Note 1 - Organization and Business
|6 Months Ended|
Jun. 30, 2017
|Notes to Financial Statements|
|Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]||
1- ORGANIZATION and BUSINESS
All references in this report to “Milestone Scientific,” “us,” “our,” “we,” or “Milestone” refer to Milestone Scientific Inc., and its consolidated subsidiaries, Wand Dental, Milestone Advanced Cosmetic, Milestone Medical, and Milestone Education (all described below), unless the context otherwise indicates. Milestone Scientific is the owner of the following registered U.S. trademarks: C
ompuDent®; CompuMed®; CompuFlo®; DPS Dynamic Pressure Sensing Technology®; Milestone Scientific ®; the Milestone logo ®; SafetyWand®; STA Single Tooth Anesthesia System®; and The Wand ®.
Milestone Scientific was incorporated in the State of Delaware in
August 1989.Milestone Scientific has developed a proprietary, computer-controlled anesthetic delivery instrument, through the use of
The Wand®, a single use disposable handpiece. The instrument is marketed in dentistry under the trademark
STA Single Tooth Anesthesia System®and in medicine under the trademark
CompuMed®. CompuDent®is suitable for all dental procedures that require local anesthetic.
CompuMed®is suitable for many medical procedures regularly performed in Plastic Surgery, Hair Restoration Surgery, Podiatry, Colorectal Surgery, Dermatology, Orthopedics and a number of other disciplines. The dental instruments are sold in the United States and in over
47countries abroad. To date there have been
nomedical instruments sold in the United States and limited amounts sold internationally, although certain medical instruments have obtained CE mark approval and can be marketed and sold in most European countries.
Milestone Scientific received
510(k) marketing clearance from the U.S. Food and Drug Administration (FDA) on the
CompuFlo® Epidural Computer Controlled Anesthesia System.
2015,our common stock was listed on the NYSE MKT LLC (“NYSE MKT”) under the ticker symbol “MLSS”.
June 2016,we raised
$2.0million of gross proceeds in a private placement of
one millionshares of common stock, at a price of
2016,Milestone Scientific initiated a share exchange program pursuant to which we exchanged
oneshare of common stock for every
twooutstanding shares of Milestone Medical, Inc. (described below) common stock, a previously consolidated variable interest entity. As a result of the exchange program, at
June 30, 2017,Milestone Scientific owned approximately
98%of Milestone Medical.
July 2016,Milestone Scientific raised gross proceeds of
$250,000in a registered direct offering of
104,200shares of common stock at
July 2016,Milestone Scientific filed for
510(k) marketing clearance with the FDA for the for the
CompuFlo® Computer Controlled Anesthesia System for both intra-articular and epidural injections. In
June 2017,the FDA approved the
CompuFlo® Epidural Computer Controlled Anesthesia System for epidural injections. Milestone Scientific is in the process of introductory meetings with medical device distributors within the United States and foreign markets.
focus is on marketing its epidural instrument throughout the world.
December 2016,we received notification from the FDA that based upon the
510(k) application submitted for the
notadequately document that the device met the equivalency standard required for
510(k) clearance. Following consultation with the FDA Office of Device Evaluation, we intend to provide additional data, which could include a new Human Factor Validation study (HFV Study) in support of a new
510(k) application for the device. An HFV Study demonstrates the ease of use of a product.
December 2016,we completed an underwritten public offering of
2,000,000shares of common stock and warrants to purchase up to
shares of common stock, including
92,775additional warrants pursuant to a partial exercise of the over-allotment option granted to the underwriters. The public offering price for each share and related warrant was
$1.50.The warrants have a
three-year term and an exercise price of
$2.55per share. The gross proceeds from this offering were approximately
$3,000,000,before deducting underwriting discounts and commissions and other offering expenses.
January 2017,in connection with Milestone Scientific public offering of shares in
December 2016,the underwriter of the offering exercised a portion of its over-allotment option and purchased an additional
123,700shares of common stock at the public offering price of
$1.499per share. The gross proceeds to Milestone Scientific from this exercise was approximately
$186,000before deducting underwriting discounts and commissions and other offering expenses.
June 2017,Milestone Scientific entered into an agreement for the sale of its interest in Milestone China (a
40%) percent interest) (the “
Milestone China Shares”) to an unaffiliated United States domiciled purchaser and a
10-year option agreement to repurchase the Milestone China Shares. The purchase price for the Milestone China Shares was
$125,000was paid in cash and
$1,275,000was paid by delivery of a non-interest bearing secured promissory note. The note is payable in quarterly installments of
$125,000until paid in full and is secured by the Milestone China Shares until full repayment. In addition, pursuant to such note, the purchaser is precluded from selling all or substantially all of its assets prior to repayment of the note. The
10-year option agreement provides Milestone Scientific an option to repurchase the
40%equity interest at
twoyears and at fair value (as defined in such agreement) for the remainder of the
10-year term. The transaction has been accounted for as a secured financing and Milestone Scientific will continue to account for its relationship with Milestone China under the equity method of accounting. A note receivable is presented on the Balance Sheet, along with a deferral from financing transaction (
$1,400,000). The carrying value of the
40%) percent investment at the transaction date was zero. (See Note
Milestone Scientific has incurred operating losses and negative cash flows from operating activities in each year
since its inception, except for
2013.Milestone Scientific is actively pursuing the generation of revenue, positive operating income and net income. The capital raised in
January 2017provided Milestone Scientific with working capital to continue to develop and commercialize additional medical instruments and aggressively market its dental instruments throughout the world. Milestone Scientific is actively pursuing the generation of positive cash flows from operating activities through an increase in revenue from its dental business worldwide, the generation of medical instruments and disposables revenue in the United States (from epidural instruments following
June 2017FDA approval) and worldwide, and a reductions in operating expenses. Management believes that Milestone Scientific will have sufficient cash reserves to meet its anticipated obligations over the next
twelvemonth period following the issuance date of these financial statements. However, Milestone Scientific
mayneed to raise additional capital prior to management's expected generation of sustainable positive cash flow from operating activities including the dental business expected growth and the medical business launch to support medical instrument revenue.
The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.
Reference 1: http://www.xbrl.org/2003/role/presentationRef