Structure | The Board maintains separate roles for Chairman and Chief Executive Officer to ensure better overall governance and checks and balances. | Ongoing | Enhances oversight, allows CEO to focus on business plans, and Chairman to lead oversight and advisory roles. |
| Risk Management Oversight | The Board actively oversees risk management, focusing on identifying material risks, communicating information, implementing strategies, and integrating risk management into decision-making. | Ongoing | Aims to mitigate risks such as China operation, liquidity/capital accessibility, medical product acceptance, and operational risks. |
| Director Independence | A majority of the Board's directors (Benedetta Casamento, Neal Goldman, Dr. Dawood Sayed, and Shanth Thiyagalingam) are determined to be independent under NYSE American listing standards. | As of Proxy Statement date | Ensures objective decision-making and compliance with regulatory requirements. |
| Clawback Policy | Adopted a written policy to recover excess compensation granted, earned, or vested based on financial reporting measures requiring restatement, regardless of executive misconduct. | Adopted | Increases accountability for executive compensation tied to financial performance and protects shareholder interests in case of financial misstatements. |
| Insider Trading and Hedging Policy | Prohibits directors, officers, and employees from engaging in short sales, holding securities in margin accounts, or pledging securities as collateral for a loan. Includes blackout periods and pre-clearance requirements. | Adopted | Designed to promote compliance with insider trading laws and prevent conflicts of interest or misuse of material non-public information. |
| Code of Ethics | Adopted a code of ethics applicable to directors, principal executive officer, principal financial officer, and similar functions, posted on the company's website. | Adopted | Establishes ethical guidelines and promotes a culture of integrity within the company. |
Related Party Transactions
- Supply agreement with United Systems (principal supplier of handpieces): Purchases of $1.7 million in 2024 and $2.3 million in 2023. Owed $664,000 as of December 31, 2024.
- Royalty Sharing Agreement with Leonard Osser (former Interim CEO, Vice Chairman, and Director) for 2.5% royalty on net sales of dental products beginning May 9, 2027.
- Consulting and Employment Agreements with Leonard Osser, with expenses of $200,000 for each agreement in 2024 and 2023.
- Consulting agreement with Jan Adriaan (Arjan) Haverhals (former CEO) commencing January 1, 2025, with an annual fee of $350,000 and future issuance of 895,012 shares.
- Purchases of medical products totaling $21,000 in 2024 by University Pain Medicine Center, where Dr. D. Demesmin (a company board member) is CEO.
- Promissory notes totaling $800,000 issued to directors Neal Goldman, Benedetta Casamento, and Dr. Didier Demesmin on April 9, 2025.
- Royalty fees of $442,000 in 2024 and $485,000 in 2023, and consulting fees of $156,000 in both years, paid to the Director of Clinical Affairs (Mark Hochman). Owed $110,000 as of December 31, 2024.
Stakeholder Impact
- Shareholders: Will vote on key governance matters including director elections and an increase in authorized shares, which could lead to dilution. The decline in TSR in 2024 may concern existing shareholders. The issuance of promissory notes to directors could be viewed as a related-party financing that may or may not be in the best interest of all shareholders.
- Employees/Management: Executive compensation structure aims to attract and retain qualified managers. New CEO Eric Hines has a structured compensation package. The clawback policy impacts executive officers.
- Customers: The company's focus on medical product acceptance and the involvement of directors with medical backgrounds suggest an ongoing commitment to product development and market penetration.
- Suppliers: United Systems remains a key supplier with a long-term agreement, indicating stable supply chain relationships.
- Creditors: The issuance of unsecured promissory notes to directors adds to the company's debt obligations, though it provides capital.
Next Steps
- Stockholders to vote on the election of six directors at the Annual Meeting on December 18, 2025.
- Stockholders to vote on amending the Restated Certificate of Incorporation to increase authorized common stock to 125,000,000 shares.
- Stockholders to vote on the ratification of CBIZ CPAs P.C. as independent auditors for fiscal year 2025.
- If approved, the company intends to file a Certificate of Amendment with the Delaware Secretary of State to increase authorized shares.
- The new CEO, Eric Hines, will transition to a higher base compensation rate of $25,000 per month from January 1, 2026.
- Leonard Osser's royalty sharing agreement with the company will begin on May 9, 2027.
- Arjan Haverhals will be issued 895,012 shares of company stock ninety days after the termination of his consulting relationship.
Key Dates
| Date | Description |
|---|---|
| 2005-01-01 | Original date of Technology Sale Agreement with Mark and Claudia Hochman. |
| 2006-03-01 | Dr. Didier Demesmin began as Director of the Pain Management Department at St. Peters University Hospital. |
| 2006-08-01 | Dr. Didier Demesmin began as Clinical Instructor at Rutgers Robert Wood Johnson Medical School. |
| 2007-03-01 | Dr. Didier Demesmin began as physician at JFK Medical Center. |
| 2007-08-01 | Benedetta Casamento began serving as a consultant and board member. |
| 2008-01-01 | Dr. Didier Demesmin began as physician at Robert Wood Johnson University Hospital. |
| 2009-02-01 | Dr. Didier Demesmin began as physician at Somerset Medical Center. |
| 2009-03-01 | Benedetta Casamento served as Executive Vice President, Finance & Operations of The Talbots, Inc. |
| 2010-01-01 | Dr. Didier Demesmin became a member of the Middlesex County Medical Society of New Jersey. |
| 2010-09-01 | Dr. Didier Demesmin became a member of the Board of Trustees of the New Jersey Society of Interventional Pain Physicians. |
| 2010-12-01 | Dr. Didier Demesmin began as physician at Hudson Regional Hospital. |
| 2011-06-01 | Dr. Didier Demesmin held position of President Elect of Middlesex County Medical Society of New Jersey. |
| 2012-06-01 | Dr. Didier Demesmin held position of President of Middlesex County Medical Society of New Jersey. |
| 2012-07-01 | Benedetta Casamento served as a consultant to private equity firms. |
| 2013-07-01 | Dr. Didier Demesmin became Clinical Assistant Professor at Rutgers Robert Wood Johnson Medical School. |
| 2013-11-01 | Dr. Didier Demesmin began as physician at Saint Barnabas Hospital. |
| 2013-12-01 | Dr. Didier Demesmin became Medical Director at St. Peters University Hospital. |
| 2014-12-01 | Benedetta Casamento served as Chief Executive Officer of Calypso St. Barth. |
| 2016-06-01 | Benedetta Casamento served as Chairman and President of Allyke, Inc. |
| 2019-01-01 | Neal Goldman became a director of Milestone Scientific. |
| 2021-02-25 | Addendum to Technology Sale Agreement with Hochmans to reduce royalty payments. |
| 2021-03-02 | Royalty Sharing Agreement with Leonard Osser entered into. |
| 2021-04-06 | Succession Agreement with Leonard Osser to restructure agreements and become Vice Chairman. |
| 2021-05-19 | Leonard Osser resigned as Interim CEO and assumed role of Vice Chairman of the Board. |
| 2021-06-01 | Company signed a ten-year supply agreement with United Systems. |
| 2021-12-31 | Company formerly had an ownership interest in Milestone China, terminating in 2021. |
| 2022-04-01 | Benedetta Casamento became a director of the Company. |
| 2022-10-01 | Marcum LLP became the company's auditing firm. |
| 2023-02-01 | Peter Milligan appointed as Chief Financial Officer. |
| 2023-08-24 | Company announced Peter Milligan's resignation. |
| 2023-09-01 | Peter Milligan's resignation from the Company became effective. |
| 2023-12-31 | Fiscal year end for which financial metrics and compensation are reported. |
| 2024-01-01 | Neal Goldman became Chairman of the Board. |
| 2024-02-01 | University Pain Medicine Center (Dr. D. Demesmin) agreed to purchase products from the Company. |
| 2024-04-01 | Dr. Didier Demesmin became a director of Milestone Scientific. |
| 2024-04-25 | CBIZ CPAs P.C. became the independent registered public accounting firm after combining with Marcum LLP. |
| 2024-05-28 | Date used for calculating beneficial ownership percentages. |
| 2024-12-31 | Fiscal year end for which financial metrics, compensation, and equity awards are reported. Arjan Haverhals retired as CEO. |
| 2025-01-01 | Arjan Haverhals' consulting agreement commenced. Shanth Thiyagalingam and Dr. Dawood Sayed became directors of Milestone Scientific. |
| 2025-01-12 | Gian Domenico Trombetta resigned as director. |
| 2025-04-09 | Company issued $800,000 in promissory notes to directors. |
| 2025-07-31 | Eric Hines became President, Chief Executive Officer, and a director. |
| 2025-10-31 | Close of business date for outstanding shares and shares issuable for authorized shares proposal. |
| 2025-11-04 | Record date for determining stockholders entitled to notice and vote at the Annual Meeting. |
| 2025-11-07 | Leonard Osser resigned as Vice Chairman and Director. Proxy Statement, proxy card, and Notice of Annual Meeting intended to be mailed. |
| 2025-11-12 | Date of the Proxy Statement. |
| 2025-12-17 | Deadline for Internet voting (11:59 p.m. ET). |
| 2025-12-18 | Date of the Annual Meeting of Stockholders. |
| 2025-12-31 | Fiscal year end for which CBIZ CPAs P.C. is appointed independent auditor. End of Eric Hines' initial base compensation term. |
| 2026-01-01 | Eric Hines' extended base compensation term begins. Deadline for stockholder proposals for the 2026 Meeting to be included in proxy materials. |
| 2027-05-09 | Date when Leonard Osser's royalty sharing agreement begins, and Hochmans' royalty payments reduce. |
| 2028-04-09 | Maturity date for promissory notes issued to directors. |
| 2030-12-01 | Expiration of the 2020 Stock Option Plan. |
Recommendation
holdThe company is undergoing significant management changes, including a new CEO and shifts in board leadership, which could bring fresh strategic direction. While the net loss improved in 2024, the company remains unprofitable, and the decline in Total Shareholder Return is a concern. The proposal to increase authorized shares, while providing flexibility for future growth or financing, also carries the risk of dilution. The related-party financing through promissory notes to directors, while providing capital, warrants careful monitoring. Given the ongoing unprofitability and potential for dilution balanced against new leadership and strategic focus in the medical device sector, a 'hold' recommendation is appropriate as investors await clearer signs of sustained financial improvement and the impact of new strategic initiatives.
Keywords
Milestone Scientific, MLSS, Proxy Statement, Annual Meeting, Director Election, Authorized Shares, Corporate Governance, Executive Compensation, SEC Filing, Medical Devices, Pain Management, Dental Technology, Shareholder Vote, Capital Raise
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