Milestone Scientific Inc.

The company's management will now provide prepared remarks reviewing the financial and operational results for the first quarter ended March 31st, 2023. Before we get started, we'd 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 revenues, 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 milestones 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, 2022, and Milestone's report on Form 10-Q for the first quarter ended March 31, 2023. forward-looking statements made during this call are based upon management's reasonable belief as of today's date, May 11th, 2023. Milestone undertakes no obligation to revise or update publicly any forward-looking statements for any reason. With that, we'll now turn the call over to Aryan Haberhals, Chief Executive Officer. Please go ahead, Aryan.

Thank you, David, and thanks to everyone for joining us today. I'm pleased to report we achieved revenue of more than $2.6 million, making it a solid quarter. Most notably, domestic dental sales increased 47% due in part to the early success of our new online store for selling and shipping the SDA single tooth anesthesia system and hand pieces directly to dental offices and dental groups within the US. This strategy has provided us a closer and more direct relationship with our customers, which in turn resulted in improved gross margins. As a result, we recorded an increase of 12% in gross profit for the first quarter of 2023. We continue to bring on new strategic distribution and channel partners that sell through their respective networks of dental customers in the U.S. The launch of the online sales portal has also enabled us to directly serve several dental service organizations or DSOs. Our goal is to strengthen our position with these DSOs by increasing the penetration of our dental offering with these customers. Our investment in direct to patient marketing activities has resulted in several leads from dentists contacting us directly to order our instruments because patients requested them to do so. We will continue to increase our marketing efforts with dedicated campaigns directly targeted at patients. We're also expanding our efforts to enter new international markets and deepen our penetration within existing international markets. Towards this end, early in the first quarter, we announced Tecnica Health Technologies as exclusive distributor of the STA system in Brazil. As mentioned during prior calls, The Brazilian dental market is one of the three largest markets in dentistry. We also recently appointed Sweden and Martina as our exclusive distributor in Italy, France, Spain, and Portugal. We look forward to announcing additional international distribution agreements as we continue to build our global network. So to summarize, we believe that through our new sales strategy in combination with our increased marketing efforts, we aim to further grow the dental business at attractive margins in the coming quarters. It's also worth noting that our dental division continues to operate profitable. In fact, the dental division generated over $600,000 of operating income on a standalone basis, which is an 81% increase over the same period last year. Turning to our medical segment, we continue to advance our commercial efforts around the CompreFlow epidural system as we target hospitals, healthcare systems, and pain management clinics. The fact that our technology was adopted by leading physicians and hospital systems reinforces our confidence in the market potential for our instrument, particularly within pain management and labor and delivery market segments. Importantly, we have witnesses that the decision-making time or sales cycle is much shorter in the private pain clinics compared to the labor and delivery department at hospitals. In addition, the recent 510 FDA clearance of our instrument for use in the thoracic region of the spine, including the cervical thoracic junction, is also helping drive interest in our technology within a number of prominent pain management clinics, given the added complexity and risks associated with these procedures, specifically the incident rates of morbidity in the thoracic and cervical region of the spine are believed to be much higher than in the lumbar spine region at 17 and 30% respectively due to the difficulties accessing the epidural space. We recently commenced sales of CompiFlow epidural disposables into the regenerative sports and spine center in Tualatin, Oregon. Adoption of the technology by this clinic follows a successful evaluation process by Dr. Jimmy Hubert, a regenerative sports and pain medicine physician, and the owner of Regenerative Sports and Spine Center, which further validates the safety and efficacy of our technology. Dr. Hubert initially conducted several cases using the CompuFlow epidural instrument in which he reported 100% success. The evaluation included epidural steroid injection procedures in the lumbar, thoracic, and cervical thoracic junction of the spine. The incorporation of our technology by this recognized physician illustrates his commitment to implementation of the latest technologies to improve patients' outcomes and safety by helping them recover more efficiently from sports injuries. This follows similar evaluations earlier this year by Dr. Brad Sisson and Dr. D.J. Demesneau, two of the prominent thought leaders that have recently begun incorporating the CompriFlow epidural instrument into their practices. Collectively, the procedures by these pain management physicians marked the first in a series of epidural steroid injections using the CompriFlow epidural system for artificial intelligence-assisted analgesic needle placement in patients. Providers may consult the American Academy Association AMA CPT Changes 2023 regarding AI-assisted analgesic epidural needle placement in patients. This publication addresses AMA's new technology-specified Level 3 CPT code set which came into effect on January 1st, 2023. It describes technologies that integrate artificial intelligence to place an epidural needle. It's typically utilized during analgesic epidural needle placement in patients. It is real-time software to assist the physician by transmitting key data points, and we believe medical necessary and compliantly documented use of this data may be eligible for reimbursement for the CompiFlow Epidural System. The clinicians mentioned before have been or are in the process of submitting their claims to healthcare insurance providers. The expectation is that they will receive the first responses by the providers within 30 days after submission. Depending on the response, either more information could be requested by the insurance providers to the clinicians, or an acceptance or denial could be obtained. In the case of an acceptance, this would potentially lead to payment to clinicians of a reimbursement fee for epidural steroid injections using our technology. We are not allowed to reach out to clinicians or insurance providers directly on pricing, and we are following the strict rules and regulations and policies by the American Medical Association, thus doing our utmost to service the clinicians with all the documentations for their submissions in a high quality professional way. We are not aware of any systems other than the CompuFlow Epidural System that would meet these artificial intelligence criteria as mentioned before. And as I'm sure most of you are aware, our technology is backed by a broad portfolio of domestic and international patents, which we believe will both preserve and further enhance our leadership in the market. We remain encouraged by the interest in our epidural instruments by anesthesiologists and pain management providers, especially for patients with complex anatomy and difficult cases that involve the thoracic and cervical thoracic junction. We believe that the efforts we are taking to seed the market with our technology among leading pain specialists will ultimately translate into increased adoption as we continue to execute on our goal of establishing the CompuFlow epidural system as standard of care in epidural analgesia. We also believe there is a market opportunity for our CompuFlow epidural instrument within federal and other government agencies as our system can contribute to both improved patient outcomes as well as increased efficiencies. We were recently granted registration with the U.S. government system for award management, which is a key step in the overall governmental decision-making and payment process. In addition, we are actively pursuing U.S. federal supply service approval for the CompuFlow epidural instrument which, if granted, would provide uniform pricing across government agencies. In addition to our direct sales channel, we are also expanding our network of distribution partners to assist in further adoption of the CompreFlow epidural system. Specifically, we are targeting independent distributors with existing relationships within key global markets and proven track records, introducing medical devices within their territories. We look forward to announcing additional international distributors as we advance our commercial rollout. At the same time, we continue to carefully manage our expenses while investing in sales, direct-to-patient marketing, and product development. At this point, I'd like to turn the call over to our Peter Milligan, Chief Financial Officer, to go over the financials in detail. Please go ahead, Peter.

Thank you, Arjen. Total revenue for the first quarter of 2023 was $2.6 million versus $2.7 million for the same period last year. The decrease was driven by lower revenue from China of $360,000, decrease in other international sales of $180,000, offset by increase in domestic dental revenue of $443,000. The increase in domestic dental revenue was primarily driven by the launch of a new online store for U.S. dentists to order the STA single-tooth system, instruments, and handpieces, as well as the reversal of an allowance for returns of $179,000, which was related to the distribution agreement that we terminated with Henry Schein at the end of 2022. Gross margins improved significantly, from 62% last year to 73% this quarter. This increase was largely driven by the company's change in its U.S. distribution, which Ariane referenced earlier, is going extremely well. The operating loss for the three months ended March 31st, 2023 decreased by 600,000 versus the 1.9 million loss for the first quarter of last year. This was driven by higher gross margin and lower operating costs, trends that we expect to see continue throughout the year. The net loss was two cents per share versus three cents per share for the comparable period in 2022. The company did use $2 million in cash in the first quarter, but it's important to highlight that the accounts receivable and prepaid expenses increased by $550,000. And we saw a significant reduction in current liabilities of over $650,000. We expect our cash use to decline each of the remaining quarters throughout 2023. At the end of the quarter, March 31, 2023, the company had cash and cash equivalents of 6.7 million, total current assets of 11.6, and working capital of 8.9, and has no long-term debt. At this point, I'd like to turn the call back over to Aryan. Thank you, Peter.