The New Standard of Care for Drug Delivery Injection Technology Investor Presentation – January 2012 Safe Harbor This presentation contains forward-looking statements regarding the 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 risk factors detailed from time to time in Milestone's periodic filings with the Securities and Exchange Commission, including without limitation, Milestone's Annual Report for the year ended December 31, 2010. The forward-looking statements in this press release are based upon management's reasonable belief as of the date hereof. Milestone undertakes no obligation to revise or update publicly any forward-looking statements for any reason. 2 Investment Highlights Conventional needle syringes present challenges for patients and doctors Patented and FDA approved painless injection/drug delivery system Established track record and broad industry recognition New sales and marketing strategy targeting large dental groups High margin recurring revenue model from disposable handpieces Opportunity to expand into new drug delivery applications Highly scalable business utilizing outsourced production model 3 Hypodermic Needle Syringes • Pain and tissue damage are a direct result of uncontrolled flow rates and pressure during the administration of drug solutions into human tissue • Side effects include – – – – – Subjective pain response Tissue damage Transient or permanent paralysis Post-operative complications Risk of medical emergencies, including patient fatality 4 About Milestone Scientific • Proprietary computer-controlled injection technologies targeting the medical and dental markets • First major breakthrough in injection technology since invention of hypodermic syringes • Precision, painless injections for all dental treatments – Root canals, crowns, fillings, cleanings, etc. – Over 44 million injections administered to date • Award-winning products • Global distribution network – North and South America, Asia, Africa and Europe – IP portfolio consists of 24 issued patents 5 Core CompuFlo® Technology • Regulates and controls flow rate of fluid • Dynamic Pressure Sensing® capability provides visual and audible in-tissue pressure feedback – Ability to identify tissue types and inject drugs at the precise location – Minimizes tissue damage and eliminates the pain of the injection because the flow rate and pressure of the injection are controlled • Disposable injection handpiece that provides for precise tactile control during the injection • Ability to record data from the injection event 6 Single-Tooth Anesthesia (STA) System • Introduced in February 2007 and incorporates CompuFlo® technology • Allows dentists to administer injections accurately and painlessly into the periodontal ligament space, effectively anesthetizing a single tooth • Anesthetizes the tooth within one or two minutes versus 8-18 minutes for a block injection – No pain or collateral anesthesia in the cheek, lips or tongue • Capable of performing all injections done with a conventional syringe 7 Proprietary Advantages • There are approximately 40 million dental phobics—people afraid to visit a dentist, in the United States Patient • Eliminates pain • Reduces needle anxiety • No collateral numbing Doctor • Site specific targeting • Precision fluid metering • Eliminates needle deflection • Safe, disposable handpiece 8 • Rapid onset anesthesia/ reduced waiting time • Better ergonomics • New injection techniques • No missed blocks Intellectual Property Computer Controlled Drug Delivery Systems Dental Anesthetic and Delivery Injection Unit Design for a Dental Anesthetic Delivery System Holder Design for a Dental Anesthetic Delivery System Housing Design for a Dental Anesthetic Delivery System Handle Cartridge Holder for Injection Device Dental Anesthetic Delivery Injection Unit Microprocessor-controlled Fluid Dispensing Apparatus Pressure/Force Computer Controlled Drug Delivery System Dental Anesthetic and Delivery Injection Unit with Automated Rate Control Pressure/Force Computer Controlled Drug Delivery System with Exit Pressure Pressure/Force Computer Controlled Drug Delivery System with Automated Charging Drug Delivery System with Profiles Cartridge Holder for Anesthetic and Delivery Injection Device Design for Drive Unit for Anesthetic Design for Drive Unit for Anesthetic Drug Infusion Device with Tissue Identification Using Pressure Sensing Computer Controlled Drug Delivery Systems with Pressure Sensing Hand Piece for Fluid Administration Self-Administration Injection System Engineered Sharps Injury Protection Devices Handpiece for Injection Device with a Retractable and Rotating Needle Safety IV Catheter Device Safety IV Catheter Infusion Device Handpiece for Injection Device with a Retractable and Rotating Needle 9 PATENT DATE 6,022,337 D422,361 D423,665 D427,314 6,132,414 6,152,734 6,159,161 6,200,289 6,652,482 6,786,885 6,887,216 6,945,954 D558,340 D566,265 D579,540 7,449,008 7,618,409 7,625,354 7,740,612 2/8/2000 4/4/2000 4/25/2000 6/27/2000 10/17/2000 11/28/2000 12/12/2000 3/13/2001 11/25/2003 9/14/2004 5/3/2005 9/20/2005 12/25/2007 4/8/2008 10/28/2008 11/11/2008 11/17/2009 12/1/2009 6/22/2010 6,428,517 6,726,658 6,905,482 6,966,899 8/6/2002 4/27/2004 6/14/2005 11/22/2005 Industry Recognition • Favorably evaluated in more than 50 peer reviewed and independent clinical research reports “Many doctors have found that as a result of the unique characteristics of Computer-Controlled Local Anesthesia Delivery (C-CLAD™), most traditional dental injection techniques can be performed with greater predictability and with less discomfort.” - Dr. Stanley F. Malamed, Professor of Anesthesia and Medicine at the University of Southern California School of Dentistry 10 Established Distribution Channels • • • • • • • • • • • • • • Henry Schein Patterson Dental Supply Benco Dental Milestone Deutschland Dr. Riccardo Illic Spa FM Produkty Executive Dental Medenta Nabd Al Hayat Karr Dental Dental Practice Systems China National Medicines Corporation Istrodent Pty Ltd AB Unident AB USA USA USA Germany Italy Poland Puerto Rico/US Virgin Islands Russia Saudi Arabia Switzerland United Kingdom China South Africa Scandinavia Over 40 distributors worldwide 11 Non-Dental/Medical Applications • Over 700 applications outside the dental industry • Unique ability to identify the tissue in which the needle tip is imbedded – Epidural, intra-articular, organ, subcutaneous and intramuscular injections • Medical procedures requiring intravenous sedation can be performed with local anesthesia – Use of local anesthetic minimizes side effects, accelerating recovery times, lowering costs and eliminating potential complications • Clinical evidence demonstrating benefits in epidurals, intra-articular injections, colorectal surgery, podiatry, dermatology, nasal/sinus surgery, hair transplant and cosmetic surgery • New products subject to 510(k) submission, reducing development cost and time to market 12 Near-Term Application: Epidural • 2.5 million U.S. women who give birth each year receive epidurals – Represents approximate $1 billion annual U.S. market – Doctors using conventional syringes identify the epidural space by relying on subjective perception • Potential complications with conventional standard of care – – – – – – – – Wet Tap (1 in 30) Dural Puncture (1 in 100) Catheter Misplaced into Vein (1 in 300) Neurological Injury > one year (1 in 6,700) Neurological Injury < one year (1 in 240,000) Epidural Abscess or Hematoma (1 in 150,000) Paraplegia (1 in 250,000) Death (less than 1 in 100,000) • CompuFlo® consistently and accurately identifies the epidural space – Detects the difference in pressure between the ligamentum flavum and the extraligamentary tissue – In studies, epidural space has been correctly identified 100% of the time 13 Other Near-Term Applications • Osteoarthritis – Affects 33 million in U.S. alone; 21M in US receive intra-articular injections – IA market expected to reach $7B by 2015 – Conventional injections less efficacious, as doctor often fails to locate intraarticular space or use inappropriate volume of hyaluronic acid – CompuFlo® successful in independent study administering hyaluronic acid and other medicaments into the intra-articular space • Self Administered – Injectable drugs self-administered by patients with long term chronic conditions such as Multiple Sclerosis and Rheumatoid Arthritis – CompuFlo® provides painless subcutaneous injection method – A significant reduction in pain will have a positive impact on compliance • Other near-term applications include: neurosurgical injections/aspirations, opthalmic surgery, cosmetic surgery, etc. 14 New Product Introduction Strategy • Plan to JV with third party medical device manufacturers and distributors – Partners cover upfront commercialization costs – Receive exclusive product license • Over 70 unique injection instruments and 240 unique disposables identified and available • Recently established joint venture to develop intra-articular and epidural drug delivery instruments utilizing CompuFlo technology 15 Joint Venture • Formed joint venture with Beijing 3H (Heart-Help-Health) Scientific Technology in July 2011 • First two products under development are epidural and intraarticular injections • 50/50 arrangement between Beijing 3H and Milestone Scientific • Milestone to provide exclusive worldwide royalty-free license for use of its patents • Beijing 3H to contribute $1.5 million to the joint venture – Invested $500,000 in July 2011 – Second tranche of $500,000 to be made in first quarter 2012 16 New Sales & Market Strategy • Refocused sales strategy implemented in 2010 – Reduced reliance on third party distributors – Marketing directly to group practices • Expanded internal sales force & customer support – Hired director of international sales and director of domestic sales – Utilizing independent hygienists to train and support group dental practices • Signed on first group dental practice in January 2011—Towncare Dental – 27 offices throughout central and south Florida – The STA Instrument will replace the syringe in these practices 17 Target Dental Group Practice Model Today YE 2011 YE 2012 YE 2013 Total # Dentists(1) 150 500 1500-2500 2500-4500 Hand Piece Price $1.39 $1.51 $2.10 $3.00 Gross Margin 65% 65% 70+% 70+% $0.2M $0.6M $3-5M $7-13M Annualized Gross Profit(2) 1. Includes dentists in practices under contract, training to follow (2 months training per 100 dentists) 2. Assumes industry average 2,000 procedures per dentist per year 18 2010 Financial Results • Revenue increased 14% to $9.7M from $8.5M in 2009 • Gross profit increased 22% and gross margin increased over 400 basis points to 63.8% • Operating expenses declined from 84% of revenue to 71% 12 10 8 6 4 2 2008 2009 19 2010 Q3 2011 Financial Highlights • Revenue totaled $1.7M versus $1.9M last year – Instrument sales in the U.S. declined quarter-over-quarter due to marketing shift toward large dental practices that have a longer selling cycle; successful pilot tests recently completed by large dental groups – Domestic handpiece sales up 13.4% for the quarter to $762,726 indicating higher usage rates among dentists – International instrument sales, excluding China, increased to $325,131 versus $249,975 last year • Gross profit margin was 66% in 2011 as compared to 62% in 2010 • Net loss of $637,338 versus a loss of $583,526 last year – Increased investment related to business model change – Joint venture investment expense of $60,027 20 Balance Sheet Highlights 30-Sep-11 Cash and cash equivalents Total current assets Total assets $ Total current liabilities Total long-term liabilities Total liabilities Total stockholders equity 370,669 3,112,579 7,046,422 31-Dec-10 $ 3,588,343 1,322,701 4,911,044 $ 2,135,378 627,082 3,388,206 6,609,023 3,394,891 882,015 4,276,906 $ 2,332,117 Solid balance sheet and clean capital structure with no convertible debt or preferred shares outstanding 21 Management Team Leonard Osser, CEO & Director. Mr. Osser served as the Company’s Chairman from 1991 until September of 2009, and since 2007, was Chief Executive Officer of the Company. From 1980 until the consummation of Milestone’s public offering in November 1995, Mr. Osser was primarily engaged as the principal owner and Chief Executive Officer of U.S. Asian Consulting Group, Inc., a New Jersey-based provider of consulting services specializing in distressed or turnaround situations in both the public and private markets. Joseph D’Agostino, CPA, COO & CFO. Mr. D’Agostino became CFO in October 2008. Prior to joining Milestone, Mr. D’Agostino served as Senior VP and Treasurer of Summit Global Logistics, a publicly traded, full service international freight forwarder and customs broker with operations in the United States and China. Previous executive posts also included EVP and CFO of Haynes Security, Inc., EVP of Finance and Administration for Casio, Inc., the U.S. subsidiary of Casio Computer Co., Ltd.; and Manager of Accounting and Auditing for Main Hurdman’s National Office in New York City (merged into KPMG). Mark Hochman, D.D.S., Director of Clinical Affairs. Dr. Hochman has served as Director of Clinical Affairs and Director of R&D since 1999. He has a Doctorate of Dental Surgery with advanced training in the specialties of Periodontics and Orthodontics from New York University of Dentistry and has been practicing dentistry since 1984. He holds a faculty appointment as a clinical associate professor at NYU School of Dental Surgery. Recognized as a world authority on Advanced Drug Delivery Instruments, Dr. Hochman has published numerous articles in this area, and shares in the responsibility for inventing much of the technology Dr. Eugene Casagrande, Director of Int’l & Professional Relations. Dr. Casagrande joined the company in 1998 and is charged with pursuing a broad range of clinical and industry-related strategic business opportunities for the Company. He has also lectured both nationally and internationally at over 35 dental schools and in over 22 countries on Computer-Controlled Local Anesthesia Delivery. Dr. Casagrande is past president of the California State Board of Dentistry and the Los Angeles Dental Society and is a Fellow of the American and International Colleges of Dentists and has served on the faculty of the University of Southern California, School of Dentistry. 22 Management Team (cont’d) Dale Johnson, Director of International Distribution. Mr. Johnson joined Milestone in 2010. His 25-year tenure in the pharmaceutical industry includes key marketing positions in the international arena, including Director of Marketing and then Vice President, International Business at Zila Pharmaceuticals, Inc., a leader in the prevention and treatment of oral diseases. Prior executive posts included Executive Vice President at MedLearning, a communications company serving the pharmaceutical and biotech industries and Group Vice President of Business Development at DOBI Medical Systems, a technology company engaged in the diagnosis of breast cancer. He also held key marketing positions at Apex Communications, Inc., a medical communications company and at Glaxo, Inc., where he spent eleven years and rose through the ranks to International Marketing Director for Dermatology Products. Marvin Terrell, Director of Domestic Distribution. Mr. Terrell joined Milestone in 2010 to oversee the company’s distribution network in the U.S. and Canada. Previously, he served as North American Director of Sales for OralCDx Laboratories where he conceptualized and implemented sales and marketing strategies for BrushTest®, a quick and painless method dentists use to detect oral cancer. Previously, he was Vice President of Sales and New Business Development for Professional Dental Technologies where he managed day-to-day sales and business development activities for the dental division representing over $40 million in annual sales. He also held the position of Manager, National Accounts, Medical Division at HPSC, Inc. Renee Cultrara, Director of Education. Ms. Cultrara joined Milestone Scientific in 2008. She has been a practicing clinical hygienist for 23 years. Her responsibilities at Milestone include training and educating field reps, group accounts and our inside sales team. She is a Registered Dental Hygienist. 23 Board of Directors Leslie Bernhard, Chairman of the Board. Leslie Bernhard assumed the position of Chairman in October 2009 and previously served as an Independent Director since May 2003. She co-founded AdStar, Inc. and since 1986 has served as its President, Chief Executive Officer and Executive Director. AdStar is an application service provider for the newspaper classified advertising industry. She also serves on the Board of Directors of Universal Power Group (AMEX:UPG) of Dallas, Texas. Leonard M. Schiller, Director. Mr. Schiller has been a director of Milestone since April 1997. Mr. Schiller has been a partner in the Chicago law firm of Schiller, Klein & McElroy, P.C. since 1977. He has also been President of The Dearborn Group, a residential property management and real estate acquisition company since 1980. Mr. Schiller became a Director of the Gravitas Cayman Corporation in February 2010. Gravitas Cayman Corporation is an Investment Fund. Pablo Felipe Serna Cardenas, Director. Mr. Serna Cardenas has been a director of Milestone since June 2006. He is the founder of SPOT Investments, a European-based financial services firm. Previously, from 2001 to 2005, he was a director and Senior Manager at Dynamic Decisions Group Ltd, an equity research and valuation consulting firm. In that capacity, Mr. Serna Cardenas led the corporate finance team at Dynamic Decisions in investment banking and project valuation consulting. Prior to joining Dynamic Decisions, from 1999-2001, Mr. Serna Cardenas served as an associate with Real Options Group. Real Options Group is an international academic research center consulting to business entities. Before joining Real Options Group, Mr. Serna Cardenas was the general manager with Estudios, Consultorias y Asesorias Financieras, a Financial Consulting firm in Columbia. He has been a director of Pairstech Fund, a UK hedge Fund since 2008. 24 Key Statistics Ticker: Exchange: Share price (as of 1/26/2012): Common shares outstanding: Market capitalization: 2010 revenue 2010 net income 2010 EPS Total shareholder’s equity (9/30/2011): Fiscal year-end: Insider ownership: MLSS OTCQB $0.51 15.1 M $7.8 M $9.7 M ($0.6 M) ($0.04) $2.1 M December 31 16.2% * At September 30, 2011, Milestone had outstanding options and warrants to purchase $1.3M shares of common stock at prices ranging from $0.40 to $2.50 per share with a weighted average exercise price of $1.40. 25 Investment Highlights Conventional needle syringes present challenges for patients and doctors Patented and FDA approved painless injection/drug delivery system Established track record and broad industry recognition New sales and marketing strategy targeting large dental groups High margin recurring revenue model from disposable handpieces Opportunity to expand into new drug delivery applications Highly scalable business utilizing outsourced production model 26 The New Standard of Care for Drug Delivery Injection Technology Thank you.