Note 11 - Commitments

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE 11 — COMMITMENTS

(1)  Contract Manufacturing Agreement 

Milestone Scientific has informal arrangements with third-party manufacturers of the STA devices, and epidural instruments pursuant to which they manufacture these products under specific purchase orders but without any long-term contract or minimum purchase commitment. The Company has a purchase commitment for the delivery of 2,000 STA instruments as of March 31, 2024. As of March 31, 2024, the purchase order commitment was approximately $2.1 million, and approximately $1.1 million was paid and reported in advance on contracts in the condensed consolidated balance sheet. As of March 31, 2024 the Company recorded approximately $98,000 for the development of the next generation instrument in advances on contracts in the consolidated balance sheet. As of  December 31, 2023, the purchase order commitment was approximately $2.3 million, and approximately $1.3 million was paid and reported in advance on contracts in the consolidated balance sheet. 

The advances on contracts represent funding of future epidural instruments, and epidural replacements parts. As of March 31, 2024 and December 31, 2023 the company also has advances on an open purchase order for long lead items for a future purchase order for the manufacturing of Epidural instrument of approximately $165,000 and $41,000 respectively.

(2)  Leases
 
Operating Leases

The Company identified and assessed the following significant assumptions in recognizing its right-of-use assets and corresponding lease liabilities:

● As the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in calculating the present value of the lease payments. The Company has utilized its incremental borrowing rate based on the long-term borrowing costs of comparable companies in the Medical Device industry.

● Since the Company elected to account for each lease component and its associated non-lease components as a single combined lease component, all contract consideration was allocated to the combined lease component.

● The expected lease terms include non-cancellable lease periods. Renewal option periods are not included in the determination of the lease terms as they were not reasonably certain to be exercised.

The components of lease expense were as follows:

	March 31, 2024			March 31, 2023
Cash paid for operating lease liabilities	$	31,882		$	32,694
Cash paid for finance lease liabilities		2,685			2,685
Right-of-use assets obtained in exchange for new operating lease liabilities
Property and equipment obtained in exchange for new finance lease liabilities
Weighted Average Remaining Lease Term
Finance leases (years)	0.79 years			1.8 years
Operating leases (years)	3 years			4 years
Weighted-average discount rate – operating leases		9.20	%		9.20	%
Weighted-average discount rate – finance leases		9.20	%		9.20	%