v3.26.1
COMMITMENTS
 3 Months Ended
Mar. 31, 2026
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS

NOTE 12 — 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 1,900 STA instruments as of March 31, 2026. As of March 31, 2026 and December 31, 2025, the purchase order commitment was approximately $2.3 million, respectively, and approximately $1.4 million was paid and reported in advance on contracts in the unaudited condensed consolidated balance sheet.

 

The advances in contracts represent funding for future epidural instruments and epidural replacement parts. As of March 31, 2026 and December 31, 2025, the company also has advances on an open purchase order for long lead items for a future purchase order for the manufacturing of Epidural instruments of approximately $34,000, respectively.

 

(2) 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, 2026   March 31, 2025 
   Three months ended 
   March 31, 2026   March 31, 2025 
Cash paid for operating lease liabilities  $31,882   $31,882 
Cash paid for finance lease liabilities   3,417    3,417 
Weighted Average Remaining Lease Term          
Finance leases (years)    3.67 years     4.75 years 
Operating leases (years)    1.00 years     2.00 years 
Weighted-average discount rate – operating leases   9.20%   9.20%
Weighted-average discount rate – finance leases   9.20%   9.20%