The following discussions of the financial condition and results of operations
should be read in conjunction with the financial statements and the notes to
those statements contained in this report and in connection with management's
discussion and analysis and the audited consolidated financial statements and
notes thereto included in our Annual Report on Form 10-K for the year ended
December 31, 2019, which was filed with the Securities and Exchange Commission,
or SEC on March 30, 2020. Certain statements in this discussion and elsewhere in
this report constitute forward-looking statements, within the meaning of section
21E of the Exchange Act, that involve risks and uncertainties. The actual
results may differ materially from those anticipated in these forward-looking
statements.



OVERVIEW



Our common stock was listed on the NYSE American on June 1, 2015 and trades
under the symbol "MLSS". We have developed a proprietary, computer-controlled
anesthetic delivery instrument, using The Wand, a single use disposable
handpiece. The instrument is marketed in dental sector under the trademark
CompuDent®, and STA Single Tooth Anesthesia System and in medical sector 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 several other disciplines. The
dental instruments are sold in the United States, U.S. territories, Canada, and
in over 58 other countries abroad. In June 2017, the FDA approved our 510(k)
applications for marketing clearance in the United States of our CompuFlo
Epidural Computer Controlled Anesthesia System. We are in the process of
introductory meetings with medical device distributors within the United States
and Europe. There have been five medical instruments sold in the United States
in 2018 and limited amounts sold internationally as of the reporting date.
Certain of our medical instruments have obtained European CE mark approval and
can be marketed and sold in most European countries.



On January 24, 2019, the Company received a letter from the NYSE- American
Exchange (Exchange) stating that the Company's Plan has been accepted by the
Exchange. The Company is still not in compliance with Section(s) 1003(a)(i),
(ii) and (iii) of the Company Guide and its listing on the Exchange is being
continued pursuant to an extension granted by the Exchange. If the Company is
not in compliance with the continued listing standards by May 20, 2020, or if
the Company does not make progress consistent with the Plan, the Exchange will
initiate delisting procedures as appropriate. The Company may appeal a staff
delisting determination in accordance with Section 10 and Part 12 of the
Exchange's guide.



Milestone Scientific remains focused on advancing efforts to achieve the following five primary objectives:





?   Establishing Milestone's DPS Dynamic Pressure Sensing technology platform as
the standard-of-care in painless and precise drug delivery, providing for the
first time,    objective visual and audible in-tissue pressure feedback, and
continuing to expand platform applications;

? Following obtaining successful FDA clearance of our first medical devices,

Milestone Scientific is transitioning from a research and development
    organization to a commercially focused medical device company;

? Expanding our global footprint of our CompuFlo Epidural System by partnering

with distribution companies worldwide; and

? Continuing the development of our proprietary cosmetic injection device for


    delivery of botulinum toxin (such as Botox® and Dysport®)




Wand STA Dental Market



Since its market introduction in early 2007, the Wand/STA Instrument and prior
C-CLAD products have been used to deliver over 66 million safe, effective and
comfortable injections. The instrument has also been favorably evaluated in
numerous peer-reviewed, published clinical studies and associated articles.
Moreover, there appears to be a growing consensus among users that the STA
Instrument is proving to be a valuable and beneficial instrument that is
positively impacting the practice of dentistry worldwide.



Beginning January 1, 2016, Milestone Scientific entered into a non-exclusive
distribution agreement with Henry Schein, Inc. ("Henry Schein"). In June 2016,
that agreement was replaced with an exclusive distribution arrangement for our
dental products for the United States and Canada with Henry Schein. Under this
arrangement we have a semi-dedicated independent sales force visiting dentists.



To date, Henry Schein has endeavored to accomplish the goals set forth in the
exclusive distribution agreement for The Wand STA instrument and handpieces,
including training of its exclusive products sale's specialists. Specifically,
up to 25 exclusive product sales specialists have now been fully trained as
experts in the features, advantages and benefits of The Wand/STA instrument and
handpieces and all are currently in the field selling the instrument.



                                       25
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Henry Schein increased the number of exclusive product specialist in 2019 and
trained an additional customer service representative to support dentists across
North America through its exclusive product sales customer call center, as
business volume increases.



On the global front, we have granted exclusive marketing and distribution rights
for the Wand/STA Instrument to select dental suppliers in various international
regions in Asia, Africa, South America and Europe. They include FM Produkty Dla
Stomatologii in Poland and Unident AB in the Scandinavian countries of Denmark,
Sweden, Norway and Iceland.



In October 2012, the State Food and Drug Administration (CFDA) of the People's
Republic of China approved our Wand/STA Single Tooth Anesthesia System (STA
System). In May 2014, the CFDA also approved the Wand STA handpieces for sale in
China.



Medical Market



In September 2014, Milestone Medical received CE clearance to distribute their
epidural and intra-articular instruments in the European Community (EU).
Milestone Medical signed a distribution agreement in March 2015 with a medical
distributor in Poland for the distribution of the epidural instrument. This
distribution agreement was terminated in late 2016 due to the distributor's
inadequate performance under the distribution agreement. Milestone Medical is
continuing to pursue distributors for the instrument in the EU community.



During 2016, Milestone Scientific filed for 510(k) marketing clearance with the
U.S. Food and Drug Administration (FDA) for both intra-articular and epidural
injections with the CompuFlo Epidural System.  In June 2017, the FDA approved
the CompuFlo Epidural System for epidural injections. Milestone Scientific is in
the process of meeting with medical device distributors within the United States
and foreign markets. Milestone Scientific's immediate focus is on marketing its
epidural device throughout the United States and Europe.



In December 2016, we received notification from the FDA that based upon the
510(k)-application submitted for intra- articular injections, we did not
adequately document that the device met the equivalency standard required for
510(k) clearances. Following consultation with the FDA Office of Device
Evaluation, we filed a new 510(k) application for the device in June 2018. In
August 2018, the FDA provided Milestone Scientific with a list of questions on
the intra-articular 510(k) application filed in June 2018. Due to the delay in
responding to FDA questions Milestone Scientific will be required file a new
510(K) application.



In January 2019, the Company announced the results of a four hundred patient
clinical trial by researchers from the University of Miami, University of Texas
and Northwestern University, and two prominent California-based pain clinics.
Published-Ahead-of-Print in Anesthesia & Analgesia (the official Journal of the
International Anesthesia Research Society), the randomized, controlled study
compared the effectiveness of the CompuFlo Epidural System in labor and delivery
and chronic pain management, where loss of resistance and fluoroscopy are the
current standards of care. The CompuFlo Epidural System was found to be
ninety-nine percent successful in objectively identifying the epidural space
even in challenging patients with a higher body mass index.

In February 2019, the Company announced a new 120-patient clinical study
published in Anesthesiology Research & Practice that verifies the CompuFlo
Epidural System consistently differentiates false loss of resistance from true
loss of resistance during epidural placement. In all cases where the CompuFlo
Epidural System's pressure measurements were used to objectively identify the
epidural space, the block was performed successfully with no complications.

In February 2019, the Company announced Ospedale "Pugliese Ciaccio" di Catanzaro
is the first hospital in Italy to use the CompuFlo Epidural System for all
epidurals in labor and delivery. For a local hospital performing a limited
number of epidurals, the CompuFlo Epidural System offers a real-time, objective
tool for accurate epidural space identification to help reduce failure rates and
accidental dural punctures that can require further treatment and interventions.

In April, 2019 the Company entered the medical education market with the
introduction of the CompuFlo® Epidural Trainer (CompuFlo Trainer), an
instructional instrument that uses pressure sensing technology to improve
epidural placement success. The Company has signed an agreement to distribute
the CompuFlo Trainer with American 3B Scientific, a leading supplier of didactic
material for medical education.

In June 2019 the Company announced the results of two research abstracts
featuring the CompuFlo Epidural device at Euroanesthesia 2019, Europe's largest
annual event showcasing the latest knowledge in the field of anesthesia. The
abstracts were presented during scientific poster sessions highlighting how
CompuFlo's objective detection of tissue pressure makes challenging procedures
with difficult patients more efficient and accelerates clinical competency for
trainee.



                                       26

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In October 2019, the Company announced the first international multicenter study
to compare the incidence of accidental dural puncture using the CompuFlo
Epidural System versus the continuous loss of resistance (LOR) technique. The
study collected records between 2015 and 2019 of epidural administration on
labor and delivery patients using the CompuFlo Epidural System from four
institutions, one in the U.S., one in Chile, and two from Italy. Among the four
sites, there were 812 patients who received epidural analgesia with CompuFlo and
none had accidental dural puncture regardless of the composition of the epidural
performer types. The Company also announced that Professor Rovnat Babazade, MD,
University of Texas Medical Branch at Galveston, Department of Anesthesiology,
presented a poster at the ANESTHESIOLOGY® 2019 Annual Meeting in Orlando,
Florida, entitled, "International Multicenter Study of Accidental Dural Puncture
Rate; Comparison of the CompuFlo with Traditional Method''. ANESTHESIOLOGY 2019,
hosted by the American Society of Anesthesiologists (ASA), unites more than
14,000 clinicians, thought leaders and professionals from around the world.

In November 2019, the Company and 3B Scientific, the world's leading supplier of
didactic material for medical education, signed a global agreement expanding
distribution of the CompuFlo Trainer. The expanded agreement allows 3B
Scientific to capitalize on momentum from strong interest in the CompuFlo
Trainer at its unveiling at Euroanesthesia 2019 and the Association of Women's
Health, Obstetric and Neonatal Nurses meeting, and gives more anesthesia
instructors the ultimate solution to accelerate the epidural procedure's
learning curve and trainee success.



The following table shows a breakdown of Milestone Scientific's product sales
(net), domestically and internationally, by business segment product category:

                                          March 31, 2020
                               Dental        Medical         Total
Domestic-US & Canada
Devices                      $       525     $      -     $       525
Handpieces                       697,360            -         697,360
Other                             22,506            -          22,506
Total Domestic US & Canada   $   720,391     $      -     $   720,391
International ROW
Devices                      $   242,504     $  7,600     $   250,104
Handpieces                       830,208          200         830,408
Other                             10,483            -          10,483
Total International-ROW      $ 1,083,195     $  7,800     $ 1,090,995
International-China
Devices                      $         -     $      -
Handpieces                             -            -               -
Other                                  -            -               -
Total International          $         -     $      -     $         -

Total Product Sales          $ 1,803,586     $  7,800     $ 1,811,386




                                          March 31, 2019
                               Dental         Medical         Total
Domestic-US & Canada
Devices                      $   123,994     $       -     $   123,994
Handpieces                       789,153           400         789,553
Other                             16,817             -          16,817
Total Domestic US & Canada   $   929,964     $     400     $   930,364
International ROW
Devices                      $   285,345     $       -     $   285,345
Handpieces                       631,311             -         631,311
Other                             18,889             -          18,889
Total International-ROW      $   935,545     $       -     $   935,545
International-China
Devices                      $         -     $       -     $         -
Handpieces                        50,000             -          50,000
Other                                  -             -               -
Total International          $    50,000     $       -     $    50,000

Total Product Sales            1,915,509           400       1,915,909




                                       27

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Current Product Platform


See Note 1 Organization and Business.





Results of Operations



The following table sets forth the consolidated results of operations for the
three months ended March 31, 2020 compared to 2019. The trends suggested by this
table may not be indicative of future operating results:



                                                            For three months ended March 31,
                                                              2020                    2019
Operating results:
Product sales, net                                      $       1,811,386       $      1,915,909
Cost of products sold                                             527,250                618,694
Gross profit                                                    1,284,136              1,297,215

Operating expenses:
Selling, general and administrative expenses                    2,785,262              2,109,050
Research and development expenses                                 107,480                  6,346
Loss from operations                                           (1,608,606 )             (818,181 )
Other income, and loss on earning net                              (4,347 )               24,986
Net loss                                                       (1,612,953 )             (793,195 )
Net loss attributable to noncontrolling interests                 (12,738 )              (10,443 )

Net loss attributable to Milestone Scientific Inc. $ (1,600,215 )

$       (782,752 )




Cash flow:                                   March 31, 2020       March 31, 2019

Net cash used in operating activities $ (972,079 ) $ (220,171 ) Net cash used in investing activities

                 (7,138 )             (8,104 )
Net cash provided by financing activities            228,920            2,224,546



Three months ended March 31, 2020 compared to Three months ended March 31, 2019

Net sales for 2020 and 2019 were as follows:



                      2020            2019          Increase Decrease        %
Dental             $ 1,803,586     $ 1,915,509     $          (111,923 )       -6 %
Medical                  7,800             400                   7,400       1850 %
Total sales, net   $ 1,811,386     $ 1,915,909     $          (104,523 )       -5 %




Consolidated revenue for the three months ended March 31, 2020 and 2019 were
approximately $1.8 million and $1.9 million, respectively. Dental revenue for
the three months ended March 31, 2020 and 2019 were approximately $1.8 million
and $1.9 million, respectively. Dental revenues decreased by approximately
$112,000, which was related to a decrease  in devices and handpiece sales in the
United States and Canada by approximately $272,000, primarily due to a slower
demand for the STA instruments, and decrease in Milestone China revenue
recognition of approximately $50,000, offset by an increase in international
sales by approximately $219,000, in the three months ended March 31, 2020
compared to 2019. The reduction in shipments to Milestone China is due to
Milestone China's continuing cash flow issues and the modification to their
business strategy to better serve the China dental market.


Medical revenue for the three months ended March 31, 2020 and 2019, were
approximately $7,800 and $400, respectively. In June 2017, the Company announced
that the CompuFlo Epidural System received 510(k) marketing clearances from the
U.S. Food and Drug Administration (FDA). Milestone is in the process of
attending medical device trade shows and attending introductory meetings with
medical device distributors within the United States and European markets. The
Company is focusing the marketing its Epidural devices principally in the United
States. In 2020, the Company began to build an internal sales force to market
Epidural devices to hospitals and medical center throughout the United States.

As a result of the reduced hours and closings of dental offices throughout the
country and the rest of the world due to the continuing spread of COVID-19, we
anticipate that our revenue for the second quarter, and possibly the third
quarter, will be materially and adversely affected. At this point in time, it is
too early to determine an estimate of what the second or third quarter impact
will be or the effect COVID-19 may have on our fourth quarter revenue. In
addition, it is too early to determine what the effect will be on the
anticipated commercialization of our CompuFlow Epidural system as a medical
device in 2020

                                       28
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Gross Profit for 2020 and 2019 were as follows:





                        2020            2019          Increase Decrease        %
Dental               $ 1,279,845     $ 1,296,842     $           (16,997 )       -1 %
Medical                    4,291             373                   3,918       1050 %
Total gross profit   $ 1,284,136     $ 1,297,215     $           (13,079 )       -1 %



Consolidated gross profit for the three months ended March 31, 2020 and 2019 approximately 71% and 68%, respectively.





Selling, general and administrative expenses for 2020 and 2019 were as follows:



                                                                            Increase
                                              2020            2019          Decrease           %
Dental                                     $   703,459     $   804,180     $  (100,721 )         -13 %
Medical                                        566,625         486,406          80,219            16 %
Corporate                                    1,515,178         818,464         696,714            85 %
Total selling, general and
administrative expenses                    $ 2,785,262     $ 2,109,050     $   676,212            32 %




Consolidated selling, general and administrative expenses for the three months
ended March 31, 2020 and 2019, were approximately $2.8 million and $2.1 million,
respectively. The increase of approximately $676,000 is categorized in several
areas. Professional Fees increased by approximately $487,000 due to the Company
seeking business alternatives in addition to possible capital funding. Office
expense increased approximately $143,000 for the relocation of the company
office and other related costs.  As a result of the reduced hours and closings
of dental offices throughout the country and the rest of the world due to the
continuing spread of COVID-19, salaries, and marketing expenses decreased
approximately $46,000 compared to 2019.



Research and Development for 2020 and 2019 were as follows:





                                   2020         2019        Increase Decrease        %
Dental                           $       -     $   696     $              (696 )      100 %
Medical                            107,480       5,650                 101,830       1802 %
Corporate                                -                                 

- 0 % Total research and development $ 107,480 $ 6,346 $ 101,134 1594 %






Consolidated research and development expenses for the three months ended March
31, 2020 and 2019, were approximately $107,000 and $6,000, respectively. The
increase is due to additional development costs and software upgrades associated
with the Epidural devices.


Profit (Loss) from Operations for 2020 and 2019 were as follows:





                                 2020            2019         Increase Decrease       %
Dental                       $    576,386     $  491,966     $            84,420       17 %
Medical                          (669,814 )     (491,683 )              (178,131 )     36 %
Corporate                      (1,515,178 )     (818,464 )              (696,714 )     85 %
Total loss from operations   $ (1,608,606 )   $ (818,181 )   $          (790,425 )     97 %




The loss from operations was approximately $1.6 million and $818,000 for the
first quarter ending March 31, 2020 and 2019 respectively. The increase in the
loss quarter over quarter is due to an increase in selling, general and
administration expenses of approximately $676,000 and an increase of
approximately $101,000 in research and development as noted in the previous
section of this report. The dental segments are still the primary revenue and
gross profit generator for the Company. The dental segment has
consistent revenue in the United States and Rest of the World and manage
expenses during the process. Costs in the medical segment are beginning to
increase as personnel are expanded in the U.S. to focus on our domestic Epidural
device business.



                                       29

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Liquidity and Capital Resources





At March 31, 2020, Milestone Scientific had cash and cash equivalents of
approximately $766,000 and working capital of approximately $21,000 versus
working capital of $1.2 million at December 31, 2019.  For the three months
ended March 31, 2020, we had negative cash flows from operating activities of
approximately $972,000 compared to $220,000 for the three months ended March 31,
2019. Based on current and expected cash to be used in operating
activities substantial doubt exists about the Company's ability to continue as a
going concern for at least the next twelve months from the financial reporting
date.



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 revenue from its medical devices and
disposables business in the United States and worldwide, as well as considering
other strategic plans or transactions. However, the COVID-19 pandemic is
expected to have an adverse effect on the Company's operations and cash flows
for at least in the next two quarters and possibly longer depending on the
length and severity in of the pandemic in important dental markets.



Management is also actively pursuing additional financing and/or other strategic
plans and transactions but can provide no assurances that such financing or
other strategic plans will be available on acceptable terms, or at all. Further,
the extreme volatility in the financial markets due to COVID-19, as well as the
expected non-compliance with the NYSE May 20th, 2020 requirement may make it
more difficult to raise sufficient capital when needed or execute other
strategic plans or transactions. Without additional funding a delay, scale back
or elimination of some or all of the Company's medical commercial strategy or
development programs could be required, all of which could have a material
adverse impact on the Company.



The capital raised in April 2020 (see Note 14 - Subsequent Events) provides
Milestone Scientific with working capital to continue marketing of the CompuFlo
Epidural device and to market its dental devices. Now that the CompuFlo Epidural
System has obtained FDA clearance in the United States (June 2017), the
development costs were reduced in 2019 but the selling costs are expected to
continue to increase. The FDA clearance has provided the Company with the
opportunity to establish distribution in the U.S. At the same time, the Company
is looking to establish additional financing to support the Epidural device
commercialization process. The intra-articular device will restart the 510K
application process later this year, subject to sufficient funding.



On April 14, 2020, the Company  closed its previously announced underwritten
offering of 4,750,000 shares of its common stock and warrants to purchase up to
an aggregate of 2,375,000 shares of the its common stock. Each share of common
stock was sold together with a warrant to purchase 0.50 of one share of common
stock at a combined price to the public of $0.95. Gross proceeds before
underwriting discounts commissions and estimated offering expenses, were
approximately $4.5 million. In addition, Milestone Scientific granted to Maxim
Group LLC a 45-day option to purchase up to an additional 712,500 shares of
common stock and/or warrants to purchase up to 356,250 shares of common stock
for the purposes of covering any over-allotments, at the public offering price
less discounts and commissions, of which Maxim Group LLC partially exercised its
option to purchase 200,000 shares of common stock and warrants to purchase up to
330,000 shares of common stock. The partial over-allotment exercise transaction
also closed on April 14, 2020, bringing the total net proceeds of the offering,
after underwriting discounts and commissions and estimated offering expenses, to
approximately $4.3 million. The warrants are immediately exercisable at a price
of $1.20 per share of common stock and expire three years from the date of
issuance. The shares of common stock and the accompanying warrants were
purchased together in the offering but were issued separately and were
immediately separable upon issuance.



In connection with capital raise on April 14, 2020, Maxim exercised its
over-allotment option under the Underwriting Agreement, and purchased 470,000
shares of common stock, less the Underwriter's discount and commissions and
offering expenses, of $415,244. This over-allotment exercise transaction closed
on April 17, 2020.

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