Good day, ladies and gentlemen, and welcome to the Milestone Scientific First Quarter 2022 Business Update Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, David Waldman, Investor Relations. Sir, the floor is yours.
Good morning, and thank you for joining Milestone Scientific's first quarter 2022 financial results conference call. On the call with us today are Arjan Haverhals, Chief Executive Officer, and Keisha Harcum, Controller of Milestone Scientific. The company issued a press release this morning containing first quarter 2022 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. Company's management will now provide prepared remarks reviewing the financial and operational results for the first quarter ending March 31, 2022.
Before we get started, we'd like to remind everyone that during this conference call, we may make forward-looking statements regarding timing and financial impact of Milestone's ability to implement its business plan, expected revenues, and future success. These statements involve a number of risks and uncertainties and are based on assumptions involving judgments with respect to future economic, competitive, and market conditions 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 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, 2021, and Milestone's report on Form 10-Q for the first quarter ending March 31, 2022. The forward-looking statements made during this call are based upon management's reasonable beliefs as of today's date, May 17, 2022. 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 Arjan Haverhals, Chief Executive Officer. Please go ahead.
Thank you, David, and thanks to everyone for joining us today. I'm pleased to report we have achieved revenue of more than $2.7 million, making it another solid quarter. Although sales were down slightly from the same period last year, this was primarily due to the pent-up demand and significant orders we received from distributors last year as dental offices were starting to reopen in the first quarter of last year. That said, we are very pleased with our results and believe we're gaining traction in the market. As a result of a decentralized multi-channel sales strategy, we are adding new domestic and global distribution partners, as well as large dental service organizations or DSOs, which we believe will help accelerate our growth. First, we recently added Keystone Dental Group as a strategic channel partner for the STA, Single Tooth Anesthesia System.
Keystone Dental Group brings a direct sales force of more than 60 sales representatives, serving surgical specialists and general dental practices across the U.S., with a particular focus on implant and regenerative procedures. Implant dentistry is a natural fit for the AIDA since it allows for localized anesthesia across a wide range of dental procedures. Through the use of our AIDA, implant dentistry can be performed without the discomfort or potential risks and complications that could occur when numbing an entire quadrant of the patient's mouth. Keystone Dental Group has a proven track record of introducing new products, including specialized instruments that require hands-on training and support. Second, as part of a broader initiative to target the DSO market, we established a partnership with the American Independent Dental Alliance, which is America's premier DSO network of private practice dentists.
AIDA is an ideal partner for us, and they support over 1,000 dental practices within their network. DSOs play an increasingly important role within the domestic dental market. The current DSO market penetration of approximately 30%-32% is expected to grow to 75%-80% over the next 10 years. Thirdly, we enhanced our education activities. As an example, we entered an agreement with Aesthetic Professionals, which provides continuing education classes that feature hands-on dental training. The STA will be core to their curriculum. In parallel, we look forward to further expanding our international sales as we are adding new global distribution partners. Specifically, we are targeting independent distributors with existing relationship within their respective territories and dental networks. Our dental business continues to generate positive cash flow on a standalone basis.
As we continue to grow our revenues, we expect to benefit from economies of scale due to the recurring nature and high margins on our disposables. Turning to our medical segment, we continued to advance our commercial efforts around the CompuFlo epidural instrument and CathCheck system. As a result of our combined sales and marketing activities, we have successfully trialed our CompuFlo epidural system in key hospitals, healthcare systems, and pain management clinics. Last month, we were approved as a vendor to supply our CompuFlo epidural and CathCheck disposables in a major Northeast teaching hospital, which is part of one of the leading health systems in the United States. The addition of this hospital continues to expand our nationwide footprint in the labor and delivery market. This approval follows a thorough trial and evaluation with which further validates the safety and efficacy of our technology.
As a teaching hospital, our tools provide residents, fellows, and even seasoned physicians greater accuracy through real-time verification of epidural needle placement, as well as subsequent monitoring of catheter placement. Our sales strategy is initially focused on key regional markets such as Florida, Texas, and the New York metropolitan tri-state area. In addition to our growing regional presence, we're also targeting tier-one university teaching hospitals. Some of these hospitals are among the top 20 in the nation. We believe that as we begin to penetrate some of these larger, more recognized names, it will add greater credibility and reduce the sales cycle with smaller institutions. At the same time, we have expanded our focus beyond labor and delivery to target the pain management market, which not only includes hospitals, but also specialty centers, outpatient centers, and sports medicine centers.
With over 11 million reported epidural procedures each year, the pain market segment is at least twice the size of the labor and delivery market segment. We recently commenced sales of the CompuFlo epidural disposables with the Cypress Surgery Center and the Galileo Surgery Center of California. Both of these prominent pain management practices are owned by pain management specialists. In addition, we are receiving positive feedback among clinics and physicians based on our ability to achieve better outcomes at lower cost. Two major thought leaders, Dr. Harsh Govil and Dr. Miguel de la Garza, have begun incorporating the CompuFlo epidural instrument into their practice for pain management to utilize the instrument for both surgical cases and office-based procedures to access the epidural space safely and quickly. The adoption of the CompuFlo epidural instrument by Dr.
Miguel de la Garza follows approval by Surgery Partners, one of the largest surgical services business in the country, for use across their network in pain management. To wrap up, as we discussed on our year-end conference call, the latest pandemic spike of the Omicron variant had a disproportionate impact on the labor and delivery departments within hospitals, as many pregnant women opted out of the vaccine. As a result, our sales team was unable to enter the operatories, which limited our ability to demo and trial the instrument. With the easing of the pandemic restrictions, we have resumed our sales activities. As a result, I truly believe 2022 will be an important year for our medical business. Our sales pipeline is solid and growing, and we are advancing discussions with a number of hospitals and healthcare institutions.
We will provide further updates as soon as we commence formal commercial sales with these respective institutions. Our CompuFlo epidural system offers objective detection of pressure changes to verify true loss of resistance and confirm the epidural space within minutes. The clinical and safety benefits of the CompuFlo epidural system are backed by extensive published clinical data demonstrating significant reductions in epidural punctures and complication rates, as well as economic benefits for the institutions. For these reasons, we are as confident as ever that our technology will become the new standard of care for epidural procedures in labor and delivery, as well as pain management, by providing patients with effective pain relief while reducing the risk of complications. At this point, I'd like to turn the call over to Keisha Harcum, Controller, to go over the financials in detail. Please go ahead, Keisha.
Thank you, Arjan. Total revenue for the three months ending March 31, 2022, was $2.7 million versus $2.9 million for the same period last year. Dental revenue decreased approximately $106,000 for the three months ending March 31, 2022, as compared to 2021. As Arjan mentioned, this was due in part to large sales in the first quarter of 2021, due in part to purchases from distributors as dental offices were starting to reopen. Medical revenue for the three months ending March 31, 2022, was approximately $7,550 versus $71,050 for the three months ending March 31, 2021.
Specifically, the spike in Omicron variant at the beginning of 2022 resulted in new restrictions on labor and delivery departments within the hospital, which limited our ability to demo and trial our epidural instrument in operatories. Gross profit for the three months ending March 31, 2022 was $1.7 million, or 62% of revenue, versus $1.8 million or 62% of revenue for the three months ending March 31, 2021. Operating loss for the three months ending March 31, 2022 was approximately $1.9 million, versus approximately $1 million for the three months ending March 31, 2021. The increase of operating expenses was due in part to higher sales and marketing expense, as well as higher R&D expense related to the development of a new instrument.
Net loss attributable to common shareholders was approximately $1.9 million or $0.03 per share for 3 months ending March 31, 2022 versus a net loss of $1 million or $0.01 per share for the comparable period in 2021. Now I would like to turn your attention to the liquidity and the capital resources at March 31, 2022. The company had cash and cash equivalents of approximately $13.3 million, total current assets of approximately $18.2 million, and working capital of $14.4 million. At this point, I'll turn the call back over to Arjan Haverhals.
Thank you, Keisha. As Keisha mentioned, we continue to maintain a solid balance sheet with approximately $13.3 million of cash and cash equivalents as of March 31, 2022, which provides us substantial resources and the ability to accelerate our sales and marketing activities around both our dental and medical instruments. Given our strong cash position, we are also investing in the development of a new instrument and pursuing new indications. Just one example of a new market for our technology is thoracic epidurals, where we are already approved for in Europe. Examples of complications, sometimes serious, that can occur with a thoracic epidural include epidural hemorrhage or abscess, subarachnoid block, spinal cord root injury leading to permanent motor deficits, TA-associated cardiovascular respiratory collapse, and local anesthetic toxicity.
We believe our technology platform can address many of these risk factors, but thoracic is just one of many potential indications we plan to pursue. To wrap up, we believe we have developed a cost-effective and highly scalable platform to drive growth within both our dental and medical divisions. We are witnessing growing interest in both our instruments and our disposables, and we believe we are well-positioned to take advantage of the opportunities available in the market. I'd like to thank you for joining the call today. At this point, we would like to open the call up to questions. Operator.
Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Your first question for today is coming from Anthony Vendetti. Please announce your affiliation, then pose your question.
Thanks, Maxim Group. Hi, Arjan. I you know, I wanna focus a little bit on the paying market opportunity, which as you mentioned is 2x the epidural or-
Yeah.
Labor and delivery market versus the paying market. I know that you know beginning of the year, obviously December, January was the spike in Omicron, and so that hindered or hampered the ability to get into new hospitals, new customers. We're halfway through this quarter. Have you had any issues or any concerns, any sales people having issues or you know, struggling to meet with customers in the first half of this second quarter?
Thank you for the question, Anthony, and good morning. I'm very happy and pleased to say, on the contrary, we have not seen any barriers of not trialing or demoing our products and our technology in the hospital. Remember when I said, I think it was at the earnings call for the entire full year last year, a month ago, you know, that the Q1 results were heavily affected by the Omicron variant because pregnant women, for good reasons and understandable reasons, decide not to take the vaccine, right? That also resulted that our people were not able to trial our products in the labor and delivery departments.
Now, as of end of March, beginning April, and as we speak, our sales team is very active in a number of hospitals in trialing, in doing patients, in doing evaluation of our technology. I do believe that situation has returned or turns to a positive development for us. I cannot look into a crystal ball, right? Because if I look in our environment, there's another strain or a variant coming up. I don't know what's going to happen in the next couple of months. I hope nothing is going to happen because we all would like to move forward. Does this answer your question, Anthony?
Yeah, I guess, you know, it sounds like you have a lot of opportunity. I'm just trying to figure out if the ramp in revenues, you know, should we start to expect that, this quarter and as we move through. On the medical side, as we move through the rest of this year. Then I just had a question on the dental side.
Yeah, no. The ramp up, I hope that we will have a ramp up in the second quarter, but I believe more that we have a ramp up in the third quarter. It depends, because we are also working in hospitals where we have had a longer existence, like UTMB, for example. You know, they are reordering our products. We are opening up discussions with them for another facility. It completely depends on the hospitals, what they are going to pursue with us, and whether they want to purchase the instruments as well.
Sure. In an early stage, you know, it depends on the order flow. Just in general, if you had to average, say, on average, how often do your existing customers reorder? Is it once every three months, once every six months?
No, that should be at a much shorter frequency, Anthony. Because we also have changed our sales model to it, that would say the people in our sales team. It's not the, you know, the hunter only, but we have also started working with what we call clinical specialists. Their task is to increase the volume at the hospital once we are in the hospital to secure and ensure that there is an increase in volume. If a hospital would be reordering once for every three months period, I will not be very happy.
Okay, good. All right, so it's ordering more quickly than that. That's great. It looks like dental has really started to return. Can you talk about 'cause the DSOs are large market opportunities. Can you talk about the ability to penetrate those? Is there any particular DSO that you believe could be materially impactful, either this year or next year in terms of revenues?
That's a very good question. So we started with piloting the DSO program with AIDA, and that was through four of our distributors that we are already doing business with. You know, the challenge with the DSO is that, their pricing structure, it's only tender pricing, right? I do believe that our offering to a DSO can help them grow their business, dramatically. What we have, we have a short list of DSOs that we are contacting and working with amongst, you know, it's not so difficult to make those lists, on those DSOs. You have the ClearChoice, you have the Aspen Dental, you have the Pacific Dental Services. We are looking at opportunities to discuss any potential cooperations with these organizations.
Now, from my own experience in the past, it will take time to have a real ramp up to your point, you know, that will be a later on, or that could be a year from now. It is an important market segment for us to be active in and to not only to start thinking about, but to get a foot in the door. Because, the DSOs, they are going to rule the dentistry in the next 10 years.
Okay, great. I'll hop back in the queue. Thank you.
Thank you, Anthony.
Once again, if there are any questions or comments, please press star one on your phone at this time. Your next question for today is coming from Ellen Leback. Please announce your affiliation, then pose your question.
Hello, this is Ellen Leback from Forest Capital. Thank you for taking my question. You mentioned thoracic epidural. Can you comment on the opportunity and plans?
Sure. Thank you for asking that question. Thoracic epidurals are about 30% of all epidurals performed during the year. It is important, like, for example, the anatomy of the epidural space and the higher you get up in the thoracic or in the cervical spine, the anatomy rules that the space is much smaller. Therefore, if you do the normal procedures with the loss of resistance technique today, the morbidity rates in lumbar is 5%, in thoracic, it's 17%. My point is just you have more contraindications, more side effects, higher risk of punctures. By providing the technology that we provide in the marketplace, you would be able to not having those morbidity rates at all.
The indication has been approved in Europe already a year ago. We have filed for the FDA procedure in the United States. It is an important indication for us as a company. Now always, you know, there will be questions by the FDA. I don't know, you know, how it will be. I'm genuine, a very positive person, and I'm gradually positive about being able to get the thoracic indication also within the United States. Because it's definitely going to be an important impact for the commercialization of our technology.
Great. Thank you so much for that clarification.
Thank you. You're welcome.
Once again, if there are any questions or comments, please press star one on your phone at this time. There appear to be no further questions in queue. I would like to turn the floor back over to the management team for closing remarks.
Yes. Thank you everybody for your time today. Again, the company is healthy, financially healthy. We have the right products, clinically proven, the right team, the right spirit, the right energy. I think it's still a very unique opportunity to invest in a company given the current prices in the marketplace. Again, thank you for the interest and stay safe. Bye-bye.
Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.