NOTE 13 — 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 September 30, 2025. As of September 30, 2025, the purchase order commitment was approximately $2.3 million, and approximately $1.1 million was paid and reported in advance on contracts in the unaudited consolidated balance sheet. As of September 30, 2025 the Company recorded approximately $306,000 for the development of the next generation instrument in advances on contracts in the unaudited consolidated balance sheet. As of December 31, 2024, the purchase order commitment was approximately $3.2 million, and approximately $932,000 was paid and reported in advance on contracts in the consolidated balance sheet. The advances in contracts represent funding for future epidural instruments and epidural replacement parts. As of September 30, 2025, and December 31, 2024, 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 and $168,000, respectively.

(2) Operating Leases

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

The components of lease expense were as follows: 

 SCHEDULE OF COMPONENTS OF LEASE EXPENSE