Milestone Scientific(MLSS) - 2025 Q1 - Quarterly Report

Part I Item 1. Condensed Consolidated Financial Statements Milestone Scientific reported $9.1 million total assets, a $2.0 million net loss, and $1.0 million cash used in operations for Q1 2025, with going concern risk noted Condensed Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $9.1 million, liabilities increased to $4.6 million, and stockholders' equity decreased to $4.5 million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,246,387 | $3,258,058 | | Total current assets | $8,624,926 | $9,286,554 | | Total assets | $9,088,016 | $9,797,072 | | Total current liabilities | $4,443,633 | $3,744,127 | | Total liabilities | $4,625,564 | $3,964,372 | | Total stockholders' equity | $4,462,452 | $5,832,700 | Condensed Consolidated Statements of Operations Q1 2025 product sales were flat at $2.2 million, but increased operating expenses led to a wider net loss of $2.0 million compared to $1.4 million in Q1 2024 Condensed Consolidated Statements of Operations (Unaudited) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Product sales, net | $2,232,420 | $2,248,845 | | Gross profit | $1,647,435 | $1,676,103 | | Total operating expenses | $3,645,288 | $3,141,171 | | Loss from operations | $(1,997,853) | $(1,465,068) | | Net loss | $(1,994,586) | $(1,440,529) | | Net loss per share | $(0.02) | $(0.02) | Condensed Consolidated Statements of Cash Flows Q1 2025 saw $1.0 million cash used in operations, an improvement from Q1 2024, with minimal investing/financing activities, resulting in cash decreasing to $2.2 million Summary of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,008,089) | $(1,218,128) | | Net cash (used in) provided by investing activities | $(1,304) | $2,004,463 | | Net cash (used in) provided by financing activities | $(2,278) | $241,429 | | Net (decrease) increase in cash | $(1,011,671) | $1,027,764 | | Cash and cash equivalents at end of period | $2,246,387 | $4,005,477 | Notes to Condensed Consolidated Financial Statements Notes disclose a going concern warning due to $130.0 million accumulated losses, mitigated by cost-cutting and recent financing, with Dental segment profitable and Medical segment losing - The company has incurred total losses of $130.0 million since inception and had an operating loss of approximately $2.0 million for Q1 2025, raising substantial doubt about its ability to continue as a going concern[20] - Management's plans to alleviate the going concern doubt include increasing revenues, decreasing professional fees, delaying R&D on the next-generation STA system, and securing $800,000 in related-party note financing in April 2025[21] Segment Operating Performance - Q1 2025 vs Q1 2024 | Segment | Product Sales, Net (Q1 2025) | Operating Income (Loss) (Q1 2025) | Product Sales, Net (Q1 2024) | Operating Income (Loss) (Q1 2024) | | :--- | :--- | :--- | :--- | :--- | | Dental | $2,181,170 | $179,354 | $2,241,425 | $625,510 | | Medical | $51,250 | $(421,250) | $7,420 | $(500,857) | | Corporate | - | $(1,755,957) | - | $(1,589,721) | - In April 2025, the company issued $800,000 in promissory notes to three company directors to provide financing, with notes due in 2028 and convertible into common stock[77][82] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 flat revenues at $2.2 million, net loss widening to $2.0 million due to increased SG&A and R&D, reiterating going concern risk and mitigation plans Results of Operations Q1 2025 consolidated revenue was flat at $2.2 million, gross profit marginally decreased, while SG&A and R&D expenses significantly rose, leading to a $2.0 million operating loss Sales by Segment (Q1 2025 vs Q1 2024) | Segment | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Dental | $2,181,170 | $2,241,425 | $(60,255) | | Medical | $51,250 | $7,420 | $43,830 | | Total sales, net | $2,232,420 | $2,248,845 | $(16,425) | - SG&A expenses increased by approximately $221,000, primarily due to a $368,000 rise in professional fees, warehousing, and travel expenses, partially offset by an $81,000 decrease in salaries and benefits[100] - R&D expenses increased by approximately $275,000, mainly related to the development of the next-generation STA Single Tooth Anesthesia System, a project since delayed[101] Liquidity and Capital Resources Liquidity is strained, with cash decreasing to $2.2 million in Q1 2025, and $130.0 million accumulated losses raising going concern doubt, which management plans to mitigate via revenue growth, cost reduction, and recent financing Cash Flow Summary (Q1 2025 vs Q1 2024) | Cash Flow Activity | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,008,089) | $(1,218,128) | | Net cash (used in) provided by investing activities | $(1,304) | $2,004,463 | | Net cash (used in) provided by financing activities | $(2,278) | $241,429 | - The company's ability to continue as a going concern is in substantial doubt due to accumulated losses and negative operating cash flows, with cash at approximately $2.2 million and working capital of $4.2 million as of March 31, 2025[107] - Management believes that existing cash, combined with plans to increase revenue, decrease fees, and the $800,000 in related-party financing from April 2025, will be sufficient to fund operations for the next twelve months[108] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," the company is not required to provide quantitative and qualitative disclosures about market risk - As a "smaller reporting company," Milestone Scientific is not required to provide information regarding quantitative and qualitative disclosures about market risk[110] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[112] - No changes were made to the internal control over financial reporting during the three months ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, these controls[113] Part II Item 1A. Risk Factors The company faces material risks from changes in U.S. tariff and import/export regulations, particularly due to sourcing from China, and government actions impacting costs and R&D - The company faces risks from potential changes in U.S. trade policies, treaties, and tariffs, which could have a material adverse effect on business as it sources important product elements from China[115] - Government actions, including tariffs and reductions in research grants, could increase business costs, impede research and development activities with collaborative partners, and make raising capital more challenging[116] Other Items This section confirms no unresolved staff comments, cybersecurity incidents, unregistered equity sales, senior security defaults, or other material disclosures for the period - The company reports no unresolved staff comments (Item 1B), no cybersecurity incidents (Item 1C), and states that items concerning unregistered sales of equity securities (Item 2), defaults upon senior securities (Item 3), mine safety disclosures (Item 4), and other information (Item 5) are not applicable[117][118][119][120][121][122] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and Chief Accounting Officer certifications and Inline XBRL financial data files - The exhibits filed with this report include certifications from the Chief Executive Officer and Chief Accounting Officer, along with Inline XBRL instance and taxonomy documents[123]