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Note N - Commitments | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Commitments and Contingencies Disclosure [Text Block] | NOTE N — COMMITMENTS (1) Contract Manufacturing Agreement Milestone Scientific has informal arrangements with third-party manufacturers of the STA, CompuDent® and CompuMed® devices, pursuant to which they manufacture these products under specific purchase orders but without any long-term contract or minimum purchase commitment. The company entered into a new purchase commitment for the delivery of 2,700 STA CompuDent® instruments. As of December 31, 2024, the purchase order commitment was approximately $3.2 million, and approximately $1.3 million was paid and reported in advance 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. As of December 31, 2024 and 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 $168,000 and $76,000, respectively. (2) Leases Operating Leases The Company signed a seven-year lease in a new facility located in Roseland, New Jersey (the “Roseland Facility”), which commenced of January 8, 2021. Under the Roseland Facility lease, rent payments commence on April 1, 2021, and the monthly lease payments escalate annually on January 1 of each year, and range from $9,275 to $10,898 per month over the lease term. The Company is also required to pay a fixed electric charge equal to $2.00 per square foot which is paid in equal monthly installments over the lease term or $11,130 annually. These fixed monthly payments have been included in the measurement of the operating lease liability and related operating lease right-of-use asset as the Company has elected the practical expedient to not separate lease and non-lease components for all leases. The Company is also required to pay its proportionate share of certain operating costs and property taxes applicable to the leased premises more than new base year amounts, which are accounted for as variable lease expenses. As of December 31, 2024, total finance right-of-use assets were $67,201 and total finance liabilities were $67,202 of which $12,530 and $54,672 were classified as current and non-current, respectively. As of December 31, 2024 total operating right-of use assets were $257,842 and total operating lease liabilities were $281,852, of which $116,279 and $165,573 were classified as current and non-current, respectively. As of December 31, 2023, total finance right-of-use assets were $8,998 and total finance liabilities were $10,698 of which $10,264 and $434 were classified as current and non-current, respectively. As of December 31, 2023, total operating right-of use assets were $355,235 and total operating lease liabilities were $385,280, of which $103,427 and $281,853 were classified as current and non-current, respectively. 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:
|  | Twelve months ended |
|  | December 31, 2024 |  |  | December 31, 2023 |
Cash paid for operating lease liabilities |  | $ | 127,526 |  |  | $ | 127,526 |
Cash paid for finance lease liabilities |  |  | 11,172 |  |  |  | 10,740 |
Weighted Average Remaining Lease Term |  |  |  |  |  |  |  |
Finance leases (years) |  | 4.97 years |  |  | 1.04 years |
Operating leases (years) |  | 2.25 years |  |  | 3.25 years |
Weighted-average discount rate – operating leases |  |  | 9.20 | % |  |  |  |
Weighted-average discount rate – finance leases |  |  | 9.20 | % |  |  |  |
Maturity of lease liabilities as December 31, 2024 |  | Operating Lease |  |  | Finance Lease |
2025 |  |  | 136,343 |  |  |  | 13,668 |
2026 |  |  | 139,125 |  |  |  | 13,668 |
2027 |  |  | 35,477 |  |  |  | 13,668 |
2028 |  |  | - |  |  |  | 13,668 |
2029 |  |  | - |  |  |  | 13,668 |
Less: Interest |  |  | 310,945 |  |  |  | 68,340 |
Present Value of lease liabilities |  |  | (29,093 | ) |  |  | (1,138 | )
|  |  | 281,852 |  |  |  | 67,202 |

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