Greetings, and welcome to the Milestone Scientific Third Quarter 2025 Financial Results and Business Update Call. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. David Waldman. Sir, the floor is yours.

Thank you. Good morning, and I appreciate everyone joining Milestone Scientific's Third Quarter 2025 Financial Results Conference Call. On the call with us today are Eric Hines, Chief Executive Officer; and Keisha Harcum, Vice President of Finance of Milestone Scientific. The company issued a press release yesterday after market containing third quarter 2025 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at (212) 671-1020. The company's management will now provide prepared remarks reviewing the financial and operational results for the third quarter ended September 30, 2025. Before we get started, we would like to remind everyone that during this conference call, we may make forward-looking statements regarding timing and financial impact of Milestone's ability to implement its business plan, expected revenue and future success. These statements involve a number of risks and uncertainties and are based on assumptions involving judgments with respect to 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 Milestone's control. Some of the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements are general economic conditions, failure to achieve expected revenue growth, changes in our operating expenses, adverse patent rulings, FDA or legal developments, competitive pressures, changes in customer and market requirements and standards and the risk factors detailed from time to time in Milestone's periodic filings with the Securities and Exchange Commission, including, without limitation, Milestone's report on Form 10-K for the year ended December 31, 2024, and Milestone's report on Form 10-Q for the third quarter ended September 30, 2025. The forward-looking statements made during this call are based upon management's reasonable belief as of today's date, November 14, 2025. Milestone undertakes no obligation to revise or update publicly any forward-looking statements for any reason. With that, I'll now turn the call over to Eric Hines, CEO of Milestone Scientific. Please go ahead, Eric.

Thank you, David. So good morning, folks, and thank you for all joining our call. We're very fortunate to have so many people who believe in Milestone Scientific, and we are making progress. During the third quarter, we continued to execute our plan to build a leaner, more focused organization capable of sustainable growth and improved profitability. Through disciplined cost management and operational restructuring, we reduced operating expenses by over $0.5 million compared to the same period last year, while maintaining stable revenue performance. These results reflect the early benefits of our transformational strategy, which is centered around 3 priorities: streamlining operations and driving efficiency, strengthening commercial execution in both dental and medical, and advancing our reimbursement and payer strategy to position CompuFlo for broad adoption in pain management. In our Dental segment, we made solid progress, expanding our direct sales programs in North America and advancing international registrations for our STA Single Tooth Anesthesia System. We have also enhanced our omnichannel marketing capabilities, and our maturing e-commerce platform continues to drive brand visibility and recurring customer engagement. International dental sales increased year-over-year, partially offsetting the decline in domestic revenue. On the Medical side, utilization of CompuFlo disposables rebounded slightly as we are starting to reenergize current customers, ensuring them that we are even more committed than ever as we continue to work on a structured and supported Medicare reimbursement strategy. We are particularly encouraged by feedback from leading pain centers domestically and internationally that are using CompuFlo to improve accuracy and safety and building confidence in epidural procedures. We also strengthened our organization through the addition of Dr. Dawood Sayed to our Board of Directors. Dr. Sayed is one of the country's foremost experts in interventional pain management and serves as Division Chief of Pain Medicine at the University of Kansas Medical Center. His appointment deepens our clinical and payer expertise and supports our strategy to accelerate adoption within hospital systems in integrated pain networks. In parallel, we continue to advance our reimbursement strategy for CompuFlo. And as we discussed last quarter, the system has secured Medicare payment rate assignments under CPT Code 0777T in 3 jurisdictions, supported by 2 MACs, Novitas and First Coast, that include large population states like New Jersey, Texas, and Florida. We are now building on that foundation, engaging with additional payers and expanding our commercial coverage footprint, essential steps for long-term medical growth. In summary, Q3 reflects disciplined execution and tangible progress toward our operational and commercial goals. We are in a more efficient organization. Our cost structure is leaner and our strategic priorities are sharply focused on growth and profitability. I'd also like to just point out that we'd like to invite you all to join our Instagram, Facebook, and TikTok pages. Our Instagram page is @the.wan.sta. Our Facebook handle is just the Wan STA. And our TikTok handle is @the.wan.sta. We continue to put tremendous energy into our omnichannel digital marketing strategy, and we believe that will drive more people to understand who we are as an organization. With that, I would like to turn it over to Keisha Harcum.

Thank you, Eric. For the 3 months and the 9 months ended September 30, 2025, revenue was $2.4 million and $6.9 million, respectively, compared to $2.5 million and $6.6 million for the same period in 2024. Gross profit for the 9 months ended September 30, 2025, and 2024, was approximately $4.9 million for each period, reflecting no material year-over-year change. The stable growth performance primarily resulted from consistent product margins, favorable manufacturing cost management, and a balanced sales mix between domestic and international markets. For the 3 months and 9 months ended September 30, 2025, SG&A expenses were $2.7 million and $9 million, respectively. Research and development expense for the same period was $16,000 and $437,000, respectively. Operating expenses were approximately $1.1 million and $4.6 million for the 3 and 9 months ended September 30, 2025, respectively. As of September 30, 2025, Milestone Scientific had cash and cash equivalents of approximately $1.3 million, and working capital of approximately $3.1 million. That concludes my financial review. I'll now turn the call back over to Eric.

Thank you, Keisha. As we move forward, our focus remains clear: to execute efficiently, grow revenue and position Milestone for long-term profitability. We are strengthening our sales infrastructure, enhancing customer engagement, and advancing the commercial rollout of CompuFlo through partnerships, payer engagement, and medical education. In Dental, we continue to leverage our strong brand and product differentiation to drive international growth and expand the recurring revenue through our direct and e-commerce channels. I'm really proud of the progress we've made in such a short time, reducing expenses, stabilizing revenue, and advancing the foundation for future growth. The path forward is about disciplined execution, operational excellence, and ensuring that we continue to build value for our shareholders, customers, and patients worldwide. I can't thank you all enough for joining this call today, and we will now open the lines for questions.

Our first question is coming from Anthony Vendetti with Maxim Group.

So Eric, it sounds like you're very focused on stabilizing the business, which obviously is something that has to be done when you first come in. And in terms of the Dental business, which still obviously drives the vast majority of the revenue. In this particular environment that we're in economically and Dental offices and Dental clinics have always been, I think, and just in my experience, very concerned about investing in new capital or buying new equipment. How do you convince them that this is a must-have product? And also if you could talk about the clinics that you're currently in, is there a target utilization rate or a way to ensure a certain level of utilization of your STA unit?

Thanks, Anthony. Those are great questions. And the Dental business is the foundation for the company, right? At the end of the day, 80 or 90 or even maybe higher than that percentage of the revenues come from the Dental business. What we are learning is that there's really 3 tiers of customers who are sort of low users, mid and high users. And we really believe that a big challenge for us in the marketplace in general is that when we moved over to the direct sales and e-commerce model, a lot of customers felt that we had really sort of gone out of business and didn't know a whole lot about us. And so we are spending a lot of time really reconnecting with old customers who maybe thought that we didn't exist anymore. But more importantly, really starting to expand our digital marketing to start to get to more dentists because a lot of times when we talk to dentists just in my hometown and what Jason speaks to them in Dallas, they don't even really know about the company or the Wand in general. So we think with 1.5% to 2% of the market share in the domestic market and more or less the same internationally, that it's mostly about getting the word out and really telling people about the benefits of the Wand. On the other side, education, right? So to move the low-end users to the high-end users. Typically, we find that the high-end users are spending about $2,500 to $3,000 per year with us on disposables. We need to get the others moving in that direction. And just by the nature of the name of the unit, the STA, the single-tooth anesthesia. What we've learned is many people are not using it for all the other injection types. And I think as most of the people know on this call, the Wand can do all of the injection types that a dentist needs during the course of operating their clinic. So we really need to do a better job of educating the low- and mid-tier users to make sure that they understand, and it's clear that the Wand can be used for many more procedures than just single tooth. I don't know if that covers what you asked me, Anthony, but let me know.

Yes. No, that's great. So there's an active effort to try to increase the utilization of the Wand within the current installed base as well as getting the word out. And like you said, there's a huge opportunity because you don't have a lot of penetration at this time, even though it's the vast majority of your business. On the Medical side, maybe I know you decided to refocus on the current clinics that are using it and building that base for broader commercialization. Can you tell us where the company is with that refocused effort and then the plan for broader commercialization? Is that something that's occurring in this quarter? Or is that more of a 2026 goal?

No, another good question, Anthony. And let me just want to one more thing on the dental. So Jason brought to me 11 objectives that he has for the Dental business moving forward from a sales perspective. So along with the education and so forth, we've got objectives to go after some of the dental schools. We've got the DSOs that are part of that mix. We've got the digital marketing to existing customers. We've got lists from our own distributors that we're now starting to go through and have discussions with those folks. So it's a kind of a multitiered program on the dental side that attacks 10 or 11 different objectives, including DSOs. But to answer your question on CompuFlo, and as I stated in the last conference call, what I felt when I stepped into this role is that we had a lot of things going in a lot of different directions. And really, the plan now is to focus our energy on a handful of states, a handful of jurisdictions but more importantly, to put the right structure in place to support the physicians once they start using CompuFlo. And even more importantly, is to collect the data in a very meticulous way so that we can share that to the Medicare folks from a reimbursement perspective. We also plan to attack the commercial side of that equation as well. So in parallel to Medicare, we also plan to look at, at least one, if not a couple of the commercial payers to see if we can get some traction in those areas as well. And then while we're doing all of that, we will start to tackle maybe one other jurisdiction. But again, the plan is to try to stay as focused as possible. And I'm kind of holding the reins back until we do the proper review of the sort of the business case or the value proposition for pain management because if you recall, we sort of started down the path of labor and delivery and then pivoted over to pain management. And I want to make sure that we've got a clear message for the pain management clinics because it's a slightly different value proposition than it is for labor and delivery, where fluoroscopy is not used.

Okay. Great. And just to be clear, right, so the focus is on the jurisdictions in Texas, Florida, and New Jersey, correct?

Correct. Novitas and First Coast are the 2 MACs that are supporting those 3 jurisdictions.

Is it too early to discuss the timing of collecting that data and working with Medicare regarding reimbursement? Is this process expected to take 6 to 12 months, or do you have any insights on when broader commercialization might begin?

Yes, we recognize that the widespread adoption can be difficult, but we intend to restart the program in the next few weeks. We are conducting thorough due diligence with experienced professionals in this area, and we are preparing to launch CompuFlo again. The more data we gather early on, the faster we can proceed with a larger commercial rollout. Our main goal is to ensure that those who start using it receive the correct information for Medicare.

Our next question is coming from Bruce Jackson with The Benchmark Company.

I wanted to touch on the tariffs just real quick. Last quarter, you said that from a supply chain perspective, you're pretty well set. You have inventory in the states and for the international accounts, could ship out of China. Has there been any change to that during this quarter? And then secondly, with the international customers, have they changed their purchase behavior because of the current situation?

It's a good question. Thanks, Bruce. So as far as the tariffs, we're really not seeing much of an impact at all. We, as you mentioned, have the ability to ship out of China internationally, so to avoid that and plenty of supply here in North America to handle our business here. So we're not really seeing a whole lot of impact. As far as changing behavior, we'd like to see more customers initiating sales orders coming out of China. It's been a little bit lighter than we wanted it to be. So we're considering potentially having a bonded warehouse in the U.S. if the tariffs continue to persist so that we can ship out of the U.S. and/or China. But we're not really seeing a tremendous impact from the tariffs.

Okay. Okay. Great. And then in terms of the United States marketing effort, any thoughts on the sales force or the composition of the sales force? Do you have, for example, reimbursement specialists on staff? Tell us a little bit about how you're structuring the sales force, thinking about the sales force right now.

Another good question. Regarding reimbursement, we have previously attempted to secure reimbursement for the Dental side without success. We have discussed pursuing a pediatric code based on its use in pediatrics. We are considering our approach to entering the reimbursement market for Dental, acknowledging the significant costs and challenges involved. Concerning our sales organization, we intend to continue expanding it. We have a few team members working locally and are eager to strengthen our Dental team. Additionally, we have several programs that could significantly increase our sales presence in the North American market, and we expect to provide more updates on this in the coming weeks.

Okay. And then last question for me. With your sales, is there a seasonality pattern where the fourth quarter is generally a strong quarter for you? And as we're looking at the model, should we be thinking about an uptick in revenue for the fourth quarter?

That's interesting you asked. I used to be in the software business, and we always experienced significant growth in the fourth quarter. We typically pushed all our business into Q4, resulting in a slow Q1, a busy Q2, a light Q3, and then a strong Q4. Here, however, it's quite different. Our growth has been steady, with figures around $2.4 million, $2.2 million, and $2.4 million. We anticipate a similar performance in Q4, so we don't expect a significant surge. Overall, it's a consistent business, which is great. Still, we would like to see an increase and predict a steady quarter like we've seen in the past without any major spikes.

Our next question is coming from John Corp, who is a private investor.

It was nice to hear your presentation this morning. I have been a long-term shareholder of Milestone Scientific for at least 15 years. I would like to share the perspective of a long-term shareholder, although I must admit it has been a challenging experience as my hopes for increased revenues and positive cash flow and earnings have frequently been unmet. I believe you took this position because, like me, you have faith in the product. My dentist uses the STA system, and it has been a fantastic experience for me. I make an effort to attend every quarterly call and initially spoke with Leonard Osser years ago, who shared my enthusiasm for the products. However, after Milestone received FDA approval, my expectations were raised, but that marked the start of a downward trend that was unexpected. Since then, the balance sheet has suffered significantly. I once felt confident about Milestone's direction, but now I find myself uncertain about where things are headed. I am unclear on the challenges the company is facing, how many pain clinics are currently utilizing the product, or what the feedback from clinicians is. Can you provide some insight into our current status and your thoughts on the potential for Milestone Scientific? Specifically, what has led to the reduction in sales staff and the struggle to get cases authorized for payment? It seems that the approach may not have been ideal, and I would appreciate any clarification you can provide to give me some hope for Milestone's future.

Thank you, John. It's great to have you as a shareholder since 2018, and I appreciate your support and patience. From my observations in the few months I've been here, we have excellent technology, particularly with the STA and the dynamic pressure sensing features related to the CompuFlo unit. Our technology has remained strong, but historically, Milestone seems to have struggled with consistent sales leadership and execution that are essential for scaling the business effectively. In the past, there was a lot of enthusiasm and product usage when CompuFlo was launched, but there wasn't a solid structure to support that growth, leading to challenges. We're shifting our focus now, taking a more targeted approach with a specific group of customers, and enhancing support for Medicare reimbursement to ensure a proper, scalable rollout. The technology is promising, but the execution in sales has been lacking, and we need the right structures in place for a sustainable business model. I recognize the complexity and challenges of the medical market, which requires careful planning and strategy before entering. I ask for your continued patience as we aim to do this correctly this time.

Our next question is coming from Elliot Sparrow, who is an investor.

Eric, congratulations on a great quarter, best one in a long time. And I hope the trend continues. My question is along the same lines as what you've just been answering to Anthony Vendetti and now John. I'm curious why we had many, many successful trials and demos over the years with fantastic feedback from those people. How come they never translate into sales? And then b, again, as you've been trying to explain what is going to be different this time around?

Yes, I think one of the significant changes is that we have Dr. Demesmin, who is an early adopter and has been fantastic. He continues to utilize the product and is surrounded by many customers in New Jersey who are also using it. Additionally, we have brought on board some highly talented individuals, Shanth Thiyagalingam and Dr. Sayed, who have been advising us over the past few weeks. We expect their expertise will help us better navigate this complex environment in a more focused manner. It's important to note that transitioning from category 3 to category 1 is a complicated process that requires significant data for proper reimbursement. Doctors are eager to use our solution to enhance their revenue. To summarize, we are taking a step back to gather input from various doctors, engage with that community, and consult companies experienced in this field to ensure a well-structured approach. Our goal is to collect the necessary data, secure reimbursement, and then plan for a larger commercial rollout in the coming weeks or months. In this context, simply rushing to sell aggressively doesn’t work; we need data, structure, and proper preparation. With our current board in place, we intend to rely on their guidance to navigate the complex landscape, particularly regarding Medicare.

Okay. Great. Fantastic. My second question is totally different, and that is just about how are we set for capital and cash? And I know we've saved $0.5 million this year, but how much longer are we good for? Or are we going to need capital? That's it for me.

Thanks, Elliot, for your second question. My initial focus when I joined the company was to take control of costs, and we've made decent progress in that area. There are still more opportunities to improve. On the sales front, I'm preparing to ramp up our efforts significantly. I've been holding back a talented individual named Jason Papes, who is with us today, and we plan to fully activate our sales engines very soon. From a cash standpoint, the company has enough funds to sustain operations for several quarters. We are always exploring ways to enhance our financial position if necessary, but currently, the company is in a solid state.

As we have no further questions in queue at this time, I'd like to turn it back over to management for any closing remarks.

I appreciate everyone joining the call and thank our shareholders for being part of this community and for their loyalty. I resonate with the sentiments expressed by many of you, which is part of why I joined the company. I receive feedback from a variety of shareholders, and I want to emphasize that my daily focus is on driving shareholder value. It's essential for our organization to work towards being sales-focused, regardless of the department, whether it's product management, R&D, or customer service. Everything we do should consider how it impacts sales, our customers, and ultimately, our shareholders. Thank you again, and thank you, David, for organizing the call. I'm looking forward to speaking with everyone at the end of Q4. Good luck to us all.

Thank you. Ladies and gentlemen, this does conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.