Combine panko bread crumbs and milk in a small dish and set aside until the liquid is absorbed. In another small bowl, combine ½ cup flour, salt and pepper.
In a large bowl add the egg, garlic, teriyaki sauce, green onions, water chestnuts, ground chicken, remaining flour and panko mixture and gently combine using your hands until it is well mixed.
Form into 1” meatballs and roll each gently in flour mixture until well coated. Place on baking sheet and refrigerate for 20-30 minutes.
In a frying pan, heat 1 Tbsp oil over medium heat. Add meatballs so they do not touch and have enough room to flip over (this may need to be done in 2-3 batches). Brown all sides of the meatballs and remove from heat, continuing until all meatballs are cooked through.
Once meatballs are cooked and removed, in the same pan add all ingredients for the sauce with the exception of the green onions. Bring to a boil and allow to reduce and thicken (about 10 minutes). Once the sauce has thickened, add the meatballs back to the pan and toss to coat.