New Jersey-based Milestone Scientific (OTC:MLSS) took a major hit yesterday after announcing that its recently formed joint venture Milestone Ophthalmic Sp. z o.o. (MOSZ) would merge with Emmerson Wierzytelnosci Hipoteczne S.A. (EWH).
The merger, completed under a previously announced agreement with Astoria Capital S.A, will see MOSZ shares hit the Warsaw Stock Exchange’s New Connect market. The combined companies will go by "Advanced Ocular Sciences S.A.," according to a press release.
The news didn’t bode well for Milestone’s MLSS shares on the OTC market. The stock dropped 6.8% yesterday, closing at $2.06. The shares are still up more than 21% since the start of this year.
Under the terms of the merger, MOSZ took with it exclusive rights to intravitreal injection technology, used to delivery medication or other substances to the eye. In return, Milestone got 25% total equity in MOSZ as well as a 7% royalty on all instrument sales and $1 million in milestone-based licensing fees.
EWH shareholders are slated to meet this week to vote on new leadership and the changes in branding. The majority of shareholders are on board, according to the statement.
"We see enormous worldwide market potential for the Ophthalmic Instrument, especially given the aging population and the rate at which IVT injections are being utilized," EWH CEO Tadeusz Poplawski said in prepared remarks. "We believe this technology has the potential to help improve the treatment of eye diseases such as age-related macular degeneration, diabetic retinopathy, macular edema, and retinal vein occlusion, while improving safety of the injection for the patient and reducing malpractice risk for the medical practitioner."
"We look forward to listing Milestone Ophthalmic’s shares on the New Connect market and we are currently working with WDM to raise capital for Milestone Ophthalmic in Poland as well as apply for grant funding, which will help accelerate our plans for introducing this technology to the European market and worldwide," Milestone CEO Leonard Osser added. "We believe the structure of this agreement, which includes non-dilutive funding provided by Milestone Ophthalmic, along with license fees and royalties to Milestone Scientific, demonstrates once again our ability to bring medical instruments to market while minimizing dilution for shareholders."