Milestone Scientific Inc. agreed to sell 1 million common shares, representing a 40% stake, in Milestone China Ltd. to Delaware-based Solee Science & Technology USA Ltd. Inc. for $1.4 million.
Under the stock purchase agreement, Solee will pay $125,000 at closing and issue a non-interest bearing $1.28 million promissory note payable in quarterly installments of $125,000, until the purchase price is paid in full.
Under a stock option agreement, Solee granted Milestone Scientific a 10-year option to repurchase the shares at a price of 71 cents apiece within the first two years or at fair market value thereafter.
Milestone Scientific said the stake sale would allow it to expand in the China market by supplying Milestone China with its Single Tooth Anesthesia System and related hand pieces, without playing any expanded role in the financial and business affairs of Milestone China.
The transaction will be booked as a secured financing.
In June 2014, Milestone Scientific invested $1 million in Milestone China through a contribution of 772 Single Tooth Anesthesia System instruments, for a 40% ownership stake.