NOTE 11 — RELATED PARTY TRANSACTIONS

United Systems

In June 2021, the Company entered into a ten-year supply agreement with United Systems, the principal supplier of its handpieces. United Systems is considered a related party because its controlling shareholder, Tom Cheng, is also a stockholder of the Company. Under the agreement, the Company procures products pursuant to individual purchase orders and has no minimum purchase commitments. Purchases from this supplier were approximately $222,000 and $471,000 for the three and six months ended June 30, 2026. Purchases from this supplier were approximately $285,000 and $772,000 for the three and six months ended June 30, 2025. As of June 30, 2026, and December 31, 2025, Milestone Scientific owed this supplier approximately $667,000 and $1,100,000, respectively, which is included in accounts payable and accrued expenses related party on the unaudited condensed consolidated balance sheets.

Director of Clinical Affairs

The Company pays royalty fees to its Director of Clinical Affairs pursuant to a Technology Sale Agreement, as amended, relating to Company products embodying technology covered by patents purchased by the Company from the Director of Clinical Affairs, including U.S. Patent No. 7,625,354, relating to the Company’s computer-controlled local anesthetic delivery system and associated handpiece, and U.S. Patent No. 7,618,409, relating to methods of administering an anesthetic using the system and handpiece.

Royalty fee attributable to the Director of Clinical Affairs was approximately $151,000 and $246,000 for the three and six months ended June 30, 2026, respectively, compared with approximately $119,000 and $232,000 for the three and six months ended June 30, 2025, respectively.

In addition, consulting expense attributable to the Director of Clinical Affairs was approximately $25,000 and $50,000 for the three and six months ended June 30, 2026, respectively, compared with approximately $39,000 and $78,000 for the three and six months ended June 30, 2025, respectively.

Under such Technology Sale Agreement, as amended, the Director of Clinical Affairs is also entitled to receive stock options upon the issuance of patents for inventions made by the Director of Clinical Affairs and purchased by the Company. Any options granted upon the achievement of such patent-related milestones are measured and recognized as stock-based compensation expense in accordance with the applicable accounting guidance and the terms of the related award agreement.

As of June 30, 2026 and December 31, 2025, had recorded accrued but unpaid royalties owed to the Director of Clinical Affairs of approximately $392,000 and $289,000, respectively. These amounts are included in accounts payable—related party and accrued expenses—related party in the Company’s consolidated balance sheets.

Directors

Leonard Osser

On April 6, 2021, Leonard Osser entered into a succession agreement with the Company and U.S. Asian Consulting Group, LLC (“U.S. Asian”), a company of which Mr. Osser is a principal and, together with his wife, the sole members (the “Succession Agreement”). The Succession Agreement restructured certain compensation arrangements under Mr. Osser’s July 2017 employment agreement with the Company (the “Osser Employment Agreement”) and U.S. Asian’s July 2017 consulting agreement with the Company (the “Osser Consulting Agreement”).

Under the Succession Agreement, annual compensation under the Osser Employment Agreement was reduced by $100,000 to $200,000, divided equally between cash and equity compensation. Annual compensation under the Osser Consulting Agreement was increased by $100,000 to $200,000, also divided equally between cash and equity compensation. The equity compensation component was transferred from the Osser Employment Agreement to the Osser Consulting Agreement.

On May 19, 2021, Mr. Osser stepped down as Interim Chief Executive Officer and assumed the role of Vice Chairman of the Board. In connection with his appointment as Vice Chairman and his continuing consulting services, Mr. Osser was granted options to purchase 2,000,000 shares of the Company’s common stock at an exercise price equal to the fair market value of the common stock on the grant date. The options vest over 5 five years and expire ten years from the date of grant.

Mr. Osser resigned from the Company’s Board of Directors effective November 7, 2025.

New Osser Agreement

On June 19, 2026, the Company entered into a new agreement with Mr. Osser and U.S. Asian, effective as of April 1, 2026 (the “New Osser Agreement”). The New Osser Agreement amended the Osser Employment Agreement, the Osser Consulting Agreement and the Succession Agreement.

With respect to periods before April 1, 2026, the New Osser Agreement provides that the Osser Consulting Agreement and the portions of the Succession Agreement relating to the Osser Consulting Agreement were canceled and terminated. As a result, the Company has no further obligation to make payments or provide benefits under those arrangements, whether in cash or shares.

Mr. Osser also waived compensation and other amounts and benefits owed under the Osser Employment Agreement, subject to and conditioned upon the Company’s:

Shares having a value of $50,000 that were earned under the prior Osser agreements on or before March 31, 2026 remain deliverable in accordance with the applicable terms of those agreements. All shares that otherwise would have been earned for periods after March 31, 2026 were forfeited.

Effective April 1, 2026, under the New Osser Agreement, Mr. Osser’s position was changed to Advisor to the Chief Executive Officer. The modified Osser Employment Agreement continues through July 17, 2027. During this period, Mr. Osser is entitled to annual cash compensation of $48,000, continuation of health benefits for himself and his wife, and a car allowance, subject to the limitations provided in the New Osser Agreement.

If the Company terminates Mr. Osser’s employment without cause, other than due to death or disability, if Mr. Osser terminates his employment for good reason, or if the Company fails to make a required payment within 30 days after its scheduled payment date, Mr. Osser is entitled to receive any amounts accrued through the termination or default date. He is also entitled to a lump-sum payment equal to the unpaid base salary, car allowance and healthcare payments that otherwise would have been payable through July 10, 2027. These amounts are payable in lieu of any termination-related payments under the prior Osser agreements.

For the three and six months ended June 30, 2026, the Company recorded $14,000 and $64,000 of expense under the Osser Employment Agreement.

For the three and six months ended June 30, 2026, the Company recorded $0.00 and $50,000 of expense under the Osser Consulting Agreement. For the three and six months ended June 30, 2025, the Company recorded $50,000 and $100,000 of expense under the Osser Employment Agreement.

Mr. Osser and his wife also entered into lock-up agreements restricting the transfer of their shares of the Company’s common stock through April 20, 2027. The lock-up agreements do not restrict the transfer of 363,339 shares for which the restrictive legends had previously been removed.

Beneficial Ownership

As of June 30, 2026, Mr. Osser beneficially owned 2,844,028 shares of the Company’s common stock and is entitled to receive an additional 3,394,200 upon the termination of his Employment and Consulting Agreement.

The previously disclosed statement that Mr. Osser was entitled to receive an additional 3,394,200 shares upon termination of the Osser Employment Agreement has been removed because the New Osser Agreement waived and restructured the relevant compensation obligations and provides that shares relating to periods after March 31, 2026 were forfeited.

Dr. D. Demesmin, Director

As of February 2024, the University Pain Medicine Center (STEMMEE), of which Dr. D. Demesmin, a member of the Company’s Board of Directors, serves as Chief Executive Officer, agreed to purchase products from the Company under terms and conditions consistent with those offered to other medical pain clinics in the United States. STEMMEE purchased medical products totaling approximately $12,000 and $18,000 for each of the three and six months ended June 30, 2026. STEMMEE purchased medical products totaling approximately $15,000 and $21,000 for each of the three and six months ended June 30, 2025. The Company was owed approximately $ 9,600 and $ 25,500 as of June 30, 2026 and December 31, 2025, respectively. These amounts are regarded in related party accounts receivable.

Arjan J. Haverhals, Director

The Company entered into a consulting agreement with Jan Adriaan (Arjan) Haverhals (the “Haverhals Consulting Agreement”), effective January 1, 2025. The Haverhals Consulting Agreement continues for an indefinite term unless terminated in accordance with its terms. Either party may terminate the Haverhals Consulting Agreement upon 90 days’ prior written notice. The Company may terminate the Haverhals Consulting Agreement upon 30 days’ prior written notice in the event of Mr. Haverhals’ inability to provide services. Under the Haverhals Consulting Agreement, Mr. Haverhals is entitled to receive consulting fees at an annual rate of $350,000, payable monthly in arrears. For 2025, compensation was structured as follows:

The Company recorded consulting expense of approximately $67,000 and $216,000 for the three and six months ended June 30, 2025 related to the Haverhals Consulting Agreement. No expense was recorded for the three and six months ended June 30, 2026.

Mr. Haverhals is entitled to reimbursement of reasonable expenses incurred in connection with the performance of his services. He serves as an independent contractor and is not eligible for Company-provided employee benefits, including health or accident insurance, life insurance, paid sick leave, or paid vacation. In connection with the Haverhals Consulting Agreement, Mr. Haverhals entered into the Company’s standard form of non-disclosure, non-solicitation, non-competition, and invention assignment agreement.

As of June 30, 2026, and December 31, 2025, the Company owed Mr. Haverhals approximately $0 and $89,000, respectively, under the Haverhals Consulting Agreement, which is included in accounts payable—related party in the Company’s condensed consolidated balance sheets. Subsequent to December 31, 2025, Mr. Haverhals agreed to waive approximately $66,000 of amounts payable to him, which had previously been included in accounts payable—related party.

Pursuant to the Haverhals Consulting Agreement, Mr. Haverhals is entitled to receive 895,013 shares of the Company’s common stock six months following his resignation as Chief Executive Officer, subject to the terms of the Haverhals Consulting Agreement. As of June 30, 2026, such shares had not been issued.

At the Company’s Annual Meeting of Stockholders held on December 18, 2025, Mr. Haverhals was not re-elected to the Board of Directors, and his term as a director expired at the conclusion of the Annual Meeting.

April 2025 Convertible Notes

On April 9, 2025, the Company issued a series of promissory notes in the aggregate amount of $800,000 to Mr. Neal Goldman, Ms. Benedetta Casamento, and Dr. Didier Demesmin, each of whom is a director of the Company. The notes are due April 9, 2028 and bear interest at the annual rate of prime less 2.50%, payable annually. All principal and interest shall be payable in cash and/or shares of common stock at the sole discretion of the Company. The notes are convertible into shares of common stock by the holder at any time and by the Company at maturity. If the Company sells equity securities for gross proceeds in excess of $4,000,000, the holders may request repayment of their note in either cash, shares of common stock or a combination of cash and shares; provided, that the holders would then be entitled to receive only so much cash as the net proceeds to the Company in such sale of equity securities, after payment of other indebtedness and other uses (other than working capital) specified as a use of the proceeds in the relevant offering or disclosure documentation, shall be in excess of $4,000,000. Upon a liquidation event of the Company, as defined in the notes which includes a sale of the Company or assets, a merger, reorganization or combination transaction where the shareholders before the transaction own less than 50% of the Company after the transaction and a liquidation, dissolution or winding-up of the Company, the notes will be repaid in cash or its portion of any non-cash consideration. The conversion rate for any issuance of shares of common stock will be at the then fair value of a share of common stock, with the fair value being determined with reference to the public market price of a share of common stock, but not less than $0.50. The notes are unsecured and have typical default terms.

On April 20, 2026, the Company completed the Private Placement of 7,962,963 units at a purchase price of $0.27 per unit, generating gross proceeds of approximately $2.15 million, consisting of $1.80 million in cash and a reduction of $351,000 in outstanding principal of the Company’s Convertible Notes, the holders of which applied such principal amounts toward the purchase of units in the offering in lieu of cash. Each of Mr. Neal Goldman, Ms. Benedetta Casamento and Dr. Didier Demesmin reduced their outstanding aggregate principal amount of Convertible Notes by $219,375, $87,750 and $43,875, respectively and received 812,501, 325,000 and 162,500 shares and warrants, respectively.

On July 24, 2026, the Company received notices of conversion (the “Conversion Notices”) from Benedetta Casamento, Dr. Didier Demesmin and Neal Goldman, each of whom is a director of the Company (collectively, the “Holders”), with respect to the Company’s amended and restated Convertible Notes. The Conversion Notices constitute the Holders’ elections, pursuant to Section 5(a) of the Convertible Bridge Notes, to convert the remaining outstanding principal amount and accrued interest under their respective Convertible Notes into shares of the Company’s common stock, effective automatically at such time as the Fair Value (as defined in the Convertible Notes) of the common stock is not less than $0.50 per share and the applicable Holder is permitted to buy and sell securities of the Company in compliance with the Company’s Insider Trading Policy.

BP4 S.r.l. / Innovest S.p.A.

BP4 S.r.l. / Innovest S.p.A.\n\nBP4 S.r.l. (“BP4”) is a significant shareholder of the Company, beneficially owning approximately 11.31% of the Company’s outstanding common stock, and is considered a related party. On January 15, 2026, the Company entered into an Amended and Restated Memorandum of Understanding (the “MOU”) with Innovest S.p.A., as the holder of certain consent and blockage rights with respect to BP4. Pursuant to the MOU, and subject to certain conditions, BP4 agreed to enter into a lock-up agreement pursuant to which it would not distribute or sell any of its shares of capital stock of the Company for twelve months following consummation of a $2.5 million offering by the Company. The lock-up provides for early release if the Company’s stock price exceeds specified thresholds for a defined period, permitting partial distributions of shares to BP4’s quotaholders. The Company paid BP4 $60,000 in respect of additional disbursements accumulated in connection with the transaction contemplated by the MOU, which payments are subject to an aggregate cap of $100,000.

On March 31, 2026, the Company entered into an amendment to the MOU to, among other things, revise the definition of “Qualified Offering” in order to facilitate an offering by the Company, and required certain additional persons and entities to enter into lock-up agreement. The Private Placement on April 20, 2026 satisfied the requirement of a “Qualified Offering” and the required additional persons and entities signed lock-up agreements.

Bendetta Casamento-Executive Chairman.

On June 24, 2026, the Board, with Benedetta Casamento not in attendance, determined, in view of the increased role played, and to continue to be played, by Ms. Casamento in the business and affairs of the Company, to approve the recommendation of the Compensation Committee, electing Ms. Casamento as Executive Chairman. Prior to becoming Executive Chairman, Ms. Casamento has been the Chairman of the Board of the Company as an independent director, devoting substantial time and effort to the Company. As Executive Chairman, she is expected to enhance executive leadership, strategic oversight, investor engagement, and corporate development support for the Company. Her duties and responsibilities as Executive Chairman include, without limitation, working collaboratively with the Chief Executive Officer and senior management to establish and execute the Company’s strategic objectives, supporting corporate development initiatives, including strategic partnerships, acquisitions, licensing opportunities, and commercial growth initiatives, assisting with investor relations activities, capital markets initiatives, financing transactions, and communications with current and prospective investors, and advising management on operational, financial, regulatory, and governance matters affecting the Company. For her services as Executive Chairman, the Company has agreed to pay her, (1) a salary at the rate of $75,000 per year as supplemental cash compensation, (2) 115.385% of the amount per year she would receive each year she is Executive Chairman if she remained an independent director and for being the chair and member of the committees she was chair and a member for such period (the “Director Equivalent”), in equity awards, in lieu of the equity she had previously been receiving as compensation in respect of such Board and committee service, and otherwise with the same vesting and other terms as awards of equity to directors for such Board and committee service, and (3) a one-time grant of $100,000 of shares of restricted common stock of the Company vesting on July 1, 2026. For the current year, the amount referred to in clause (1) above shall be $75,000, based on the Director Equivalent of $65,000. As Executive Chairman, Ms. Casamento would also be entitled to participate in the employee benefit plans and programs of the Company in which other senior executives of the Company participate, subject to eligibility requirements, enrollment criteria, and the other terms and conditions of such plans and programs. Ms. Casamento is no longer considered an independent director, and she resigned from the committees on which she served.

On June 24, 2026, Ms. Casamento and the Company entered into an employment letter agreement with respect to her status as Executive Chairman. The foregoing description of the material terms of such letter agreement does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which, previously filed with the Company’s Form 8-K, is an as Exhibit hereto.