Milestone Scientific Inc.

Good morning and welcome to the Milestone Scientific second quarter 2024 financial results and business update conference call. At this time, all participants are in a listen only mode and we will open for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Mr. David Waldman, Investor Relations of Crescendo Communications. David, the floor is yours.

Thank you, Jenny. Good morning, and thank you for joining Milestone Scientific's second quarter 2024 financial results conference call. On the call with us today are Ariane Haberhals, Chief Executive Officer, and Keisha Harcum, Vice President of Finance at Milestone Scientific. The company issued a press release this morning containing second quarter 2024 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 second quarter into June 30th, 2024. 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 in 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, FTA or legal developments, competitive pressures, changes in customer and market requirements and standards, and the risk factors detailed from time to time, and milestones, periodic filings with the Securities and Exchange Commission, including without limitation milestones report on Form 10-K for the year ended December 31, 2023, and milestones report on Form 10-Q for the second quarter ended June 30, 2024. These forward-looking statements made during this call are based upon management's reasonable belief as of today's date, August 15th, 2024 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 Haverhal, Chief Executive Officer. Please go ahead, Aryan.

Thank you, David, and thanks to everyone for joining us today. This has been a momentous year for the company as we recently achieved a major milestone with the grant of Medicare Part B physician payment rate assignment for our CompuFlow epidural system. As we have previously reported, our approach to reimbursement has been methodical and strategic. We've worked closely with clinicians to thoroughly document the medical necessity of our technology. And by engaging with Medicare jurisdictions, we have been able to educate payers on the clinical utility, safety, predictability, and efficacy of the CompuFlow system, ensuring that the jurisdictional Medicare administrative contractors, also known as JMACs, understand in full our technology prior to their pricing ruling. This favorable Medicare price assignment granted across multiple JMAC regions, including key states such as Florida, Texas, Pennsylvania, New Jersey, Maryland, Colorado, Oklahoma, Louisiana, Arkansas, Mississippi, New Mexico, the District of Columbia, and Delaware represents a significant achievement. An estimated 3 million epidural steroid injection procedures are performed each year across these three jurisdictions, accounting for approximately one-third of the total epidural steroid injection procedures conducted in the United States for chronic back pain treatment. With Medicare believed to account for up to 40% of this clinical practice volume, these regions represent an initial addressable market of approximately $250 million among Medicare patients alone. The positive outcome from these JMEX is not only a significant validation of the safety benefits of our technology, but also a major step forward in increasing penetration and adoption of our technology. We recognize there's still more work ahead to introduce our technology across these jurisdictions and throughout the rest of the country. However, this achievement marks a crucial turning point in our journey. I'm extremely proud of our entire team who have worked tirelessly to reach this milestone, and we are committed to continuing our efforts targeted at additional JMAX in the US. In tandem with this progress, we are excited to announce our partnership with Actual Biologics, whose extensive experience and deep relationships within the pain management sector make them an ideal partner. This collaboration represents a strategic, laser-focused, and disciplined commercial approach to expanding our reach by leveraging actual established clinician relationships in the key states belonging to the JMAX of New Jersey, Texas, and Florida. By aligning with a specialized partner instead of a large distributor or building our own sales force, we can accelerate the penetration and adoption of the CompriFlow Epidural System more effectively. This collaboration marks the next phase of our sales strategy. and we are confident that it will drive growth and enhance patient outcomes. We also believe there's a market opportunity for Comfort Flow within federal and other government agencies. As we have discussed in the past, we are advancing initiatives following SAM approval and working to secure approval within the FSS, the Federal Supply Schedule. FSS approval would open up the sizable government market. Turning to the international front, we are expanding our network of distribution partners for CompreFlow. We are targeting independent distributors with existing relationships within key global markets and proven track records of introducing medical devices within their territories. I'm particularly pleased to announce that we have received regulatory approval from Brazil's National Health Surveillance Agency to market and sell the CompiFlow epidural system in Brazil, covering the lumbar, thoracic, and the cervical thoracic junction of the spine. As the ninth largest economy globally, with over 200 million people, Brazil presents a significant opportunity for us. Ahead of this key approval, we've proactively established relationships with leading medical institutions and hospitals, and commercial partners in Brazil, setting the stage for a successful product launch. Final negotiations are ongoing, and we look forward to announcing the new cooperation in the near future. Brazil has over 2.8 million births each year and 21 million people suffering from chronic back pain. However, we're just 60% seeking treatment. Independent research estimates that four to five million epidural anesthesia procedures are performed annually in Brazil. We believe that with the right partners, we can expand the addressable market by offering a safer alternative to traditional epidural procedures, especially in rural areas with limited resources and training. This approval in Brazil is also a significant milestone in our global expansion strategy, providing an entry point into Latin and South America by building on our previous FDA approval in the United States. Lastly, we remain focused on increasing the value of our intellectual property and patent portfolio. We recently announced receipt of multiple notices of allowance for key patent applications in both the US and Europe that broaden the IP protection around our injection and drug delivery systems. So to summarize our progress as it relates to the medical division, we are advancing our nationwide reimbursement initiatives and executing a disciplined commercial rollout strategy, both in the US and abroad. We look forward to providing further updates and continuing to build on this momentum, ensuring that more patients and practitioners benefit from the precision and safety of our technology. Turning to our dental division, U.S. e-commerce sales increased to 1.3 million in the second quarter of 2024, compared to 1.2 million during the same period last year. This growth is a direct result of our strategic decision to transition from our previous distributors and instead channel our sales through our own online platform. By bringing this process in-house, we've been able to create a more direct line of communication with our customers, enhancing our ability to respond to their needs and preferences. This shift has also led to a significant improvement in our gross margins, which increased to 76.1% in the second quarter of this year from 65% in the same quarter last year. This margin expansion reflects not only the cost efficiencies we have gained, but also the value that our customers place on the quality, reliability of our products, and more importantly, the provided after-sales service by our team. We believe that the foundation we have established will continue to support steady growth in domestic sales. Our renewed focus on e-commerce has been bolstered by targeted marketing campaigns designed to directly reach both customers and patients, reinforcing the benefits of purchasing through our online portal. As we continue to refine and expand these efforts, we expect to see further traction and increased market shares in the US. On the international front, while we did encounter some temporary challenges due to issues with our distributors freight forwarders, these have since been resolved, allowing us to stabilize and resume normal operations. Additionally, our proactive decision to pause sales in China based on a reassessment of our strategy in that market had an impact on our year-over-year comparisons. Nevertheless, we currently believe that international sales in the second half of this year will show improvement over both the second half of last year and first half of this year. Looking ahead, we are optimistic about the future of our dental business. The changes we have implemented have not only strengthened our current operations, but have also laid the foundation for a scalable high margin business model that is designed to generate positive cash flow. We are confident that our approach will continue to yield strong results, driving growth, profitability, and customer satisfactions in the quarters and years to come. So to wrap up, we are at a pivotal inflection point following the grant of the first Medicare Part B physician payment rate assignment for our CompuFlow epidural system, a milestone that underscores the value and safety of our technology. The combination of our reimbursement strategy, partnerships such as Actual Biologics, the start of commercialization, our expansion into key markets like Brazil, as well as our growing e-commerce platform for the dental division provide us with the necessary ingredients for success. We remain committed to enhancing patient outcomes and driving value for our shareholders as we continue to build on this momentum. I'd like to turn the call over to Keisha Harkin, Vice President, Finance, to go over the financials in detail. Please go ahead, Keisha.