PISCATAWAY, N.J., Jan. 4 /PRNewswire-FirstCall/ -- Milestone Scientific Inc. (OTC Bulletin Board: MLSS), the recognized leader in advanced injection technologies, today announced that it has entered into an agreement to extinguish $1.3 million of its outstanding debt in exchange for 822,000 shares of its common stock.
On June 28, 2007, Milestone secured a $1 million line of credit from a longstanding shareholder of the Company. The line of credit was amended in 2008 to $1.3 million. Borrowings bore interest at 6% per annum, with one year's interest at 1% payable in advance on each draw. The full amount of the line of credit and amendment, $1.3 million, had been drawn as of September 30, 2009. The outstanding debt due the investor was originally eligible for conversion into equity at a price of $0.26 per share. However, pursuant to a new agreement entered into with the investor on December 28, 2009, the debt has been converted into equity at a price per share of $1.58. As a consequence of the debt conversion, Milestone's balance sheet will no longer reflect the note as a current liability, thus increasing total stockholders' equity from $770,765 at September 30, 2009 to $2.07 million.
Leonard Osser, Chief Executive Officer of Milestone, noted, "We are very pleased to announce the conversion of $1.3 million in current debt to equity. This transaction significantly strengthens our balance sheet, eliminates further interest accrual and positions our Company to fully capitalize on our anticipated growth opportunities in the coming year. I'd like to again thank our trusted shareholder for standing by Milestone over many years and for his generous support and demonstrated commitment to our Company's long term success."
The certificates for the shares issued in connection with the debt conversion will bear a restrictive legend. Milestone Scientific is relying on the 'exempt security' provisions set forth in Section 3(a)(9) under the Securities Act of 1933, as amended, in issuing the shares in the debt conversion, as well as the transactional exemptions provided by Sections 4(2) and 4(6) of the Act and Regulation D. The shares of common stock issued in connection with the debt conversion represent approximately 5.8% of the Company's total outstanding shares immediately preceding the transaction.
About Milestone Scientific Inc.
Headquartered in Piscataway, New Jersey, Milestone Scientific is engaged in pioneering advanced computer-controlled injection technologies for the medical and dental markets; and currently sells its award-winning products through a global distribution network serving North America, Asia, Africa and Europe. For more information on the STA System and other innovative Milestone products, please visit the Company's web sites found at www.milestonescientific.com and www.STAis4U.com.
Safe Harbor Statement
This press release 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 the 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, 2008. 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.
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SOURCE Milestone Scientific Inc.