To make the meatballs, in a small bowl, combine Panko and milk. Set aside to soak for a minute.
In a large bowl, mix together Panko mixture, beef, garlic, egg, Worcestershire sauce, Italian seasoning, salt and pepper. With clean hands, mix the beef mixture until well combined.
Using a medium cookie scoop, shape the meatballs and arrange them on a baking sheet, lined with parchment paper.
To make the gravy, in a large skillet, heat 1 tablespoon of olive oil over medium heat.
Arrange the meatballs in one layer and brown on all sides, turning each meatball using a kitchen tong. (Note: Meatballs don’t need to be cooked all the way, we’re just browning for now.) Remove onto a clean plate.
Pour the remaining 1 tablespoon of olive oil into the same skillet and add mushrooms along with garlic. Cook the mushrooms stirring frequently for about 3 minutes, or until they’re nice and brown. Remove onto a clean plate.
In the same skillet, melt the butter and stir in the flour. Cook the flour mixture for at least 2 minutes, whisking constantly. (It's called roux. We're making it to thicken the gravy. If you don’t cook the roux long enough, you will taste raw flour in your gravy, so don’t rush this step.)
Slowly pour in the stock and Worcestershire sauce and bring it to a boil, whisking frequently.
Add browned meatballs and mushrooms and cook for additional 8-10 minutes. If the gravy thickens too much, add a little bit of water, or stock. Salt and pepper to taste.
If desired, add chopped parsley before serving. Serve over mashed potatoes, or noodles, for a complete meal.