Good day and welcome to the Milestone Scientific Incorporated Third Quarter 2019 Investor Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. David Waldman, Investor Relations. Please go ahead, sir.

Good morning and thank you for joining Milestone Scientific’s third quarter 2019 financial results conference call. On the call with us today are Len Osser, Interim Chief Executive Officer; and Joseph D'Agostino, Chief Financial Officer. The Company issued a press release yesterday, Thursday, November 15th, (sic) [November 14th] containing third quarter 2019 financial results, which is also posted on the Company's website. If you have any questions after the call or would like any additional information about the Company, please contact Crescendo Communications at 212-671-1020. The Company's management will now provide prepared remarks, reviewing the financial and operational results for the third quarter ended September 30, 2019. Before we get started, we would like to remind everyone that during this conference call, we may make forward-looking statements regarding timing and financial impact of Milestone's ability to implement its business plan, expected revenues and future success. These statements involve a number of risks and uncertainties, and are based on assumptions involving judgments with respect to future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond Milestone's control. Some of the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements are general economic conditions, failure to achieve expected revenue growth, changes in our operating expenses, adverse patent rulings, FDA or legal developments, competitive pressures, changes in customer and market requirements and standards and the risk factors detailed from time-to-time in Milestone's periodic filings with the Securities and Exchange Commission, including without limitation Milestone's report on Form 10-K for the year ended December 31, 2018, and Milestone's report on Form 10-Q for the third quarter ended September 30, 2019. The forward-looking statements made during this call are based upon management's reasonable beliefs as of today's date, November 15, 2019. Milestone undertakes no obligation to revise or update publicly any forward-looking statements for any reason. With that, we’ll now turn the call over to Len Osser, Interim CEO. Please go ahead, Len.

Good morning. Thank you, David, and thanks to everyone taking the time to join us this morning. I’m pleased to report that we achieved revenue growth of 17% for the third quarter, due to increased sales of both the dental instruments and disposables. As we stated in the past, our Wand Dental subsidiary remains cash flow positive on a standalone basis. However, our primary focus has been and continues to be the commercialization of the CompuFlo Epidural System. On that note, we have made considerable progress advancing our commercial efforts in this area. Last month, we reported important results of an international, multicenter study that compared accidental dural puncture rate and complications while using the CompuFlo Epidural System versus the traditional loss of resistance technique in patients undergoing epidural procedures prior to labor. It is important to note that none of the 812 patients who received epidural anesthesia with CompuFlo at an accidental dural puncture. This compares to 5% of patients that experienced accidental dural puncture using the loss of resistance technique, in the earlier non-inferiority trial the results -- in the earlier non-inferior trial. Keep in mind that, the technique that is our primary competitor in the market uses technology born in the 1860s. The results of this study are significant. Epidurals create one of the highest levels of morbidity of any drug delivery, and we achieved a 100% success in this study. The results of the study were presented at the ANESTHESIOLOGY 2019 Annual Meeting, which has generated significant interest within the industry. There are numerous implications; First and foremost is patient safety; second is reducing the potential liability for physicians and hospitals; third ,this procedure is also a major expense for the insurance companies that provide malpractice of coverage; fourth, in the event of missed epidural placement,…

Thank you, Leonard. Today, revenue for the three months ended September 30, 2019 was $1.9 million versus $1.6 million for the third quarter of 2018. The increase of $278,000 is due to a large part the restocking order of handpieces and devices from Henry Schein, our exclusive distributor in the U.S. and Canada, which was received in the third quarter of 2019 in the amount of $802,000. Medical revenue for the three months ended September 30, 2019 was $15,500 as we are moving forward with our ongoing strategy to place the CompuFlo Epidural system with KOLs. They are also attending medical device trade shows and introductory meetings with medical device distributors within the United States and European markets, which begun to set the stage for our broader commercial rollout. Gross profit for the third quarter ended September 30, 2019 was approximately $1.4 million, or 72% of revenue, versus a loss of approximately $120,000 for the third quarter ended September 30, 2018. Gross profit for the three months ended September 30, 2018 included an allowance for handpieces and devices sold to Milestone China of approximately $790,000 and an inventory reserve of $273,000 for certain dental handpieces. We recorded a credit to cost of goods sold of $150,000 in the third quarter of 2019 towards a claim for dental handpieces. Operating loss for the three months ended September 30, 2019 was $1 million versus approximately $4.5 million for the quarter ending September 30, 2018. The third quarter of 2018 includes a $1.5 million impairment of long-lived assets related to non-core patents. Net loss for the three months ended September 30, 2019 was approximately $2.8 million, or $0.06 per share, versus a net loss of $4.4 million, or $0.12 per share, in the prior period. Net loss for the three months ended September…

Thank you, Joseph. Before we wrap up and go to Q&A, I'd like to take this opportunity to welcome Brent Johnson as President of Milestone Scientific. He joins us at an exciting time in our developments as we accelerate our commercial efforts around the CompuFlo Epidural system. Specifically, he brings over 25 years of experience in sales, marketing and all this organizational efficiency. He has brought a number of spines, orthopedic and other medical products to market. Prior to joining Milestone Scientific, he served as Vice President of Sales at Clariance, a spinal device company, where he restructured the sales and marketing strategy for the U.S. market, resulting in significant year-over-year growth. Previous to that, he served as CEO of ExsoMed, an upper extremity orthopedic company where he brought the company from start up to full commercialization. He also founded and served as Chief Operating Officer at Aurora Spine, where he grew the company from startup to full commercialization and oversaw the launch of 20 products. Given his impressive track record launching new commercial products, as well as driving both, top and bottom-line growth for existing products, we believe he will be an excellent addition to the team. In the short time since he joined the organization, he has already proven himself more than capable. So, to wrap up, we are encouraged by the outlook for the business that one is on a stable course, and we are carefully managing our expenses, as evidenced by our reduced SG&A. At the same time, our medical division is poised for significant growth. We have in front of us a substantial untapped market opportunity. And our technology is protected by a broad patent portfolio that continues to grow and will continue to grow. We look forward to providing further updates on our commercial rollout strategy in the weeks and months ahead. I'd like to thank you for joining the call today. At this point, we would like to open the call up for questions.

[Operator Instructions] We will now take our first question from Anthony Vendetti of Maxim. Please go ahead.

Thanks. Yes. Leonard, I was wondering if you or Brent can just talk about the commercial rollout strategy, just what the plan is. Because obviously, there's been a number of studies coming out showing the efficacy and safety of your device significantly better than the current standard of care. So, I was just curious, whether it's going to be a distribution strategy, direct sale, combination of both, and just sort of the plan over the next three to six months.

Okay. We're at a point now where the industry tells us that we have very significant studies, far more significant than the product at this point of commercialization would have. So, we will not fund any other studies. As a matter of fact, since our original study, none of the studies have been funded by us other than lending instruments and supplying disposables. Having said that, there are studies being done for free by KOLs in various parts of the world including the United States, both in labor and delivery and other areas of epidurals. These studies are being done primarily by KOLs and for free because we are really the only product to come along since 1921 that could make a major difference with drug delivery in epidurals. So, as far as -- we do not anticipate funding any studies going forward in this area or other areas of drug delivery involving the epidurals. As far as the rollout goes, we are very close to closing our first hospitals in the United States, by very close, so it’s in other people's hands, not ours. We’re not speaking of months, we're speaking of weeks. More importantly than that is, we have become aware as have at least one major TPL, one major company that owns a significant amount in the thousands of hospitals in the United States, the cost associated with the morbidity associated with drug delivery to the epidural, the number is shockingly high to them. And we have the evidence that we could significantly change that. Brent is now working on that with this organization as well as beginning to work with others. In addition, we have had contact with a number of insurance companies that share these costs with the hospitals. So, we now have statistical analysis and these statistics of the cost of the morbidity in the United States about a very large hospital system. We believe that this will telescope the growth throughout that system first and then to others in the United States. So, that's how we plan to commercialize, going to the insurance companies, which bear the brunt of the tens of millions of dollars and more that they are putting out because of these inadvertent needle sticks, and the actual hospital systems who are suffering with this as well. Does that answer your question, Anthony?

Yes. Okay. So, it’s two-pronged approach, the hospital systems and the insurance companies, and trying to get them to be a proponent of the CompuFlo system. Have you had discussions with the insurance companies around reimbursement or how is that going to manifest itself?

Yes. We have had those discussions. We would fit under the present codes of an epidural obviously. We will work with one of the hospital systems to get our own code as well that will take approximately a year, but meanwhile, we’ll fit under the code of the present epidurals. However, what they are looking at is the enormity of the savings which are our instrument can provide to them. It's far more substantial than we had thought it was in the past. And as I say, the number was quite shocking to them. They've done an analysis already at a small percentage of their hospitals. I believe it was approximately 300. And that number was very significant. I don't want to get out that number now, but it's certainly a very compelling number to get their attention. They had never looked at it before because it was never a solution to that problem. Now that there is a solution to it, which has been proven by our clinical studies, we are now in discussions with them and will be in discussions with others as well, along with the insurance companies.

Okay, very helpful. Thanks, Len.

You’re welcome, Anthony. Thank you.

Thank you. [Operator Instructions] We’ll now take our next question from John Corve [ph]. Please go ahead.

Hi, Leonard. How are you?

I'm very well. Thank you. How are you?

I'm well. Thank you. And I'm encouraged by what you just said and answering Anthony's question. I had the exact same question and you answered it very well. And I continue to be encouraged and so does the marketplace by registering the way Milestone is trading rightly. So, I presume we are on the cusp of this long awaited rollout of the epidural. And I commend you for all your efforts and your tenacity. And I continue to be with you as a shareholder.

Thank you very much, John. That’s very encouraging, very good to hear. It's been a long road.

That’s a long road. But, thanks again.

Pleasure.

Thank you. There are no further questions at this time. I would like to turn the conference back over to Mr. Leonard Osser for any additional or closing remarks. Thank you.

Once again, I thank you very much for joining us. I'm hoping that in the next few weeks, we will have releases showing our progress in a number of varied areas of the business. We will continue to keep everyone informed. Everyone of course is free to get updates from David Waldman’s organization, Crescendo. Once again, thank you very much. And we'll be in touch with you soon. Good day.

Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.