As filed with the Securities and Exchange Commission on February 10, 2016May 2, 2019
Registration No. 333- 333-_______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MILESTONE SCIENTIFIC INC.
(Exact name of Registrantregistrant as specified in its charter)
Delaware | ||||
13-3545623 | ||||
(State or |
| (I.R.S.Employer | ||
incorporation or |
|
Identification No.) |
220 South Orange Avenue
Livingston, New Jersey 07039
(973) 535-2717
(Address, including zip code, and telephone number, including
area code, of Registrant’s principal executive offices)
Leonard Osser
InterimChief Executive Officer
Milestone Scientific Inc.
220 South Orange Avenue
Livingston, New Jersey 07039
(973) 535-2717
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy To:
Please send copies of all communications to:Martin S. Siegel
Stephen Zelnick,, Esq.
Morse, Zelnick, Rose
Golenbock Eiseman Assor Bell & Lander,Peskoe LLP
825
711 Third Avenue
New York, New York 10022
10017
(212) 838-8040
(212) 208-6809 Facsimile907-7300
Approximate date of commencement of proposed sale to the public:
public: From time to time after the effective date of this Registration Statement as determined by market conditions.registration statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x☑
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨☐
If this Form is a registration statement pursuant to Generalgeneral Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commissioncommission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨box, ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨☐
Indicate by check mark ifwhether the registrant is a large accelerated filer, an accelerated file,filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” andfiler,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer ☐ | ||||
| Non-accelerated filer ☐ | ||||||
| Smaller reporting company ☑ | ||||||
CALCULATION OF REGISTRATION FEE
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Title of each class of securities to be registered(1) | Amount to be registered(1)(2)(3) | Proposed maximum offering price per unit(2)(3) | Proposed maximum aggregate offering price(3) | Amount of registration fee | ||||
Debt Securities | ||||||||
Preferred Stock | ||||||||
Common Stock | ||||||||
Warrants | ||||||||
Units | ||||||||
Total | $30,000,000(4) | $3,021(4)(5) | ||||||
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Class of |
| Amount to be Registered (1)(2) |
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| Proposed Aggregate (1)(2) |
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| Amount of (6) |
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Common Stock, par value $0.001 per share(3) |
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| — |
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Preferred Stock, par value $0.001 per share(3) |
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| — |
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Warrants(4) |
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| — |
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| — |
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| — |
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Units(5) |
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| — |
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| — |
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| — |
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Debt Securities |
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| — |
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| — |
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Total |
| $ | 30,000,000 |
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| $ | 30,000,000 |
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| $ | 1,343.56 | |
(1) | There are being registered hereunder such indeterminate number of shares of common stock and |
(2) | We have estimated the amount to be registered and the proposed maximum offering price solely for the purpose of calculating the registration fee pursuant to |
| debt securities. The |
(3) | In addition to any securities that may be registered hereunder, we are also registering an indeterminate number of shares of common stock or preferred stock as may be issued upon conversion, exercise or exchange of the securities issued directly hereunder. | |
(4) | Includes warrants to purchase common stock, warrants to purchase preferred stock and warrants to purchase debt securities. | |
(5) | Will represent an interest in any combination of common stock, preferred stock, debt securities, or warrants, which may or may not be separable from one another. | |
(6) | Calculated pursuant to Rule 457(o) |
Pursuant to Rule 415(a)(6) of the Securities Act, the securities registered pursuant to this registration statement include, as of the date of filing of this registration statement, $18,914,490 of unsold securities previously registered on the registrant’s Registration Statement on Form S-3 (Registration Statement No. 333-209466), which we refer to as the Prior Registration Statement. Pursuant to Rule 415(a)(6), the offering of the unsold securities registered under the Prior Registration Statement will be deemed terminated as of the date of effectiveness of this registration statement. If the registrant sells any of such unsold securities pursuant to the Prior Registration Statement after the date of this filing, and prior to the date of effectiveness, of this registration statement, the Registrant will file a pre-effective amendment to this registration statement which will reduce the number of such unsold securities included on this registration statement and increase the additional securities registered hereon so that the total amount of securities registered hereon will equal $30,000,000, as reflected in footnote 1 to the table above, and will pay the additional registration fee resulting therefrom.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.determine.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 10, 2016MAY 2, 2019
PROSPECTUS
$30,000,000
MILESTONE SCIENTIFIC INC.
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
This prospectus relates to common stock, preferred stock, debt securities, warrants and units that we may sell from time to time in one or more offerings up to a total public offering price of $30,000,000 on terms to be determined at the time of sale. We will provide specific terms of these securities in supplements to this prospectus. You should read this prospectus and any supplement carefully before you invest. This prospectus may not be used to offer and sell securities unless accompanied by a prospectus supplement for those securities.
Our common stock is listed on the NYSE MKTSAmerican under the symbol “MLSS”. As of February 9, 2016,On April 29, 2019, the aggregate market value of our outstanding common stock held by non-affiliates was $22,454,944 based on 21,687,164 shares of outstanding common stock, of which 16,633,292 shares are held by non-affiliates, and a per share price of $1.35 which was the closing sale price of our common stock as quoted on the NYSE MKTS on February 9, 2016. We have not sold any securities pursuant to General Instruction I.B.6. of Form S-3 during the prior 12 calendar month period that ends on and includes the date hereof.American was $0.42 per share.
These securities may be sold directly by us, through dealers or agents designated from time to time, to or through underwriters or through a combination of these methods. See “Plan of Distribution” in this prospectus. We may also describe the plan of distribution for any particular offering of these securities in any applicable prospectus supplement. If any agents, underwriters or dealers are involved in the sale of any securities in respect of which this prospectus is being delivered, we will disclose their names and the nature of our arrangements with them in a prospectus supplement. The net proceeds we expect to receive from any such sale will also be included in a prospectus supplement.
Investing in our securities involves certain risks. See “Risk Factors”“Risk Factors” beginning on page 43 of this prospectus and in any prospectus supplement before you make your investment decision.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2016.2019.
Table of Contents
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WHERE YOU CAN FIND MORE INFORMATION | 1 | |||
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RISK FACTORS | 3 | |||
THE BUSINESS | 3 | |||
USE OF PROCEEDS | ||||
4 | ||||
DESCRIPTION OF COMMON STOCK WE MAY OFFER | ||||
4 | ||||
DESCRIPTION OF PREFERRED STOCK AND PREFERRED STOCK WE MAY OFFER | ||||
5 | ||||
DESCRIPTION OF WARRANTS WE MAY OFFER | ||||
7 | ||||
DESCRIPTION OF DEBT SECURITIES WE MAY OFFER | 8 | |||
10 | ||||
PLAN OF DISTRIBUTION | 11 | |||
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EXPERTS | 13 | |||
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). You can inspect and copy these reports, proxy statement and other information at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D. C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. The SEC also maintains a web site that contains reports, proxy and information statements and other information regarding issuers, such as Milestone Scientific Inc. (www.sec.gov). Our web site is located atwww.milestonescientific.com. The information contained on our web site is not part of this prospectus.
This prospectus “incorporates by reference” certain information that we have filed with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This means we are disclosing important information to you by referring you to those documents. We incorporate by reference the documents listed below and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until the offering is terminated:
| ● | Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed on April 1, 2019; |
| ● | Current Reports on Form 8-K, filed on January 25, 2019, February 1, 2019, February 14, 2019 and April 9, 2019; and |
| ● | The description of Milestone’s Common Stock contained in its Registration Statement on Form S-2, filed on November 10, 2003, including any further amendment or report filed hereafter for the purpose of updating such description. |
You should rely only on the information incorporated by reference or provided in this prospectus. We have authorized no one to provide you with different information. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of this document. All documents that we file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus or after the date of the registration statement of which this prospectus forms a part and prior to the termination of the offering will be deemed to be incorporated in this prospectus by reference and will be a part of this prospectus from the date of the filing of the document. Any statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this prospectus modifies or supersedes that statement. Any statement that is modified or superseded will not constitute a part of this prospectus, except as modified or superseded.
We will provide, upon written or oral request, without charge to you, including any beneficial owner to whom this prospectus is delivered, a copy of any or all of the documents incorporated herein by reference other than the exhibits to those documents, unless the exhibits are specifically incorporated by reference into the information that this prospectus incorporates. You should direct a request for copies to us at Attention: Chief ExecutiveFinancial Officer, Leonard Osser,Joseph D’Agostino, Milestone Scientific Inc., 220 South Orange Avenue, Livingston New Jersey 07039 or you may call us at (973) 535-2717.
Certain information set forth in this prospectus or incorporated by reference in this prospectus may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “would,” “could,” “seek,” “intend,” “plan,” “estimate,” “goal,” “anticipate,” “project” or other comparable terms. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties included in this prospectus under the caption “Risk Factors,” and those risks and uncertainties described in the documents incorporated by reference into this prospectus. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the applicable cautionary statements. We further caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein or in the accompanying prospectus (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
This prospectus is part of a registration statement on Form S-3 that we filed with the SEC utilizing a “shelf” registration process. Under this shelf process, we may from time to time, sell any combination of securities described in this prospectus in one or more offerings. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of the securities being offered and risk factors specific to that offering.
We may add or modify in a prospectus supplement any of the information contained in this prospectus or in the documents that we have incorporated into this prospectus by reference. If there is any inconsistency between the information in this prospectus and a prospectus supplement, you should rely on the information in that prospectus supplement. You should read both this prospectus and any applicable prospectus supplement together with additional information described above under the heading “Where You Can Find More Information.”
When acquiring any securities discussed in this prospectus, you should rely on the information provided in this prospectus and the prospectus supplement, including the information incorporated by reference. Neither we, nor any underwriters or agents, have authorized anyone to provide you with different information. We are not offering the securities in any state where such an offer is prohibited. You should not assume that the information in this prospectus, any prospectus supplement, or any document incorporated by reference, is truthful or complete at any date other than the date mentioned on the cover page of those documents. You should also carefully review the section entitled “Risk Factors”, which highlights certain risks associated with an investment in our securities, to determine whether an investment in our securities is appropriate for you.
All references in this prospectusreport to “Milestone Scientific, Inc.,” “us,”, “our”, “we” or “Milestone Scientific” “our,” “we,” the “Company “or “Milestone” refer to Milestone Scientific Inc., and its wholly owned subsidiary,consolidated subsidiaries, Wand Dental, Inc., a Delaware corporation,Milestone Advanced Cosmetic Inc. and Milestone Medical Inc. and affiliate, Milestone Education LLC, unless the context otherwise indicates. Milestone has rights toScientific is the owner of the following registered U.S. trademarks:CompuDent®,; CompuMed®,; CompuFlo®, The Wand®,; The Wand Plus®,The SafetyWand®,DPS Dynamic Pressure Sensing Technologytechnology®; Milestone Scientific, and®; the Milestone logo®; Safety Wand®; STA Single Tooth Anesthesia™Anesthesia System, (STA Instrument, instruments®; and handpieces)The Wand®.
Investing in our securities involves a high degree of risk. You should carefully consider risk factors described in our Annual Report on Form 10-K for our fiscal year ended December 31, 20142018 (together with any material changes thereto contained in subsequently filed Quarterly Reports on Form 10-Q) and those contained in our other filings with the SEC, which are incorporated by reference in this prospectus and any accompanying prospectus supplement and all other information contained in this prospectus and in any supplementary prospectus relating to the offering of any of our securitiessecurities before purchasing any of our securities. securities. Some statements in this prospectus including statements in the risk factor below,, constitute forward-looking statements. Please refer to the section entitled “Forward-Looking Statements.”
The prospectus supplement applicable to each type or series of securities we offer may contain a discussion of risks applicable to the particular types of securities that we are offering under that prospectus supplement. Prior to making a decision about investing in our securities, you should carefully consider the specific factors discussed under the caption “Risk Factors” in the applicable prospectus supplement, together with all of the other information contained in the prospectus supplement or appearing or incorporated by reference in this prospectus. These risks could materially affect our business, results of operations or financial condition and cause the value of our securities to decline. You could lose all or part of your investment.
In addition, you should consider the following additional risk.
Our independent registered public accounting firm may conclude that thereTHE BUSINESS
Overview
Milestone Scientific is substantial doubt regarding our ability to continue as a going concern.
Our independent registered public accounting firm may conclude, in connection with the audit of our consolidated financial statements for the year ended December 31, 2015, or any other subsequent period, that there is substantial doubt regarding our ability to continue as a going concern. If our independent registered public accounting firm issues a “going concern” opinion, it could impair our ability to raise sufficient additional capital. If we fail to raise sufficient additional capital, we will not be able to completely execute our business plan. As a result, our business would be jeopardized and we may not be able to continue. If we ceased operations, it is likely that purchasers of our securities would lose their entire investment.
Business overview
We are a medicalbiomedical technology research and development company that patents, designs, develops and patentscommercializes innovative diagnostic and therapeutic injection technology. Our computer-controlled injection systems make injections precise, efficient,technologies and virtually painless.
devices for medical, dental, cosmetic and veterinary applications. Since our inception, we have engaged in pioneering proprietary, innovative, computer-controlled injection technologies and solutions for the medical and dental markets.
We have focused our energy and resources on redefining the worldwide standard of care for injection techniques by making the experience more comfortable for the patient and by reducing the anxiety and stress of administeringreceiving injections from the healthcare provider. Our computer-controlled injection systems make injections precise, efficient and virtually painless. Milestone’s proprietary DPS Dynamic Pressure Sensing technology is our technology platform that advances the development of next-generation devices, regulating flow rate and monitoring pressure from the tip of the needle, through platform extensions for local anesthesia for subcutaneous drug delivery, used in various dental injections, with specific applications for cosmetic botulinum toxin injections, epidural space identification in regional anesthesia procedures and intra-articular joint injections.
Our dental devices are sold in the United States, U.S. territories, Canada and in 60 other countries with FDA, CE and other clearances. Since receiving FDA clearance in 2017, our epidural devices have had minimal sales in the United States and Europe.
We remain 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 healthcare provider.
We and our technology are widely recognized by key opinion leaders, industry experts and medical and dental practitioners as the leader in the emerging, high growth, computer-controlled injection industry; and remains intent on expanding the use and application of its proprietary, patented technologies to achieve greater operational efficiencies, enhanced patient safety and therapeutic adherence, and improved quality of care within a broad range of medical disciplines.
In 1997, Milestone first introducedThe Wand® (CompuDent®instrument) and the disposableWandhandpiece.CompuDentprovides painless injections for all routine dental treatments, including root canals, crowns, fillings and cleanings. Milestone’s Computer-Controlled Local Anesthetic Delivery (C-CLAD) instrument handpiece does not look or feel like a syringe and works better than a syringe, resulting in a more pleasant experience for the patient and practitioner.
We subsequently expanded our product offerings with the introduction of theCompuMed® advanced injection instrument, designed for use in a wide range of applications within the medical industry, including cosmetic surgery, hair restoration surgery, podiatry, colorectal surgery, nasal and sinus surgery, dermatology and orthopedics, among others.
In 2007, Milestone received U.S. Food and Drug Administration (“FDA”) pre-market clearance for marketing and sale of theSTAinstruments (dental instrument) under section 510(k). Milestone introduced the instrument to the market in February 2007 and this instrument is currently being marketed throughout the world.
Central to our intellectual property platform and current product development strategy is our patentedCompuFlo® technology for the precise delivery of medicaments. TheCompuFlo pressure/force Computer-Controlled Local Anesthetic Delivery (C-CLAD) technology is an advanced, patented and FDA-approved medical technology for the painless and accurate delivery of drugs, anesthetics and other medicaments into all tissue types, as well as for the aspiration of bodily fluids or previously injected substances. Its regulation and control of flow rate continues to provide theCompuDentandCompuMedbenefits of painless injections, while itsDynamic Pressure Sensing® capability providestime objective visual and audible in-tissue pressure feedback, identifying tissue typesand continuing to the healthcare provider. This pressure feedback extends the benefitexpand platform applications;
● Following obtaining successful FDA clearance of painlessnessour first medical device in June 2017, Milestone Scientific is transitioning from anesthetics with known viscositiesa research and development organization to a wide rangecommercially focused medical device company;
● Commercializing our CompuFlo Epidural System, a transformative device for epidural anesthesia procedures;
● Expanding the global footprint of liquid drugs and other medicaments with varying viscosities and flow rates.Dynamic Pressure Sensing also allows the healthcare provider to know when certain types of tissues have been penetrated and permits the healthcare provider to inject medicaments precisely at the desired location. Thus, pressure feedback can prevent the suffusion of tissue outside the intended target area, a vitally important characteristic in the injection of chemotherapeutics and other toxic substances.
Theour CompuFlotechnology consists Epidural System by partnering with distribution companies worldwide; and
● Continuing the commercial launch of two critical elements. One element is the ability to determine exit pressureIn Situ (in theour proprietary cosmetic injection site tissue) at the tip of the needle in real time. This minimizes tissue damage (and eliminates the pain of the injection) because the flow rate and pressure of the injection are controlled. The other critical element of the technology is an integrated injection database of algorithms that have been defined which allowdevice for the measurement of the exit pressure. This database of algorithms contains the critical components of specific drugs, parameters of needles, tubing and syringes and all other pertinent components for the safe and efficacious delivery of medications for all procedures.
TheCompuFlo technology also consists of a disposable injection handpiece that provides for precise tactile control during the injection, an electromechanical (computer-controlled) fluid delivery instrument and the ability to record data from the injection event. As confirmed by numerous noted medical and dental experts within academia and the clinical practice arenas,CompuFlo has the potential to greatly increase the safety and efficacy of many drug delivery procedures that currently rely upon the over 150-year-old hypodermic syringe technology and the tactile senses and delivery expertise of the administrator.
On September 14, 2004, Milestone was issued United States Patent No. 6,786,885 for theCompuFlotechnology, entitled “Pressure/Force Computer Controlled Drug Delivery Instrument with Exit Pressure.” Proprietary software, working with an innovative technology, allows the instrument to continuously monitor and control the exit pressure of fluid and/or medication during an injection. This same technology also enables doctors to accurately identify different tissue types based on exit pressure during an injection. The technology has numerous applications in both medicine and dentistry, including epidural and intra-articular injections.
In December 2004, the United States Patent Office issued a “Notice of Allowance” for patent protection on two additional critical elements of theCompuFlo automated drug delivery technology: “Drug Delivery Instrument with Profiles” and “Pressure/Force Computer Controlled Drug Delivery with Automated Charging”.
In December 2005, Milestone submitted a pre-market notification to the FDA on itsCompuFlotechnology, which was subsequently cleared by the FDA in July of 2006. This initial submission was critical for Milestone’s continuing efforts to develop and commercialize this important technology. Milestone has identified a number of potential applications forCompuFlo, including single-tooth dental injections, self-administered drug delivery, osteoarthritis joint pain management and epidurals.
Given Milestone’s experience and established brand awareness within the dental industry, it elected to focus its initial product development efforts on the integration ofCompuFlo into its legacy computer-controlled dental injection instrument. As a result, Milestone developed the industry’s first solution for painlessly administering a single-tooth injectionbotulinum toxin (such as the only injection necessary for achieving anesthesia, foregoing the need to administer a traditional nerve branch block. This new instrument, which also provides for use of a disposable handpiece, was trademarked the “STA Single Tooth Anesthesia Instrument™Botox,” now more commonly known as the WandSTA Instrument.
After receiving FDA 510(k) Pre-market Notification acceptance for the marketing and sale of theSTA Instrument, Milestone introduced the instrument to market in February 2007 at the Chicago Dental Society’s 143rd Midwinter Meeting. The patentedSTA Instrumentincorporates the “pressure feedback” elements of Milestone’s patentedCompuFlo technology, thereby allowing dentists to administer injections accurately and painlessly into the periodontal ligament space, effectively anesthetizing a single tooth. This injection is of significant value in that it allows the dentist to profoundly anesthetize the tooth within one or two minutes, versus up to 15-18 minutes for a block injection to take effect. Utilizing theSTA Instrumentsingle tooth injection, the patient will suffer neither pain nor collateral anesthesia in the cheek, lips or tongue at any time. TheSTA Instrument is capable of performing all of the injections that can be done with a conventional dental syringe, including the palatal-anterior superior alveolar, anterior middle superior alveolar and inferior alveolar nerve block. TheSTA Instrument achieves these injections predictably and reliably.
Initial market response to theSTA Instrument following its commercial debut in February 2007 proved to be less than robust. Moreover, at that time, Milestone had granted exclusive U.S. and Canadian distribution and marketing rights for the STA Instrument to Henry Schein, Inc., the largest distributor of healthcare products and services to office-based practitioners in the combined North American and European markets. Following several months of lackluster sales and after making critical senior management changes, Milestone initiated an in-depth market study to reassess its positioning and marketing strategies for theSTA Instrument. The insight gained from this study led management to redefine and implement a new messaging platform, created to emphasize key benefits that Milestone discovered are of most value to dental professionals. This new product messaging was launched in January 2008 and has remained in constant review.
In the spring of 2009, Milestone signed an Exclusive Distribution and Marketing Agreement with China National Medicines Corporation, dba Sinopharm, which is China’s largest domestic manufacturer, distributor and marketer of pharmaceuticals and importer of medical devices and the country’s largest domestic distributor of dental anesthetic carpules to the Chinese dental industry. Prior to the end of 2009, China National Medicines issued Milestone a blanket purchase order for 12,000STA instruments and related handpieces to be delivered over 36 months, thereby marking Milestone’s initial penetration into China’s emerging dental market. The agreement was terminated in September 2014 and a new distributor, Milestone China Ltd., a Hong Kong corporation, owned forty (40) percent by Milestone, became the distributor for theSTA Instruments and handpieces in China.
In early October 2012, the State Food and Drug Administration (SFDA) of the People’s Republic of China approved Milestone’sSingle Tooth Anesthesia System® (STA System). Unfortunately, the SFDA bifurcated approval of theSTA Systems from theWand® handpieces. Approval of theWand® handpieces was received in May 2014 and the distribution of these handpieces has begun in China
According to a report published by the U.S. Department of Commerce, titled “China’s Emerging Markets: Opportunities in the Dental and Dental Lab Industry,” China’s dental market lags behind other healthcare services and has largely been neglected in the past. In fact, CS Market Research reports that “of China’s 1.3 billion plus population, 50% of the adults and 70% of the children are estimated to have decayed tooth problems, and over 90% have periodontal disease.” However, with increasing affluence of the Chinese population, as well as increasing attention towards personal care, demand for dental services has been growing. Market research firm Freedonia agrees, noting that demand for dental products in China is expected to climb due primarily to escalating personal income levels and government programs promoting awareness of the benefits of good oral care.
Shortly before the end of the second quarter of 2009, Milestone elected to refine its international marketing strategy to gain greater access to and penetration of the international dental markets. The new sales strategy provides for increasing hands-on oversight and support of its existing international distribution network, while also attracting new distributors throughout Europe, Asia and South America.
In November 2012, Milestone signed an exclusive distributor and marketing agreement with a well-known US domestic manufacturer and distributor, for the sale and distribution of theSTA instrument and handpieces in the United States and Canada. The marketing initiative will include participation in U.S. and Canadian dental shows, as well as pediatric dental shows; an active advertising initiative targeting major dental publications; and direct mailing campaigns to over 150,000 dentists across the U.S. and Canada. This agreement was amended in December 2015 to a non-exclusive distributor arrangement, which is scheduled to terminate in March 2016.
On January 1, 2016, Henry Schein accepted an arrangement to become a non-exclusive distributor for theSTA Instruments and handpieces in the USA and Canada. In addition, in August 2013, Milestone appointed Henry Schein as its exclusive distributor in the USA and Canada for theCompuDent handpieces.
CompuFlo® Advanced Injection Technology – Core Technology
TheCompuFlo technology is patented and embedded in theSTA InstrumentDysport that is being sold worldwide in the dental market.CompuFlotechnology has been tried and proven in human and animal studies, as well as by dentists in most parts of the world who are using theSTA Instrumentin their practices.
CompuFlo is a new technology for injections which enables health care practitioners to monitor and precisely control “pressure,” “rate” and “volume” during all injections and can be used to inject all liquid medicaments as well as anesthetics.CompuFlo can also be used to aspirate body fluids.
Negative side effects from the use of traditional hypodermic drug delivery injection instruments are well documented in dental and medical literature and include risk of death, transient or permanent paralysis, pain,
tissue damage and post-operative complications. The pain and tissue damage are a direct result of uncontrolled flow rates and pressures that are created during the administration of drug solutions into human tissue. While several technologies have been capable of controlling flow rate, the ability to accurately and precisely control pressure has been unobtainable until the development ofCompuFlo.
Precisely controlling in-tissue pressure increases patient safety by reducing the risk of tissue damage and post-treatment pain related to excessive pressure that may occur during certain injections. Identification of the tissue, in which the needle tip is imbedded, is believed to be highly important in epidural injections, intra-articular injections and numerous organ, subcutaneous and intramuscular injections.
CompuFlo’s pressure sensing technology provides an objective tool that consistently and accurately identifies the epidural space by detecting the difference in pressure between the ligamentum flavum and the extraligamentary tissue. In studies utilizing theCompuFlo technology the epidural space has been correctly identified 100% of the time. Knowing the precise location of a needle during an epidural injection procedure provides a measure of safety not presently available to doctors using conventional syringes, who identify the epidural space by relying on the subjective perception of loss of resistance to saline.
In the absence of curative procedures, arthritis patients are obliged to endure multiple painful injections annually for a lifetime. Often these injections are not efficacious, because the doctor using a syringe failed to locate the intra-articular space or did not inject the appropriate volume of hyaluronic acid or other medicament into that space. TheCompuFlo technology has been successful in administering viscous hyaluronic acid and other medicaments into the intra-articular space in both small and large joints using its computer-controlled pressure sensing capabilities in an independent animal study.
There are a number of injectable drugs routinely self-administered in a home or office setting using spring loaded automatic injection devices by people who suffer from long term chronic conditions such as Multiple Sclerosis diseases of the auto immune system and Rheumatoid Arthritis. TheCompuFlo technology, using pressure sensing capabilities, can serve as a painless subcutaneous injection method for these self-administered drugs. A significant reduction in pain during delivery should have a positive impact on compliance, which is a major consideration when physicians are treating patients.
Product Platform
Milestone has developed and brought to market a highly differentiated portfolio of industry innovations. Thus far, Milestone’s proprietary solutions have succeeded in elevating the state of the art in the professional dental arena. The product portfolio includes:
STA Single Tooth Anesthesia Instrument™ (Wand STA Instrument)
TheSTA Single Tooth Anesthesia Instrument™ (STA Instrument) is a patented, computer-controlled local anesthesia delivery instrument that incorporates the “pressure feedback” elements of Milestone’s patentedCompuFlo technology, thereby allowing dentists to administer injections accurately into the periodontal ligament space, effectively anesthetizing a single tooth. While the periodontal ligament injection has been available for some time, there has been no effective technology that allows dentists to easily perform the procedure painlessly, safely and predictably until now. With this unique procedure dentists can easily and predictably anesthetize a single tooth root in one minute as the primary and sole injection, as compared to a general blocking injection and waiting up to 18 minutes (or longer if the blocking injection needs to be re-administered) before proceeding to perform a procedure on the targeted tooth. An instrument which allows dentists to effectively anesthetize a single tooth will greatly enhance the productivity of dental practices and, when combined with the painless injection capabilities already present in theCompuDent instrument, such an instrument should provide a compelling value in the marketplace. TheSTA Instrumentwill generate recurring revenues from per-patient disposable handpieces.
Since its market introduction in the spring of 2007, theSTA Instrument has received favorable reviews and awards from the dental industry. In July 2007, noted industry publicationDentistry Today featured theSTA
Instrument as one of the “Top 100 Products in 2007,” helping to promote much broader recognition of the instrument and validatingSTA’s value proposition for dentists and patients, alike. In early 2008,Medical Device & Diagnostic Industrymagazine distinguished theSTA Instrumentas a 2008 Medical Design Excellence Award winner in the “Dental Instruments, Equipment and Supplies” product category. Of the 33 products to receive this coveted award, theSTA was one of only two winning products that serve dental practitioners. In December 2008, Milestone continued to win broad acclaim for theSTA Instrument by winning a “Townie Choice Award”. The “Townie Choice” awards were originally started by Dr. Howard Darran and Farran Media, publisher ofDentaltown Magazine, to assist dentists in making product purchasing decisions, and are considered the “people’s choice” of the products and services available to the dental industry today. That same month, theSTA Instrument was also named as aDental Products Report “Top 100 2008 Product of Distinction.” Additionally, theSTA Instrumentwas named one of Dentistry Today’s “Top 100 Products” for the third consecutive year in 2010.
CompuDent®
CompuDent(also known as theWand Plus® internationally) is Milestone’s proprietary, patented Computer-Controlled Local Anesthetic Delivery (C-CLAD) instrument and predecessor of theSTA Instrument.CompuDent delivers anesthesia at a precise and consistent rate below a patient’s pain threshold. Over the years,CompuDent has been widely heralded as a revolutionary instrument, considered one of the major advances in dentistry in the 20th Century. The instrument has been favorably evaluated in more than 50 peer reviewed or independent clinical research reports.CompuDent, including its ergonomically designed single-use handpieces (The Wand®), provides numerous, well documented benefits:.
DespiteCompuDent’s many benefits, including the administration of less painful and more comfortable injections, dentists in the United States have been slow to give up the use of traditional syringes. Dentists have all been trained to use syringes in dental school and often have become accustomed to and are comfortable with their use during many years of clinical practice, despite the obvious reluctance and/or fear of the patient in relation to injections administered by hypodermic syringe. There are approximately 40��million dental phobics, those people afraid to visit a dentist, in the United States. Therefore, Milestone believes there is a disconnect in the way dentists perceive their patients’ attitudes toward injection by hypodermic syringe. TheCompuDent is used today by thousands of dentists around the world, many of whom have long since abandoned the over 150-year old syringe.
CompuMed®
CompuMed is a patented computer-controlled injection instrument geared to the needs of the medical market and providing benefits similar toCompuDent. CompuMed allows many medical procedures, now requiring intravenous sedation, to be performed with only local anesthesia due to dramatic pain reduction. Also,
dosages of local anesthetic can often be significantly reduced, thus reducing side effects, accelerating recovery times, lowering costs and eliminating potential complications.CompuMed has accumulated clinical evidence demonstrating benefits from use in colorectal surgery; podiatry; dermatology, including surgery for the removal of basal cell carcinomas and other oncological dermatologic procedures; nasal and sinus surgery, including rhinoplasty; hair transplantation and cosmetic surgery, among others. TheCompuMed is being replaced by instruments that includeCompuFlo technology geared to specific medical disciplines.
The Wand®
The Wand handpiece is used in conjunction with theSTA, CompuDentand CompuMed instruments. It is an ergonomically designed and patented handpiece that enables all traditional and newer injections, such as AMSA, P-ASA and Modified-PDL, to be more comfortable and easier to deliver. Moreover, the pen-like grasp ofThe Wand allows bi-directional rotation during injection, which prevents needle deflection that occurs with a traditional syringe. A straighter path results in a more accurate injection, meaning fewer missed mandibularblocks, and more rapid onset of anesthesia. Missed blocks are reported in the literature to occur 30% of the time. This raises both patient anxiety and difficulties for the dentists in managing their business. While awaiting profound anesthesia, the dentist is losing time and money.
Competition
Milestone’s proprietary, patented Computer-Controlled Local Anesthesia Delivery (C-CLAD) instruments compete with disposable and reusable syringes that generally sell at lower prices and that use established and well-understood methodologies in both the dental and medical marketplaces.
Milestone’s instruments compete on the basis of their performance characteristics and the benefits provided to both the practitioner, patient and the dental business operations. Clinical studies have shown that the instruments reduce fear, pain and anxiety for many patients, and Milestone believes that they can reduce practitioner stress levels, as well. Milestone’s newest product introduction, theSTA Instrument, can be used for all dental injections that can be performed with a traditional dental syringe. Moreover, theSTA Instrument can also be used for new and modified dental injection techniques that cannot be performed with traditional syringes. These new techniques allow for faster procedures shortening chair-time, minimizing the numbing of the lips and facial muscles, enhancing practice productivity, reducing stress and virtually eliminating pain and anxiety for both the patient and the dentist.
Milestone faces intense competition from many companies in the medical and dental device industry, possessing substantially greater financial, marketing, personnel, and other resources. Most competitors have established reputations, stemming from their success in the development, sale, and service of competing dental products. Further, rapid technological change and research may affect the products. Current or new competitors could, at any time, introduce new or enhanced products with features that render the products less marketable or even obsolete. Therefore, Milestone must devote substantial efforts and financial resources to improve existing products, bring products to market quickly, and develop new products for related markets. In addition, the ability to compete successfully requires that Milestone establish an effective distribution network with a strong marketing plan. Historically, Milestone has been unsuccessful in executing the marketing plans for the products, primarily due to resource constraints. New products must be approved by regulatory authorities before they may be marketed. Milestone cannot assure you that it can compete successfully; that competitors will not develop technologies or products that render the products less marketable or obsolete; or, that Milestone will succeed in improving the existing products, effectively develop new products, or obtain required regulatory approval for those products.
Patents and Intellectual Property
Milestone holds the following U.S. utility and design patents:
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Milestone relies on a combination of patent, copyright, trade secret, and trademark laws and employee and third party non-disclosure agreements to protect intellectual property rights. Despite the precautions taken by Milestone to protect the products, unauthorized parties may attempt to reverse engineer, copy, or obtain and use products and information that Milestone regarded as proprietary, or may design products serving similar purposes that do not infringe on Milestone’s patents. Milestone’s failure to protect its proprietary information and the expenses of doing so could have a material adverse effect on the operating results and financial condition.
In the event that the products infringe upon patent or proprietary rights of others, Milestone may be required to modify processes or to obtain a license. There can be no assurance that Milestone would be able to do so in a timely manner, upon acceptable terms and conditions, or at all. The failure to do so would have a material adverse effect on Milestone.
Government Regulation
The FDA cleared theCompuDentinstrument and its disposable handpieces for marketing in the U.S. for dental applications in July 1996; theCompuMedinstrument for marketing in the U.S. for medical applications in May 2001; and, theSafety Wandfor marketing in the U.S. for dental applications in September 2003. For us to commercialize the other products in the U.S., Milestone will have to submit additional 510(k) applications with the FDA. Milestone received FDA 510 (k) approval for theSTA Instrumentin August 2006.
The manufacture and sale of medical devices and other medical products are subject to extensive regulation by the FDA pursuant to the FDC Act, and by other federal, state and foreign authorities. Under the FDC Act,
medical devices must receive FDA clearance before they can be marketed commercially in the U.S. Some medical products must undergo rigorous pre-clinical and clinical testing and an extensive FDA approval process before they can be marketed. These processes can take a number of years and require the expenditure of substantial resources. The time required for completing such testing and obtaining such approvals is uncertain, and FDA clearance may never be obtained. Delays or rejections may be encountered based upon changes in FDA policy during the period of product development and FDA regulatory review of each product submitted. Similar delays also may be encountered in other countries. Following the enactment of the Medical Device Amendments to the FDC Act in May 1976, the FDA classified medical devices in commercial distribution into one of three classes. This classification is based on the controls necessary to reasonably ensure the safety and effectiveness of the medical device. Class I devices are those devices whose safety and effectiveness can reasonably be ensured through general controls, such as adequate labeling, pre-market notification, and adherence to the FDA’s Quality Systems Regulation (“QSR”), also referred to as “Good Manufacturing Practices” (“GMP”) regulations. Some Class I devices are further exempted from some of the general controls. Class II devices are those devices whose safety and effectiveness reasonably can be ensured through the use of special controls, such as performance standards, post-market surveillance, patient registries, and FDA guidelines. Class III devices are those which must receive pre-market approval by the FDA to ensure their safety and effectiveness. Generally, Class III devices are limited to life-sustaining, life-supporting or implantable devices.
If a manufacturer or distributor can establish that a proposed device is “substantially equivalent” to a legally marketed Class I or Class II medical device or to a Class III medical device for which the FDA has not required pre-market approval, the manufacturer or distributor may seek FDA marketing clearance for the device by filing a 510(k) Pre-market Notification. The 510(k) Pre-market Notification and the claim of substantial equivalence may have to be supported by various types of data and materials, including test results indicating that the device is as safe and effective for its intended use as a legally marketed predicate device. Following submission of the 510(k) Pre-market Notification, the manufacturer or distributor may not place the device into commercial distribution until an order is issued by the FDA. By regulation, the FDA has no specific time limit by which it must respond to a 510(k) Pre-market Notification. At this time, the FDA typically responds to the submission of a 510(k) Pre-market Notification within 180 days. The FDA response may declare that the device is substantially equivalent to another legally marketed device and allow the proposed device to be marketed in the U.S. However, the FDA may determine that the proposed device is not substantially equivalent or may require further information, such as additional test data, before the FDA is able to make a determination regarding substantial equivalence. Such determination or request for additional information could delay market introduction of products and could have a material adverse effect on us. If a device that has obtained 510(k) Pre-market Notification clearance is changed or modified in design, components, method of manufacture, or intended use, such that the safety or effectiveness of the device could be significantly affected, separate 510(k) Pre-market Notification clearance must be obtained before the modified device can be marketed in the U.S. If a manufacturer or distributor cannot establish that a proposed device is substantially equivalent to a legally marketed device, the manufacturer or distributor will have to seek pre-market approval of the proposed device, a more difficult procedure requiring extensive data, including pre-clinical and human clinical trial data, as well as extensive literature to prove the safety and efficacy of the device.
Though theSTA Instrument, CompuDent, theSafety WandandCompuMedhave received FDA marketing clearance, there can be no assurance that any of the other products under development will obtain the required regulatory clearance in a timely manner, or at all. If regulatory clearance of a product is granted, such clearance may entail limitations on the indicated uses for which the product may be marketed. In addition, modifications may be made to the products to incorporate and enhance their functionality and performance based upon new data and design review. There can be no assurance that the FDA will not request additional information relating to product improvements; that any such improvements would not require further regulatory review, thereby delaying the testing, approval and commercialization of product improvements; or, that ultimately any such improvements will receive FDA clearance.
Compliance with applicable regulatory requirements is subject to continual review and will be monitored through periodic inspections by the FDA. Later discovery of previously unknown problems with a product, manufacturer, or facility may result in restrictions on such product or manufacturer, including fines, delays or suspensions of regulatory clearances, seizures or recalls of products, operating restrictions and criminal prosecution and could have a material adverse effect on Milestone.
Milestone is subject to pervasive and continuing regulation by the FDA, whose regulations require manufacturers of medical devices to adhere to certain QSR requirements as defined by the FDC Act. QSR compliance requires testing, quality control and documentation procedures. Failure to comply with QSR requirements can result in the suspension or termination of production, product recall or fines and penalties. Products also must be manufactured in registered establishments. In addition, labeling and promotional activities are subject to scrutiny by the FDA and, in certain circumstances, by the Federal Trade Commission. The export of devices is also subject to regulation in certain instances.
The Medical Device Reporting (“MDR”) regulation obligates us to provide information to the FDA on product malfunctions or injuries alleged to have been associated with the use of the product or in connection with certain product failures that could cause serious injury. If, as a result of FDA inspections, MDR reports or other information, the FDA believes that Milestone is not in compliance with the law, the FDA can institute proceedings to detain or seize products, enjoin future violations, or assess civil and/or criminal penalties against us, the officers or employees. Any action by the FDA could result in disruption of operations for an undetermined time.
In March 2012, Milestone received approval for theWand STA Single Tooth Anesthesia Instrument from ANVISA in Brazil. In June 2007, Milestone received a CE mark for the marketing of theSTA Instrument in Europe. In June 2003 Milestone received a CE mark for marketing of theSafety WandandThe WandHandpieces with Needle in Europe. In July 2003, Milestone obtained regulatory approval to sellCompuDentand its handpieces in Australia and New Zealand.
As of May 2014, China National Medicines received the appropriate registration approval from the regulatory body in China, therefore, shipment ofSTA handpieces began in China. In the fourth quarter of 2014, the distribution agreement with China National Medicines was terminated and Milestone China Ltd. (owned 40% by Milestone Scientific) became the authorized distributor of theSTA instruments and handpieces in China.
Product Liability
Failure to use any of the products in accordance with recommended operating procedures could potentially result in health hazards or injury. Failures of the products to function properly could subject Milestone to claims of liability. Milestone maintains liability insurance in an amount that Milestone believes is adequate. However, there can be no assurance that the insurance coverage will be sufficient to pay product liability claims brought against Milestone. A partially or completely uninsured claim, if successful and of significant magnitude, could have a material adverse effect on Milestone.
Corporate Information
We were organized in August 1989 under the laws of the State of Delaware. Our principal executive office is located at 220 South Orange Avenue, Livingston, New Jersey 07039 and our telephone number is (973) 535-2717. Our web address iswww.milestonescientific.com. None of the information www.milestonescientific.com. Information contained on or accessed through our website is not part of this prospectus.
We currently intend to use
Unless otherwise indicated in the estimated net proceeds from the sale of these securities for general corporate and working capital purposes, including the funding of strategic initiatives that we may undertake from time to time. We have not yet determined the amount of net proceeds to be used specifically for any of the foregoing purposes. Accordingly, our management will have significant discretion and flexibility in applyingprospectus supplement, the net proceeds from the sale of these securities. Our plans tosecurities offered by this prospectus will be used for general corporate purposes and working capital requirements, which may include, among other things, the repayment or repurchase of debt obligations and other capital expenditures. We may also use a portion of the estimated net proceeds fromfor licensing or acquiring intellectual property or technologies to incorporate into our products and product candidates or our research and development programs, capital expenditures, to fund possible investments in and acquisitions of complementary businesses or partnerships. We have not determined the saleamounts we plan to spend on the areas listed above or the timing of these securities may change,expenditures, and if they do, we have no current plans with respect to acquisitions as of the date of this prospectus. As a result, unless otherwise indicated in the prospectus supplement, our management will update this informationhave broad discretion to allocate the net proceeds of the offerings. Pending their ultimate use, we intend to invest the net proceeds in a prospectus supplement.
DESCRIPTION OF COMMON STOCKSTOCK WE MAY OFFER
The following description of our common stockstock is only a summary. This description and the description contained in any prospectus supplement is subject to, and qualified in its entirety by reference to, our restated certificate of incorporation and bylaws, each as amended, each of which has previously been filed with the SEC and the Delaware General Corporation Law (“DCGL”).
Common StockStock
Our authorized capital stock includes 50,000,000 shares of common stock, par value $0.001 per share. As of the date of this prospectus, there are 21,720,49740,855,720 shares of common stock issued, of which 21,687,16440,822,387 were outstanding and 33,333 shares were held in the treasury.
Subject to preferences that may apply to preferred shares outstanding at the time, the holders of outstanding common stock are entitled to receive dividends out of assets legally available therefor at such times and in such amounts as the boardBoard of directorsDirectors may from time to time determine. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Directors are elected by plurality vote. Therefore, the holders of a majority of the common stock voted can elect all of the directors then standing for election. The common stock is not entitled to preemptive rights and are not subject to conversion. If we are liquidated or dissolved or our business is otherwise wound up, the holders of common stock would be entitled to share ratably in the distribution of all of our assets remaining available for distribution after satisfaction of all our liabilities and the payment of the liquidation preference of any outstanding preferred shares. Each outstanding share of common stock is, and all shares of common stock to be outstanding upon completion of any offering under the registration statement of which this prospectus forms a part, will be, fully paid and nonassessable.non-assessable.
Authorized but Unissued Common StockStock
The DCGL does not require stockholder approval for any issuance of authorized shares, except in certain limited circumstances. However, the listing requirements of the NYSE MKTS,American, which would apply for so long as our common stock are listed on the NYSE MKTS,American, require stockholder approval of certain issuances (other than a public offering) equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of common stock, as well as for certain issuances of stock in compensatory transactions. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions. One of the effects of the existence of unissued and unreserved shares of common stock may be to enable our boardBoard of directorsDirectors to sell shares to persons friendly to current management, for such consideration, in form and amount, as is acceptable to the board,Board, which issuance could render more difficult or discourage an attempt to obtain control of our companyus by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive stockholders of opportunities to sell their common stock at prices higher than prevailing market prices.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Continental Stock Transfer & Trust Company.
DESCRIPTION OF PREFERRED STOCK AND PREFERRED STOCK WE MAY OFFER
The following description of the terms of our preferred stock is only a summary. This description and the description contained in any prospectus supplement is subject to, and qualified in its entirety by reference to, our restated certificate of incorporation and bylaws, each as amended, each of which has previously been filed with the SEC and the DGCL. In addition, the specific terms of any series of preferred shares will be described in the applicable prospectus supplement.
Our restated certificate of incorporation authorizes us to issue up to 5,000,000 shares of undesignated preferred stock, par value $0.001 per share. We may issue preferred stock from time to time in one or more series, without shareholder approval, when authorized by our boardBoard of directors.Directors. As of May 14, 2014, our boardBoard of directorsDirectors had authorized 7,000 shares of Series A Convertible Preferred Stock (described below), all of which are issued and outstanding. No other shares of preferred stock were issued or are outstanding.
This section describes the general terms and provisions of the preferred stock we may offer as well as the terms of our Series A Stock which may affect other securities that we may offer by this prospectus. This information may not be complete in all respects and is qualified entirely by reference to our certificate of incorporation, with respect to each series of preferred stock, including the Series A Convertible Preferred Stock.
The specific terms of any series of preferred stock will be described in a prospectus supplement. Those terms may differ from the terms discussed below. Any series of preferred stock we issue will be governed by our certificate of incorporation and by the certificate of designations relating to that series. We will file the certificate of designations with the SEC and incorporate it by reference as an exhibit to our registration statement at or before the time we issue any preferred stock of that series.
Series AConvertible Preferred Stock
In May 2014, Milestone issued 7,000 shares of Series A Convertible Preferred Stock (the “Series A Stock”), with a stated value of $1,000 per share to an accredited investor for $7 million in a Rule 506, Regulation D offering. The Series A Stock votes together with the common stock on an as converted basis and as a single class, except that such shares have class voting rights as to amendments to the certificate of incorporation adversely affecting the Series A Stock, increases in the number of authorized shares of Series A Stock, issuance of additional shares of Series A Stock, increases in the size of the boardBoard prior to the time the holders of the Series A Stock no longer have a right to nominate a designee for election to the board or issuance of “senior stock” or “parity stock.” The Series A Stock is also entitled to a liquidation preference equal to the greater of 100% of its $1,000 per share stated value or the amount the Series A Stock would receive on conversion into common stock andstock.
The Series A Stock is convertible, into common stock at $2.545 per share at the option of the holder, orinto the number of shares of common stock equal to the stated value divided by $2.545, subject to anti-dilution adjustments, at any time before May 14, 2019. The Series A Stock is mandatorily convertible at this price on May 14, 2019, unless certain “threshold” prices haveinto the number of shares of common stock equal to the stated value divided by $2.545 per share or $1.50 per share if the common stock does not been achieved priortrade at $3.15 for period of time, as defined by the Series A Stock certificate of designations, both subject to that date.anti-dilution adjustment. The conversion ratio and anti-dilution adjustment becomes effective if a triggering events occur such as; issuance of stock dividends or distributions, subdivisions, splits, issuance of stock purchase rights, debt and distributions, cash dividends or distributions, self-tender offers and exchange offers, rights plans and issuance below the conversion price, as defined in the Series A Stock certificate of designations.
Future Classes oror Series of Preferred Stock
Our boardBoard of directorsDirectors is authorized, without shareholder approval, to issue additional series of preferred stock with conversion and other rights that may adversely affect the rights of holders of our common stock or other series of preferred stock that may be outstanding.
Upon issuance of a new series of preferred stock, our boardBoard of directorsDirectors is authorized, to specify:
● | the number of shares to be included in the series; | |
● | the annual dividend rate for the series, if any, and any restrictions or conditions on the payment of dividends; | |
● | the redemption price, if any, and the terms and conditions of redemption; | |
● | any sinking fund provisions for the purchase or redemption of the series; | |
● | if the series is convertible, the terms and conditions of conversion; | |
● | the amounts payable to holders upon our liquidation, dissolution or winding up; and | |
● | any other rights, preferences and limitations relating to the series, including voting rights. |
Specific Terms of a Series of Preferred Stock
The new preferred stock we may offer will be issued in one or more series. The preferred stock will have the dividend, liquidation, redemption and voting rights discussed below, unless otherwise described in a prospectus supplement relating to a particular series. A prospectus supplement will discuss the following features of the series of preferred stock to which it relates:
● | the designations and stated value per share; | |
● | the number of shares offered; | |
● | the amount of liquidation preference per share; | |
● | the public offering price at which the preferred stock will be issued; | |
● | the dividend rate, the method of its calculation, the dates on which dividends would be paid and the dates, if any, from which dividends would cumulate; | |
● | any redemption or sinking fund provisions; | |
● | any conversion or exchange rights; and | |
● | any additional voting, dividend, liquidation, redemption, sinking fund and other rights, preferences, privileges, limitations and restrictions. |
Rank
. Unless otherwise stated in the prospectus supplement, the new preferred stock will have priority over our common stock with respect to dividends and distribution of assets, but will rank junior to all our outstanding indebtedness for borrowed money. Any series of preferred stock could rank senior, equal or junior to our other capital stock, as may be specified in a prospectus supplement, as long as our certificate of incorporation so permit.
Dividends
. Holders of each series of newly issued preferred stock shall be entitled to receive cash dividends to the extent specified in the prospectus supplement when, as and if declared by our boardBoard of directors,Directors, from funds legally available for the payment of dividends. The rates and dates of payment of dividends of each series of preferred stock will be stated in the prospectus supplement. Dividends will be payable to the holders of record of preferred stock as they appear on our books on the record dates fixed by our boardBoard of directors.Directors. Dividends on any series of preferred stock may be cumulative or non-cumulative, as discussed in the applicable prospectus supplement.
Convertibility
. Shares of a new series of preferred stock may be exchangeable or convertible into shares of our common stock, another series of preferred stock or other securities or property. The conversion or exchange may be mandatory or optional. The prospectus supplement will specify whether the preferred stock being offered has any conversion or exchange features, and will describe all the related terms and conditions.
Redemption
. The terms, if any, on which shares of preferred stock of a new series may be redeemed will be discussed in the applicable prospectus supplement.
Liquidation
. Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of Milestone, holders of each series of newly issued preferred stock will be entitled to receive distributions upon liquidation in the amount described in the related prospectus supplement. These distributions will be made before any distribution is made on any securities ranking junior to the preferred stock with respect to liquidation, including our common stock. If the liquidation amounts payable relating to the preferred stock of any series and any other securities ranking on a parity regarding liquidation rights are not paid in full, the holders of the preferred stock of that series will share ratably in proportion to the full liquidation preferences of each security. Holders of our preferred stock will not be entitled to any other amounts from us after they have received their full liquidation preference.
Voting
. The holders of preferred stock of each new series will have no voting rights, except as required by law and as described below or in a prospectus supplement. Our boardBoard of directorsDirectors may, upon issuance of a series of preferred stock, grant voting rights to the holders of that series to elect additional board members if we fail to pay dividends in a timely fashion.
Without the affirmative vote of a majority of the shares of preferred stock of any series then outstanding, we may not:
No Other Rights
. The shares of a new series of preferred stock will not have any preferences, voting powers or relative, participating, optional or other special rights except:
● | as discussed above or in the prospectus supplement; | |
● | as provided in our certificate of incorporation and in the certificate of designations; and | |
● | as otherwise required by law. |
DESCRIPTION OF WARRANTS WE MAY OFFER
The following description of warrants is only a summary. This description is subject to, and qualified in its entirety by reference to, the provisions of the applicable warrant agreement.
We may issue warrants for the purchase of debt securities, preferred stock, common stock or units. Warrants may be issued independently or together with debt securities, preferred stock, common stock or units and may be attached to or separate from any offered securities. Any issueissuance of warrants will be governed by the terms of the applicable form of warrant and any related warrant agreement, which we will file as an exhibit to our registration statement at or before the time we issue any warrants.
The particular terms of any issue of warrants will be described in the prospectus supplement relating to the issue. Those terms may include:
● | the title of such warrants; | |
● | the aggregate number of such warrants; | |
● | the price or prices at which such warrants will be issued; |
● | the currency or currencies (including composite currencies) in which the price of such warrants may be payable; | |
● | the terms of the securities purchasable upon exercise of such warrants and the procedures and conditions relating to the exercise of such warrants; | |
● | the price at which the securities purchasable upon exercise of such warrants may be purchased; | |
● | the date on which the right to exercise such warrants will commence and the date on which such right shall expire; | |
● | any provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of the warrants; | |
● | if applicable, the minimum or maximum amount of such warrants that may be exercised at any one time; | |
● | if applicable, the designation and terms of the securities with which such warrants are issued and the number of such warrants issued with each such security; | |
● | if applicable, the date on and after which such warrants and the related securities will be separately transferable; | |
● | information with respect to book-entry procedures, if any; and | |
● | any other terms of such warrants, including terms, procedures and limitations relating to the exchange or exercise of such warrants. |
The prospectus supplement relating to any warrants to purchase equity securities may also include, if applicable, a discussion of certain U.S. federal income tax and ERISA considerations.
Warrants for the purchase of preferred stock and common stock will be offered and exercisable for U.S. dollars only.
Each warrant will entitle its holder to purchase the principal amount of debt securities or the number of shares of preferred stock, common stock or units at the exercise price set forth in, or calculable as set forth in, the applicable prospectus supplement.
After the close of business on the expiration date, unexercised warrants will become void. We will specify the place or places where, and the manner in which, warrants may be exercised in the applicable prospectus supplement.
Prior to the exercise of any warrants to purchase debt securities, preferred stock, common stock or units, holders of the warrants will not have any of the rights of holders of the debt securities, preferred stock, common stock or units purchasable upon exercise.
DESCRIPTION OF DEBT SECURITIES WE MAY OFFER
The following description of the terms of debt securities that we may issue and the related indenture, if any, is only a summary. This description and the description contained in any prospectus supplement are subject to and qualified in their entirety by reference to the applicable indentures, which will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part.
We may offer secured or unsecured debt securities in one or more series which may be senior, subordinated or junior subordinated, and which may be convertible or exchangeable into another security. Unless otherwise specified in the applicable prospectus supplement, our debt securities will be issued in one or more series under an indenture to be entered into by us and a bank or trust company. As of the date of this prospectus, we have not entered into any indenture agreements.
The following description briefly sets forth certain general terms and provisions of the debt securities. The particular terms of the debt securities offered by any prospectus supplement and the extent, if any, to which these general provisions may apply to the debt securities, will be described in the applicable prospectus supplement.
The terms of the debt securities will include those set forth in the applicable indenture and those made a part of the applicable indenture by the Trust Indenture Act of 1939, or TIA, if any. You should read this summary, the applicable prospectus supplement and the provisions of the applicable indenture or supplemental indenture, if any, in their entirety before investing in our debt securities.
The aggregate principal amount of debt securities that may be issued under the respective indentures may be unlimited. The prospectus supplement relating to any series of debt securities that we may offer will contain the specific terms of the debt securities. These terms may include the following:
● | the issuer or co-obligors of such debt securities; | |
● | the guarantors of each series, if any, and the terms of the guarantees (including provisions relating to seniority, subordination and release of the guarantees), if any; | |
● | the title and aggregate principal amount of the debt securities and any limit on the aggregate principal amount; | |
● | whether the debt securities will be senior, subordinated or junior subordinated; | |
● | whether the debt securities will be secured or unsecured; | |
● | any applicable subordination provisions; | |
● | the maturity date(s) or method for determining same; | |
● | the interest rate(s) or the method for determining same; | |
● | the dates on which interest will accrue or the method for determining dates on which interest will accrue and dates on which interest will be payable and whether interest shall be payable in cash or additional securities; | |
● | whether the debt securities are convertible or exchangeable into other securities and any related terms and conditions; | |
● | redemption or early repayment provisions; | |
● | authorized denominations; | |
● | form; | |
● | if other than the principal amount, the principal amount of debt securities payable upon acceleration; | |
● | place(s) where payment of principal and interest may be made, where debt securities may be presented and where notices or demands upon the company may be made; | |
● | whether such debt securities will be issued in whole or in part in the form of one or more global securities and the date as of which the securities are dated if other than the date of original issuance; | |
● | amount of discount or premium, if any, with which such debt securities will be issued; | |
● | any covenants applicable to the particular debt securities being issued; | |
● | any defaults and events of default applicable to the particular debt securities being issued; | |
● | the currency, currencies or currency units in which the purchase price for, the principal of and any premium and any interest on, such debt securities will be payable; | |
● | the time period within which, the manner in which and the terms and conditions upon which the holders of the debt securities or the issuer or co-obligors, as the case may be, can select the payment currency; | |
● | our obligation or right to redeem, purchase or repay debt securities under a sinking fund, amortization or analogous provision; | |
● | any restriction or conditions on the transferability of the debt securities; | |
● | the securities exchange(s) on which the debt securities will be listed, if any; | |
● | whether any underwriter(s) will act as a market maker(s) for the debt securities; | |
● | the extent to which a secondary market for the debt securities is expected to develop; | |
● | provisions granting special rights to holders of the debt securities upon occurrence of specified events; | |
● | compensation payable to and/or reimbursement of expenses of the trustee of the series of debt securities; | |
● | provisions for the defeasance of the debt securities or related to satisfaction and discharge of the indenture; | |
● | provisions relating to the modification of the indenture both with and without the consent of holders of debt securities issued under the indenture and the execution of supplemental indentures for such series; and | |
● | any other terms of the debt securities (which terms shall not be inconsistent with the provisions of the TIA, but may modify, amend, supplement or delete any of the terms of the indenture with respect to such series debt securities). |
General
General
We may sell the debt securities, including original issue discount securities, at par or at a substantial discount below their stated principal amount. Unless we inform you otherwise in a prospectus supplement, we may issue additional debt securities of a particular series without the consent of the holders of the debt securities of such series or any other series outstanding at the time of issuance. Any such additional debt securities, together with all other outstanding debt securities of that series, will constitute a single series of securities under the applicable indenture.
We will describe in the applicable prospectus supplement any other special considerations for any debt securities we sell which are denominated in a currency or currency unit other than U.S. dollars. In addition, debt securities may be issued where the amount of principal and/or interest payable is determined by reference to one or more currency exchange rates, commodity prices, equity indices or other factors. Holders of such securities may receive a principal amount or a payment of interest that is greater than or less than the amount of principal or interest otherwise payable on such dates, depending upon the value of the applicable currencies, commodities, equity indices or other factors. Information as to the methods for determining the amount of principal or interest, if any, payable on any date, the currencies, commodities, equity indices or other factors to which the amount payable on such date is linked.
United States federal income tax consequences and special considerations, if any, applicable to any such series will be described in the applicable prospectus supplement. Unless we inform you otherwise in the applicable prospectus supplement, the debt securities will not be listed on any securities exchange.
We expect most debt securities to be issued in fully registered form without coupons and in denominations of U.S. $2,000 and any integral multiples of $1,000 in excess thereof. Subject to the limitations provided in the applicable indenture and in the prospectus supplement, debt securities that are issued in registered form may be transferred or exchanged at the designated corporate trust office of the trustee, without the payment of any service charge, other than any tax or other governmental charge payable in connection therewith.
Global Securities
Unless we inform you otherwise in the applicable prospectus supplement, the debt securities of a series may be issued in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depositary identified in the applicable prospectus supplement. Global securities will be issued in registered form and in either temporary or definitive form. Unless and until it is exchanged in whole or in part for the individual debt securities, a global security may not be transferred except as a whole by the depositary for such global security to a nominee of such depositary or by a nominee of such depositary to such depositary or another nominee of such depositary or by such depositary or any such nominee to a successor of such depositary or a nominee of such successor. The specific terms of the depositary arrangement with respect to any debt securities of a series and the rights of and limitations upon owners of beneficial interests in a global security will be described in the applicable prospectus supplement.
Governing Law
The indentures and the corresponding debt securities shall be construed in accordance with and governed by the laws of the State of Delaware.
DESCRIPTION OF UNITS WE MAY OFFER
We may issue units consisting of a combination of two or more of any offered securities, at a single price or at a separate price for each security included in the unit. The securities offered may be issued separately or may be evidenced by a separate unit certificate, which may or may not trade separately. The terms and conditions governing the issuance of any units, including the form and content of any certificate evidencing the units, will be described in detail in the prospectus supplement to be filed in connection with the offering of such units.
PLAN OF DISTRIBUTION
We may sell the securities offered bythrough this prospectus (1) to one or morethrough underwriters or dealers, for public offering, through agents,(2) directly to purchasers, including our affiliates, (3) through agents, or (4) through a combination of any such methods of sale.these methods. The name of any such underwriters, dealers or agents involved in the offer and sale of the securities, the amounts underwritten and the nature of its obligation to take the securities will be specified in the applicable prospectus supplement. We have reserved the right to sell the securities directly to investors on our own behalf in those jurisdictions where we are authorized to do so. The sale of the securities may be effected in transactions (a) on any national or international securities exchange or quotation service on which the securities may be listed or quoted at the time of sale, (b) in the over-the-counter market, (c) in transactions otherwise than on such exchanges or in the over-the-counter market or (d) through the writing of options.
We and our agents and underwriters, may offer and sell the securitiesdistributed at a fixed price or prices, thatwhich may be changed, at market prices prevailing at the time of sale, at prices related to suchthe prevailing market prices, or at negotiated prices. The securities may be offered on an exchange, whichprospectus supplement will be disclosedinclude the following information:
● | the terms of the offering; |
● | the names of any underwriters or agents; |
● | the name or names of any managing underwriter or underwriters; |
● | the purchase price of the securities; |
● | the net proceeds from the sale of the securities; |
● | any delayed delivery arrangements; |
● | any underwriting discounts, commissions and other items constituting underwriters’ compensation; |
● | any initial public offering price; |
● | any discounts or concessions allowed or reallowed or paid to dealers; and |
● | any commissions paid to agents. |
Sale through underwriters or dealers
If underwriters are used in the applicable prospectus supplement. Wesale, the underwriters will acquire the securities for their own account, including through underwriting, purchase, security lending or repurchase agreements with us. The underwriters may resell the securities from time to time authorize dealers, acting as our agents, to offer and sell the securities upon such terms and conditions as set forth in the applicable prospectus supplement.
If we use underwriters to sell securities, we will enter into an underwriting agreement with them at the time of the sale to them. In connection with the sale of the securities, underwriters may receive compensation from us in the form of underwriting discountsone or commissions and may also receive commissions from purchasers of the securities for whom they may act as agent. Any underwriting compensation paid by us to underwriters or agents in connection with the offering of the securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers, will be set forth in the applicable prospectus supplement to the extent required by applicable law.more transactions, including negotiated transactions. Underwriters may sell the securities in order to facilitate transactions in any of our other securities (described in this prospectus or otherwise), including other public or private transactions and short sales. Underwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless otherwise indicated in the prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all the offered securities if they purchase any of them. The underwriters may change from time to time any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers.
If dealers are used in the sale of securities offered through this prospectus, we will sell the securities to them as principals. They may then resell those securities to the public at varying prices determined by the dealers at the time of resale. The prospectus supplement will include the names of the dealers and the terms of the transaction.
Direct sales and sales through agents
We may sell the securities offered through this prospectus directly. In this case, no underwriters or agents would be involved. Such securities may also be sold through agents designated from time to time. The prospectus supplement will name any agent involved in the offer or sale of the offered securities and will describe any commissions payable to the agent. Unless otherwise indicated in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.
We may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those securities. The terms of any such sales will be described in the prospectus supplement.
Underwriter, dealer or agent discounts and commissions
Underwriters, dealers or agents may receive compensation in the form of discounts, concessions or commissions from us or our purchasers as their agents in connection with the sale of securities. These underwriters, dealers or agents may be considered to be underwriters under the Securities Act. As a result, discounts, commissions, or profits on resale received by the underwriters, dealers or commissions (whichagents may be treated as underwriting discounts and commissions. Each prospectus supplement will identify any such underwriter, dealer or agent, and describe any compensation received by them from us. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time) fromtime. The maximum commission or discount to be received by any underwriter, dealer or agent will not be greater than eight percent (8%) of the purchasers for whom they may act as agents.
Dealers and agents participating in the distributionmaximum gross proceeds of the securities that may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and commissionssold under the Securities Act. Unless otherwise indicated in the applicable prospectus supplement, an agent will be acting on a best efforts basis and a dealer will purchase debt securities as a principal, and may then resell the debt securities at varying prices to be determined by the dealer.this prospectus.
Delayed delivery contracts
If so indicated in the prospectus supplement indicates, we willmay authorize agents, underwriters dealers or agentsdealers to solicit offers byfrom certain specifiedtypes of institutions to purchase offered securities from us at the public offering price set forth in the prospectus supplement pursuant tounder delayed delivery contracts. These contracts providingwould provide for payment and delivery on a specified date in the future. SuchThe contracts willwould be subject only to anythose conditions set forthdescribed in the prospectus supplement. The applicable prospectus supplement and the prospectus supplement will set forthdescribe the commission payable for solicitation of suchthose contracts. The underwriters
Market making, stabilization and other persons soliciting such contractstransactions
Unless the applicable prospectus supplement states otherwise, each series of offered securities will be a new issue and will have no responsibility for the validity or performanceestablished trading market. We may elect to list any series of any such contracts.
Underwriters, dealers and agents may be entitled, under agreements entered into with us, to indemnification against and contribution towards certain civil liabilities, including any liabilities under the Securities Act.
To facilitate the offering ofoffered securities certain persons participatingon an exchange. Any underwriters that we use in the offeringsale of offered securities may make a market in such securities, but may discontinue such market making at any time without notice. Therefore, we cannot assure you that the securities will have a liquid trading market.
Any underwriter may also engage in stabilizing transactions, that stabilize, maintain, or otherwise affect the price of the securities. These may include over-allotment, stabilization, syndicate short covering transactions and penalty bids. Over-allotment involves salesbids in excess ofaccordance with Rule 104 under the offering size, which creates a short position.Exchange Act. Stabilizing transactions involve bids to purchase the underlying security so long asin the stabilizing bids do not exceed a specified maximum.open market for the purpose of pegging, fixing or maintaining the price of the securities. Syndicate short covering transactions involve purchases of the securities in the open market after the distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the underwriters to reclaim a selling concessionsconcession from dealersa syndicate member when the securities originally sold by the dealerssyndicate member are purchased in a syndicate covering transactionstransaction to cover syndicate short positions. TheseStabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the securities sold in an offering to be higher than it would otherwise be. Thesebe in the absence of the transactions. The underwriters may, if they commence these transactions, if commenced, may be discontinued by the underwritersdiscontinue them at any time.
Any securities
Derivative transactions and hedging
The underwriters or other than our common stock issued hereunderagents may be new issuesengage in derivative transactions involving the securities. These derivatives may consist of securities with no established trading market. Anyshort sale transactions and other hedging activities. The underwriters or agents may acquire a long or short position in the securities, hold or resell securities acquired and purchase options or futures on the securities and other derivative instruments with returns linked to or through whom such securities are sold for public offering and salerelated to changes in the price of the securities. In order to facilitate these derivative transactions, we may make a market in such securities, but suchenter into security lending or repurchase agreements with the underwriters or agents. The underwriters or agents will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as toeffect the liquidity of the trading market for any such securities. The amount of expenses expected to be incurred by us in connection with any issuance of securities will be set forth in the applicable prospectus supplement. Certain of the underwriters, dealers or agents and their associates may engage inderivative transactions with, and perform services for, us and certain of our affiliates in the ordinary course of business.
During such time as we may be engaged in a distributionthrough sales of the securities coveredto the public, including short sales, or by this prospectus we are required to comply with Regulation M promulgated underlending the Exchange Act. With certain exceptions, Regulation M precludes us, any affiliated purchasers, and any broker-dealer or other person who participates in such distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase, any security which is the subject of the distribution until the entire distribution is complete. Regulation M also restricts bids or purchases madesecurities in order to stabilizefacilitate short sale transactions by others. The underwriters or agents may also use the pricesecurities purchased or borrowed from us or others (or, in the case of a securityderivatives, securities received from us in connection with the distributionsettlement of that security. Allthose derivatives) to directly or indirectly settle sales of the foregoing may affectsecurities or close out any related open borrowings of the marketability of our shares of common stock.securities.
To the extent required, this prospectus
General information
Agents, underwriters, and dealers may be amended or supplemented from timeentitled, under agreements entered into with us, to time to describe a specific plan of distribution.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our certificate of incorporation provides that a director will not be personally liable toindemnification by us or to our stockholders for monetary damages for breach of the fiduciary duty of care as a director,against certain liabilities, including breaches which constitute gross negligence. This provision does not eliminate or limit the liability of a director:
Our certificate of incorporation also provides that we indemnify and hold harmless each of our directors and officers to the fullest extent authorized by the DGCL, against all expense, liability and loss (including attorney’s fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of Milestone, pursuant to the forgoing provisions or otherwise, Milestone has been informed that in the opinion of the SEC such indemnification by it is against public policy as expressed in the Securities Act and is, therefore, unenforceable.Act.
INTERESTS OF NAMED EXPERTS AND COUNSEL
LEGAL MATTERS
The validity of the securities being offered by this prospectus will behereby has been passed upon for us by Morse, Zelnick, RoseGolenbock Eiseman Assor Bell & Lander,Peskoe LLP, 825 Third Avenue, New York, NY 10022. A partner in Morse, Zelnick, Rose & Lander, LLP owns 22,333 sharesNew York.
EXPERTS
The consolidated financial statements of Milestone common stock.
Baker Tilly Virchow Krause,Scientific, Inc. and subsidiaries as of December 31, 2018 and 2017 and for each of the years in the two-year period ended December 31, 2018, incorporated in this Registration Statement by reference have been audited by Friedman LLP, an independent registered public accounting firm, has audited our consolidated financial statements for 2013 and 2014 included in our 2014 Annual Report,accountants, as set forthstated in their report which is incorporated by reference in this Prospectusthereon (which report includes an emphasis of matter paragraph as to the substantial doubt regarding our Company's ability to continue as a going concern), and elsewhere in the registration statement. Our consolidated financial statements for 2013 and 2014 are incorporated by reference, in reliance on Baker Tilly Virchow Krause, LLP’supon such report given on theirthe authority of said firm as experts in accounting and auditing.
PARTPart II
INFORMATION NOT REQUIRED IN PROSPECTUS
Information Not Required in the Prospectus
Item 14. Other Expenses of Issuance and Distribution
The following is an itemized statement of expenses of the Company in connection with the issuance and delivery of the securities being registered hereby, other than underwriting discounts and commissions.commissions:
SEC Registration Fee | $ | 3,021 | ||||||
Printing Expenses | * | |||||||
Listing Fees | * | |||||||
Trustee Fees and Expenses | * | |||||||
Securities and Exchange Commission registration fee |
| $ | 1,343.56 |
| ||||
Accounting fees and expenses | * |
|
| * |
| |||
Legal fees and expenses | * |
|
| * |
| |||
Printing expenses |
|
| * |
| ||||
Transfer Agent Fees and Expenses |
|
| * |
| ||||
Miscellaneous | * |
|
| * |
| |||
| ||||||||
Total | $ | 3,021 |
| $ | 1,343.56 |
| ||
* These fees will be dependent on the types of securities offered and number of offerings and, therefore, cannot be estimated at this time.
Item 15. Indemnification of Directors and Officers
Our certificate of incorporation provides that a director will not be personally liable to us or to our stockholders for monetary damages for breach of the fiduciary duty of care as a director, including breaches which constitute gross negligence. This provision does not eliminate or limit the liability of a director:
| • | for breach of his or her duty of loyalty to us or to our stockholders; | |
• | for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; | |
• | under Section 174 of the DGCL (relating to unlawful payments or dividends or unlawful stock repurchases or redemptions); | |
| • | for any improper benefit; or | |
| • | for breaches of a director's responsibilities under the federal securities laws. |
Our certificate of incorporation also provides that we indemnify and hold harmless each of our directors and officers to the fullest extent authorized by the DGCL, against all expense, liability and loss (including attorney’sattorney's fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith.
The exhibits required to be filed as a part of this Registration Statement are listed in the Exhibit Index attached hereto and incorporated herein by reference.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
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(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided,however, That: paragraphs (a)(l)(i), (a)(l)(ii) and (a)(l)(iii) of this section do not apply if the registration statement is on Form S-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by such registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) If the registrant is relying on Rule 430B:
(A) Each prospectus filed by such registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof;provided,however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule
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430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: the undersigned registrant hereby undertakes that in a primary offering of securities of such undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, such undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of such undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of such undersigned registrant or used or referred to by such undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about an undersigned registrant or its securities provided by or on behalf of such undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by such registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the undersigned registrantMilestone Scientific, pursuant to the foregoingforgoing provisions or otherwise, the undersigned registrant haswe have been advisedinformed that in the opinion of the Securities and Exchange CommissionSEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by such registrant of expenses incurred or paid by a director, officer or controlling person of such registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of section 310 of the Trust Indenture Act (“Act”) in accordance with the rules and regulations prescribed by the Commission under section 305(b)(2) of the Act.
Item 16. Exhibits
II-3The following exhibits are filed herewith or incorporated by reference herein:
Exhibit Number | Exhibit Title | |
1.1 | Form of Underwriting Agreement* | |
4.1 | ||
4.2 | Form of Certificate of Designation* | |
4.3 | Form of Preferred Stock Certificate* | |
4.4 | Form of Warrant Agreement* | |
4.5 | Form of Warrant Certificate* | |
4.6 | Form of Unit Agreement* | |
4.7 | Form of Unit* | |
5.1 | ||
23.1 | ||
23.2 | Consent of Golenbock Eiseman Assor Bell & Peskoe LLP (included in Exhibit 5.1) ** | |
24.1 | ||
25.1 | Form T-1 Statement of Eligibility of Trustee for Senior Indenture under the Trust Indenture Act of 1939* |
* | To be filed by amendment or as an exhibit to a report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and incorporated herein by reference. |
** | Filed herewith. |
Item 17. Undertakings
(a) | (1) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(2) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | |
(3) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
(i) | If the registrant is relying on Rule 430B, |
(A) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and | |
(B) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to the effective date; or |
(ii) | If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(4) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer and sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; | |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; | |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and | |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(c) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding), is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. |
(d) | The undersigned registrant hereby undertakes that: |
(1) | For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. | |
(2) | For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(e) | The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Trust Indenture Act. |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrantRegistrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statementRegistration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the in the cityCity of Livingston, State of New Jersey, on February 10, 2016.May 2, 2019.
MILESTONE SCIENTIFIC INC. | ||
By: | /s/ Leonard | |
Leonard | ||
Interim Chief Executive Officer | ||
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers
KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and directors of Milestone Scientific Inc., hereby appointappoints Leonard Osser and Joseph D’Agostino, and Stephen Zelnick, oureach of them, his or her true and lawful attorneyattorneys-in-fact and agents with full power toof substitution, for him to sign for usor her and in our nameshis or her name, place and stead, in the capacities indicated below, the registration statement on Form S-3 filed herewith and any and all subsequentcapacities, to sign any and all amendments (including post-effective amendments) to saidthis Registration Statement, and to sign any registration statement and generallyfor the same offering covered by the Registration Statement that is to do all such things in our names and on our behalf in our capacities as officers and directorsbe effective upon filing pursuant to enable Milestone Scientific Inc. to comply with the provisions ofRule 462(b) promulgated under the Securities Act, of 1933, as amended, and all requirements ofpost-effective amendments thereto, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming our signatures as theyall that said attorneys-in-fact and agents or any of them, or his or their substitute or substitutes, may lawfully do or cause to be signeddone or by our said attorney, to said registration statement and any and all amendments thereto.virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statementRegistration Statement has been signed by the following persons on behalf of the registrant and in the capacities indicatedand on February 10, 2016:the dates stated.
Signature | Title | Date | |||
/s/ Leonard
| Interim Chief Executive Officer and Director | May 2, 2019 | |||
| Leonard Osser |
(Principal Executive Officer) | ||||
/s/ Joseph D’Agostino
| Chief Financial Officer | May 2, 2019 | |||
| Joseph D’Agostino | (Principal Financial and Accounting Officer) | ||||
/s/ Leslie Bernhard
| Chairman of the Board | May 2, 2019 | |||
| Leslie Bernhard | |||||
/s/ Leonard Schiller
| Director | May 2, 2019 | |||
| Leonard Schiller | |||||
/s/ Gian Domenico Trombetta | Director | May 2, 2019 | |||
| Gian Domenico Trombetta | |||||
/s/ Edward J. Zelnick, M.D. | Director | May 2, 2019 | |||
| Edward J. Zelnick, M.D. | |||||
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EXHIBIT INDEX
|
| May 2, 2019 | |
| Michael McGeehan | |||
| | |||
/s/ Neal Goldman | Director | May 2, 2019 | |
5
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