What changed in this filing

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Item 1. Business

2024-04-11 compared with 2023-03-31 · 364 added, 282 removed, 4 unchanged (99% of the section changed)

Corp, formerly Orbsat Corp (“NextPlat”), is a Nevada corporation and was originally incorporated in Florida in 1997.

headquarters and principal executive offices are located at 3250 Mary St., Suite 410, Coconut Grove, FL 33133.

Our telephone number is

(305) 560-5355, and our corporate website is www.nextplat.com .

Unless the context requires otherwise, in this report the terms

“the Company,” “we,” “us,” and, “our” refer to NextPlat and our wholly owned subsidiaries.

file annual, quarterly and current reports, proxy statements and other information with the SEC.

The SEC also maintains an Internet site

that contains annual, quarterly and current reports, proxy and information statements and other information that we (together with other

issuers) file electronically.

The SEC’s Internet site is www.sec.gov.

We make available free of charge on or through our website

our annual, quarterly and current reports and amendments to those reports as soon as reasonably practicable after we electronically file

such material with or furnish it to the SEC.

contents of our website or any other website are not incorporated by reference into this Annual Report on Form 10-K.

share and per share, information in the accompanying consolidated financial statements and footnotes has been retroactively restated

to reflect the reverse splits described above.

the e-commerce experience of our management team and our existing e-commerce platforms, the Company has embarked upon the rollout of

a state-of-the-art e-commerce platform to collaborate with businesses to optimize their ability to sell their goods online,

domestically, and internationally, and enabling customers and partners to optimize their e-commerce presence and revenue, which we

expect will become the focus of the Company’s business in the future.

Historically, the business of NextPlat has been the

provision of a comprehensive array of Satellite Industry communication services, and related equipment sales.

As detailed in Online

Storefronts and E-Commerce Platforms below, the Company operates two main e-commerce websites as well as 25 third-party e-commerce

storefronts on platforms such as Alibaba, Amazon, OnBuy, and Walmart.

These e-commerce venues form an effective global network

serving thousands of consumers, enterprises, and governments.

We are actively pursuing distribution, marketing and license

arrangements and joint ventures with companies that could distribute their products through our e-commerce platform.

seek to joint venture with or purchase part or all of businesses that manufacture or distribute products, particularly those that we

believe we could market through our e-commerce platform, as well as business that could enhance our e-commerce platform.

our efforts to enhance our e-commerce platform we have also begun the design and development of a next generation platform for

digital assets built for Web3 (an internet service built using decentralized blockchains).

This new platform (“NextPlat

Digital”) will enable the use of a range of digital assets, such as non-fungible tokens (“NFTs”), in e-commerce

and in community-building activities.

Recent Investments in Progressive Care Inc.

During 2022, with a view to enhancing

our product and services offerings, we invested in securities issued by Progressive Care Inc.

Progressive Care Inc.

RXMD) (“Progressive”)

is a Florida health services organization and provider of Third-Party Administration (TPA), data management, COVID-19 related diagnostics

and vaccinations, 340B contracted pharmacy services, prescription pharmaceuticals, compounded medications, provider of tele-pharmacy

services, the sale of anti-retroviral medications, medication therapy management (MTM), the supply of prescription medications to long-term

care facilities, and health practice risk management.

Our Executive Chairman and Chief Executive Officer, Charles Fernandez, was appointed

as the Chairman and Chief Executive Officer of Progressive in November 2022 along with our Board member, Mr.

Rodney Barreto, who was

appointed to serve as Vice Chairman of Progressive’s board of directors.

Our holdings in Progressive include preferred stock, common

stock, warrants and convertible debt, and we currently account for it on the equity method.

In addition, we have extended an equity line

of credit to Progressive.

Through conversion of our convertible debt and warrants as well as via securities issuances that would result

from utilization of the equity line of credit, we are able to own more than 50% of the voting equity securities of Progressive should

we choose to do so.

We have determined to use our ownership of the above securities to assert significant influence over Progressive Care, and we are

in the process of assessing whether we should take steps to obtain further control of Progressive and/or integrate Progressive’s

business with our own;

or whether we should maintain it as a separate business.

Communications

Products and Services

our legacy Global Telesat Communications Ltd and Orbital Satcom Corp business units, we provide Mobile Satellite Services (“MSS”)

solutions to fulfill the growing global demand for satellite-enabled voice, data, personnel and asset tracking, Machine-to-Machine (M2M)

and Internet of Things (IoT) connectivity services.

We provide these solutions for businesses, governments, military, humanitarian organizations,

and individual users, enabling them to communicate, connect to the internet, track and monitor remote assets and lone workers, or request

SOS assistance via satellite from almost anywhere in the world, even in the most remote and hostile of environments.

As we proceed to

grow and enhance our e-commerce business and product offerings, we will consider whether we should retain our Global Telesat Communications

Ltd and Orbital Satcom Corp business units, or whether we should sell or spin them off.

provide voice, data communications, IoT and M2M services via Geostationary and Low Earth Orbit (“LEO”) satellite constellations

and offer reliable connectivity in areas where terrestrial wireless or wireline networks do not exist or are limited, including remote

land areas, open ocean, airways, the polar regions and regions where terrestrial networks are not operational, for example due to political

conflicts and natural or man-made disasters.

have expertise and long-term experience in providing tracking and monitoring services via satellite, specifically through the Globalstar

Low Earth Orbit satellite network.

We own unique network infrastructure devices, known as appliqués, which are in various Globalstar

ground stations around the world and provide the signal receipt and processing technology that enables and powers the Globalstar simplex

data service.

Our ownership of these appliqués provides us with competitive access to the global simplex data service which addresses

the market demand for a small and cost-effective solution for sending data, such as geographic coordinates, from assets or individuals

in remote locations to a central monitoring station and is used in numerous applications such as tracking vehicles, asset shipments,

livestock, and monitoring unattended remote assets.

In addition, we also provide tracking and monitoring solutions using Automatic Identification

System (AIS), 2G-5G, Push-to-Talk and two-way radio technology.

generate revenue from both the provision of services and the sale of equipment.

Higher margin recurring service revenue from the sale

of monthly, annual, and prepaid airtime or messaging plans has historically represented an increasing proportion of our revenue, and

we expect that trend to continue as we introduce new products requiring associated airtime or messaging plans.

provide our products and services directly to end users and reseller networks located both in the United States and internationally through

our subsidiaries, U.S.

NextPlat Corp (“NextPlat” or “the Company” or “we” or “our”) is a global e-commerce and healthcare company.

Our e-commerce venues form an effective global network serving thousands of consumers, enterprises, and governments.

Our healthcare business is focused on improving the lives of patients with complex chronic diseases through a patient and provider engagement and their partnerships with payors, pharmaceutical manufacturers, and distributors, offering a broad range of solutions to address the dispensing, delivery, dosing, and reimbursement of clinically intensive, high-cost drugs

We operate in two segments:

our e-Commerce Business and our Healthcare Business.

Our e-Commerce Business

Leveraging the e-commerce experience of our management team and our existing e-commerce platforms, the Company has embarked upon the rollout of a state-of-the-art e-commerce platform to collaborate with businesses to optimize their ability to sell their goods online, domestically, and internationally, and enabling customers and partners to optimize their e-commerce presence and revenue, which we expect will become the focus of the Company’s business in the future.

Historically, the business of NextPlat has been the provision of a comprehensive array of Satellite Industry communication services, and related equipment sales.

As detailed in Online Storefronts and E-Commerce Platforms below, the Company operates two main e-commerce websites as well as 25 third-party e-commerce storefronts on platforms such as Alibaba, Amazon, OnBuy, and Walmart.

These e-commerce venues form an effective global network serving thousands of consumers, enterprises, and governments.

We are actively pursuing distribution, marketing and license arrangements and joint ventures with companies that could distribute their products through our e-commerce platform.

We may also seek to joint venture with or purchase part or all of businesses that manufacture or distribute products, particularly those that we believe we could market through our e-commerce platform, as well as business that could enhance our e-commerce platform.

Communications Products and Services

Through our legacy Global Telesat Communications Ltd and Orbital Satcom Corp business units, we provide Mobile Satellite Services (“MSS”) solutions to fulfill the growing global demand for satellite-enabled voice, data, personnel and asset tracking, Machine-to-Machine (M2M) and Internet of Things (IoT) connectivity services.

We provide these solutions for businesses, governments, military, humanitarian organizations, and individual users, enabling them to communicate, connect to the internet, track and monitor remote assets and lone workers, or request SOS assistance via satellite from almost anywhere in the world, even in the most remote and hostile of environments.

As we proceed to grow and enhance our e-commerce business and product offerings, we will consider whether we should retain our Global Telesat Communications Ltd and Orbital Satcom Corp business units, or whether we should sell or spin them off.

We provide voice, data communications, IoT and M2M services via Geostationary and Low Earth Orbit (“LEO”) satellite constellations and offer reliable connectivity in areas where terrestrial wireless or wireline networks do not exist or are limited, including remote land areas, open ocean, airways, the polar regions and regions where terrestrial networks are not operational, for example due to political conflicts and natural or man-made disasters.

We have expertise and long-term experience in providing tracking and monitoring services via satellite, specifically through the Globalstar Low Earth Orbit satellite network.

We own unique network infrastructure devices, known as appliqués, which are in various Globalstar ground stations around the world and provide the signal receipt and processing technology that enables and powers the Globalstar simplex data service.

Our ownership of these appliqués provides us with competitive access to the global simplex data service which addresses the market demand for a small and cost-effective solution for sending data, such as geographic coordinates, from assets or individuals in remote locations to a central monitoring station and is used in numerous applications such as tracking vehicles, asset shipments, livestock, and monitoring unattended remote assets.

In addition, we also provide tracking and monitoring solutions using Automatic Identification System (AIS), 2G-5G, Push-to-Talk and two-way radio technology.

We generate revenue from both the provision of services and the sale of equipment.

Higher margin recurring service revenue from the sale of monthly, annual, and prepaid airtime or messaging plans has historically represented an increasing proportion of our revenue, and we expect that trend to continue as we introduce new products requiring associated airtime or messaging plans.

We provide our products and services directly to end users and reseller networks located both in the United States and internationally through our subsidiaries, U.S.

based Orbital Satcom Corp (“Orbital Satcom”) and U.K.

based Global Telesat Communications Limited

We have a physical presence in the United States and the United Kingdom, as well as an ecommerce storefront presence

in 18 countries across 5 continents.

We have a diverse geographical customer base having provided solutions to more than 50,000 customers

located in more than 165 countries across most every continent in the world.

MSS products rely on satellite networks for voice, data and tracking connectivity and thus are not reliant on cell towers or other local

infrastructure.

As a result, our MSS solutions are suitable for recreational travelers and adventurers, government and military users,

and corporations and individuals wishing to communicate or connect to the internet from remote locations, or in the event of an emergency

such as a power outage, following a hurricane or other natural disaster during which regular cell phone, telephone and internet service

may not be available.

satellite communications products enable users to make voice calls, send and receive text messages and emails, and transmit GPS location

coordinates from virtually anywhere on the planet, no matter how remote the location and regardless of the availability of local communication

infrastructure.

Our range of satellite data products allows users around the world to connect to the internet, stream live video, and

communicate via voice and data applications.

are a provider of GPS enabled emergency locator distress beacons that can save lives, on land and at sea.

Our distress beacons enable

essential communication between our customers and search and rescue organizations during emergency situations and pinpoint locational

information to Search and Rescue services, essential during an emergency.

provide a wide range of satellite tracking devices used to monitor the location, movements, and history of almost anything that moves.

We specialize in offering satellite tracking services through the Globalstar satellite network and have supplied tens of thousands of

tracking devices which are used around the world to locate lone workers, track shipping containers, livestock, vehicles, and vessels

along with many other types of assets.

first product launched by the Company, SolarTrack, is a compact, lightweight, IoT tracking device powered by the sun and operating on

one of the most modern satellite networks in the world.

It is designed for tracking and monitoring anything that moves, or any remote

asset used outdoors, almost anywhere in the world and we anticipate strong demand from customers looking for a low cost, low maintenance

tracking device to monitor remote assets.

and Tracking Portal

advanced subscription-based mapping and tracking portal, GTCTrack, is available for use by registered customers who pay a monthly fee

to access it.

This mapping portal provides a universal and hardware-agnostic, cloud-based data visualization and management platform

that allows managers to track, command, and control assets in near-real-time.

Asset location reports including position, speed, altitude,

heading and past location and movement history reports for a wide range of tracking devices and other products sold by us are available

through GTCTrack.

Storefronts and E-Commerce Platforms

operate two e-commerce websites offering a range of MSS products and solutions through our subsidiaries, Orbital Satcom, which

targets customers in North and South America, and GTC which targets customers in the UK, EU, Middle East, Asia and the rest of the

based Global Telesat Communications Limited (“GTC”).

We have a physical presence in the United States and the United Kingdom, as well as an ecommerce storefront presence in 18 countries across 5 continents.

We have a diverse geographical customer base having provided solutions to more than 50,000 customers located in more than 165 countries across most every continent in the world.

Our MSS products rely on satellite networks for voice, data and tracking connectivity and thus are not reliant on cell towers or other local infrastructure.

As a result, our MSS solutions are suitable for recreational travelers and adventurers, government and military users, and corporations and individuals wishing to communicate or connect to the internet from remote locations, or in the event of an emergency such as a power outage, following a hurricane or other natural disaster during which regular cell phone, telephone and internet service may not be available.

Our satellite communications products enable users to make voice calls, send and receive text messages and emails, and transmit GPS location coordinates from virtually anywhere on the planet, no matter how remote the location and regardless of the availability of local communication infrastructure.

Our range of satellite data products allows users around the world to connect to the internet, stream live video, and communicate via voice and data applications.

We are a provider of GPS enabled emergency locator distress beacons that can save lives, on land and at sea.

Our distress beacons enable essential communication between our customers and search and rescue organizations during emergency situations and pinpoint locational information to Search and Rescue services, essential during an emergency.

We provide a wide range of satellite tracking devices used to monitor the location, movements, and history of almost anything that moves.

We specialize in offering satellite tracking services through the Globalstar satellite network and have supplied tens of thousands of tracking devices which are used around the world to locate lone workers, track shipping containers, livestock, vehicles, and vessels along with many other types of assets.

The first product launched by the Company, SolarTrack, is a compact, lightweight, IoT tracking device powered by the sun and operating on one of the most modern satellite networks in the world.

It is designed for tracking and monitoring anything that moves, or any remote asset used outdoors, almost anywhere in the world and we anticipate strong demand from customers looking for a low cost, low maintenance tracking device to monitor remote assets.

Mapping and Tracking Portal

Our advanced subscription-based mapping and tracking portal, GTCTrack, is available for use by registered customers who pay a monthly fee to access it.

This mapping portal provides a universal and hardware-agnostic, cloud-based data visualization and management platform that allows managers to track, command, and control assets in near-real-time.

Asset location reports including position, speed, altitude, heading and past location and movement history reports for a wide range of tracking devices and other products sold by us are available through GTCTrack.

Online Storefronts and E-Commerce Platforms

We operate two e-commerce websites offering a range of MSS products and solutions through our subsidiaries, Orbital Satcom, which targets customers in North and South America, and GTC which targets customers in the UK, EU, Middle East, Asia and the rest of the world.

These websites produce sales and attract enquiries from customers and potential customers from all around the world.

long term, we plan to develop additional country-specific websites to target customers in South America, Asia and Europe where we

anticipate there will be substantial further demand for our products.

addition to our two main e-commerce websites, we make portable satellite voice, data and tracking solutions easier to find and buy online

through our various third-party e-commerce storefronts such as Alibaba, Amazon, OnBuy and Walmart.

We currently operate 25 storefronts

across various countries on 5 continents.

We have invested in personnel to translate our listings correctly in the different countries

we are represented in and intend to regularly improve and increase our listings on all e-commerce sites.

We currently have more than

10,000 product listings on all third-party sites and invest significantly in inventory to hold at Amazon’s various fulfillment

centers around the world to ensure that orders are shipped to customers as quickly as possible.

The products include handheld satellite

phones, personal and asset tracking devices, portable high-speed broadband terminals, and satellite Wi-Fi hotspots.

Our Amazon online

marketplaces represented approximately 54.3% and 63.6% of total sales for the years ended December 31, 2022, and 2021, respectively and

we anticipate that these marketplaces will continue to represent a significant portion of our sales for the foreseeable future.

Our e-commerce

storefronts enable us to attract a significantly diversified level of sales from all over the world, ensuring we are not overly reliant

on any single market or sector for our sales revenue.

Furthermore, many products we sell require subscription-based services which allow

us to increase our recurring revenue airtime sales.

consumer behavior drastically changing because of COVID-19, e-commerce traffic witnessed double-digit gains in 2021 and 2020, respectively,

as stores closed, and shoppers used digital options.

This significant change in consumer shopping habits resulted in a substantial increase

of U.S., EU and U.K.

Over the long term, we plan to develop additional country-specific websites to target customers in South America, Asia and Europe where we anticipate there will be substantial further demand for our products.

In addition to our two main e-commerce websites, we make portable satellite voice, data and tracking solutions easier to find and buy online through our various third-party e-commerce storefronts such as Alibaba, Amazon, OnBuy and Walmart.

We currently operate 25 storefronts across various countries on 5 continents.

We have invested in personnel to translate our listings correctly in the different countries we are represented in and intend to regularly improve and increase our listings on all e-commerce sites.

We currently have more than 10,000 product listings on all third-party sites and invest significantly in inventory to hold at Amazon’s various fulfillment centers around the world to ensure that orders are shipped to customers as quickly as possible.

The products include handheld satellite phones, personal and asset tracking devices, portable high-speed broadband terminals, and satellite Wi-Fi hotspots.

Our Amazon online marketplaces represented approximately 51.6% and 54.3% of total sales for the years ended December 31, 2023, and 2022, respectively and we anticipate that these marketplaces will continue to represent a significant portion of our sales for the foreseeable future.

Our e-commerce storefronts enable us to attract a significantly diversified level of sales from all over the world, ensuring we are not overly reliant on any single market or sector for our sales revenue.

Furthermore, many products we sell require subscription-based services which allow us to increase our recurring revenue airtime sales.

With consumer behavior drastically changing because of COVID-19, e-commerce traffic witnessed double-digit gains in 2021 and 2020, respectively, as stores closed, and shoppers used digital options.

This significant change in consumer shopping habits resulted in a substantial increase of U.S., EU and U.K.

consumers electing to shop online.

Starting in 2021, senior management of the Company invested in a comprehensive

systems upgrade project with the goal of building a state-of-the-art e-commerce platform.

This implementation is substantially complete,

and the Company is collaborating with businesses to optimize their ability to sell their goods online, domestically, and internationally,

enabling customers and partners to optimize their e-commerce presence and revenue.

beyond our current global network of online storefronts serving thousands of consumers, enterprises, and governments, we are developing

a next generation platform for digital assets built for Web3.NextPlat Digital which has been designed and developed in collaboration

with consultants and contracted developers, will enable a range of digital assets, such as non-fungible tokens (“NFTs”),

in e-commerce and in community-building activities.

As currently contemplated, NextPlat Digital will facilitate the creation/minting,

purchase and sale of a broad range of NFT products, including, but not limited to, art, music, collectables, digital real estate, video

games and game items.

NextPlat Digital will be used to create both (a) public marketplaces, for us and third parties, where anyone with

a crypto wallet can buy and sell their own NFTs, and (b) private marketplaces that only allow a particular company or entity to sell

their own NFTs (such as for the promotion of a particular brand or product).

compete in the mobile satellite products and services sector of the global communications industry.

The products and airtime that we

sell are intended to meet users’ needs for connectivity in all locations where existing terrestrial wireline and wireless communications

networks do not exist, do not provide sufficient coverage, or are impaired.

Government organizations, including military and intelligence

agencies and disaster response agencies, non-governmental organizations and industrial operations and support teams depend on mobile

voice and data satellite communications products and services on a regular basis.

Businesses with global operations require reliable

communications services when operating in remote locations around the world.

Mobile satellite services users span many sectors, including

emergency services, maritime, aviation, government, utilities, oil and gas, mining, recreation, forestry, heavy equipment, construction,

and transportation, among others.

We believe many of our customers view satellite communications products and services as critical to

their daily operations.

is we believe a fast growing, multi-billion-dollar global market for a small and cost-effective solution for receiving and processing

mobile voice and data communications from remote locations used in applications such as tracking vehicles or asset shipments, monitoring

unattended remote assets or mobile security.

Over the past two decades, the global mobile satellite services market has experienced significant

Increasingly, better-tailored, improved-technology products and services are creating new channels of demand for mobile satellite

Growth in demand for mobile satellite voice services is driven by the declining cost of these services, the diminishing size

and lower costs of the devices, as well as heightened demand by governments, businesses and individuals for ubiquitous global voice and

data coverage.

We believe our solutions are ideally suited for industries such as maritime, aviation, government/military, emergency/humanitarian

services, mining, forestry, oil and gas, heavy equipment, transportation and utilities, as well as recreational users.

We do not tailor

our products and services to different types of customers as in our experience military, non-profit, government and recreational users

tend to purchase the same types of products and services.

global satellite communications industry is highly competitive.

In certain regions, such as North America, we currently face substantial

competition from other service providers that offer a range of mobile and fixed communications options.

In other regions, such as the

UK and EU, we have a strong presence and are one of the leading providers of satellite communicators, emergency locator beacons and satellite

tracking devices.

We compete primarily on the basis of coverage, quality, portability, pricing and in the case of our e-commerce storefronts,

availability of services and products.

competitors for our satellite telecommunications services and products are other resellers of leading satellite networks such as Iridium,

Inmarsat, Thuraya and Globalstar, some of which are also our suppliers.

We expect the competition for our satellite telecommunications

services and our satellite tracking and monitoring services to increase significantly as market demand accelerates.

believe that we are well positioned to compete for the satellite telecommunications services business largely on a cost basis and our

global e-commerce presence, which makes products more accessible to buy as compared to more traditional methods of purchasing e.g., bricks

and mortar storefronts.

competitive strengths

believe that the following strengths contribute to our success:

global presence enables us to compete in various markets around the world, with our multi-lingual personnel allowing us to respond

to global customer inquiries with 24/7/365 customer support.

significant expertise in global e-commerce sales allows us to maintain a competitive advantage over traditional methods of purchase

through “brick and mortar” stores.

significant levels of inventory stored in fulfillment centers around the world enable us to quickly secure customer orders against

competitors who may not hold available inventory.

of scale of a leading provider of MSS product allows us to offer competitive prices for our

contracts and experience with Globalstar allow us to compete competitively on satellite tracking

opportunities.

diverse customer base with no single customer representing more than 3.0% of our annual gross sales revenue, and no single country

representing more than 33% of our gross annual sales revenue as of December 31, 2022.

This diversification reasonably permits the

Company not to rely on any single customer, or group of customers, on any single product line, or any specific geographic area.

Amazon sales represent the majority of our sales effort in the last 24 months.

business strategy

intend to achieve our mission and further grow our business by pursuing the following strategies:

product offerings - we are constantly increasing our product lines and offerings and will continue to do so in the future.

expansion – We intend to open new global e-commerce storefronts around the world to develop sales in new markets.

sourced revenue - We intend to target US government/GSA sales which have not historically represented a significant part of our

sales revenue.

Starting in 2021, senior management of the Company invested in a comprehensive systems upgrade project with the goal of building a state-of-the-art e-commerce platform.

This implementation is substantially complete, and the Company is collaborating with businesses to optimize their ability to sell their goods online, domestically, and internationally, enabling customers and partners to optimize their e-commerce presence and revenue.

Industry and Market of our e-Commerce Operations Business

We compete in the mobile satellite products and services sector of the global communications industry.

The products and airtime that we sell are intended to meet users’ needs for connectivity in all locations where existing terrestrial wireline and wireless communications networks do not exist, do not provide sufficient coverage, or are impaired.

Government organizations, including military and intelligence agencies and disaster response agencies, non-governmental organizations and industrial operations and support teams depend on mobile voice and data satellite communications products and services on a regular basis.

Businesses with global operations require reliable communications services when operating in remote locations around the world.

Mobile satellite services users span many sectors, including emergency services, maritime, aviation, government, utilities, oil and gas, mining, recreation, forestry, heavy equipment, construction, and transportation, among others.

We believe many of our customers view satellite communications products and services as critical to their daily operations.

There is we believe a fast growing, multi-billion-dollar global market for a small and cost-effective solution for receiving and processing mobile voice and data communications from remote locations used in applications such as tracking vehicles or asset shipments, monitoring unattended remote assets or mobile security.

Over the past two decades, the global mobile satellite services market has experienced significant growth.

Increasingly, better-tailored, improved-technology products and services are creating new channels of demand for mobile satellite services.

Growth in demand for mobile satellite voice services is driven by the declining cost of these services, the diminishing size and lower costs of the devices, as well as heightened demand by governments, businesses and individuals for ubiquitous global voice and data coverage.

We believe our solutions are ideally suited for industries such as maritime, aviation, government/military, emergency/humanitarian services, mining, forestry, oil and gas, heavy equipment, transportation and utilities, as well as recreational users.

We do not tailor our products and services to different types of customers as in our experience military, non-profit, government and recreational users tend to purchase the same types of products and services.

Competition to our e-Commerce Operations Business

The global satellite communications industry is highly competitive.

In certain regions, such as North America, we currently face substantial competition from other service providers that offer a range of mobile and fixed communications options.

In other regions, such as the UK and EU, we have a strong presence and are one of the leading providers of satellite communicators, emergency locator beacons and satellite tracking devices.

We compete primarily on the basis of coverage, quality, portability, pricing and in the case of our e-commerce storefronts, availability of services and products.

The competitors for our satellite telecommunications services and products are other resellers of leading satellite networks such as Iridium, Inmarsat, Thuraya and Globalstar, some of which are also our suppliers.

We expect the competition for our satellite telecommunications services and our satellite tracking and monitoring services to increase significantly as market demand accelerates.

We believe that we are well positioned to compete for the satellite telecommunications services business largely on a cost basis and our global e-commerce presence, which makes products more accessible to buy as compared to more traditional methods of purchasing e.g., bricks and mortar storefronts.

Our competitive strengths

We believe that the following strengths contribute to our success:

Our global presence enables us to compete in various markets around the world, with our multi-lingual personnel allowing us to respond to global customer inquiries with 24/7/365 customer support.

Our significant expertise in global e-commerce sales allows us to maintain a competitive advantage over traditional methods of purchase through “brick and mortar” stores.

Our significant levels of inventory stored in fulfillment centers around the world enable us to quickly secure customer orders against competitors who may not hold available inventory.

Economies of scale of a leading provider of MSS product allows us to offer competitive prices for our products.

Long-term contracts and experience with Globalstar allow us to compete competitively on satellite tracking opportunities.

A diverse customer base with no single customer representing more than 3.0% of our annual gross sales revenue, and no single country representing more than 33% of our gross annual sales revenue as of December 31, 2023.

This diversification reasonably permits the Company not to rely on any single customer, or group of customers, on any single product line, or any specific geographic area.

Our Amazon sales represent the majority of our sales effort in the last 24 months.

Our business strategy

We intend to achieve our mission and further grow our business by pursuing the following strategies:

Increased product offerings - we are constantly increasing our product lines and offerings and will continue to do so in the future.

Marketplace expansion – We intend to open new global e-commerce storefronts around the world to develop sales in new markets.

Government sourced revenue - We intend to target US government/GSA sales which have not historically represented a significant part of our sales revenue.

We will also recruit experienced government sales professionals to assist with this plan.

We plan to become an approved

seller on the US Government’s GSA Schedule, which gives federal, and in some cases state and local buyers, access to a great

number of commercial products and services at negotiated ceiling prices.

Schedule purchases represent approximately 21% of overall

federal procurement spending.

innovation - We will continue to launch our own innovative branded products, such as our SolarTrack solar powered satellite tracking

device, to differentiate us and gain a competitive edge over other MSS suppliers.

acquisitions - We will seek suitable acquisition opportunities to further increase our scale, expand sales and access new markets

Platforms - Expanding beyond our current global network of online storefronts serving thousands of consumers, enterprises, and

governments, we intend to develop a next generation platform for digital assets built for Web3.

Our new platform, which is currently

in the design and development phase in collaboration with consultants and contracted developers, will enable the use of a range of

digital assets, including NFTs, in e-commerce and in community-building activities.

success and ability to compete depends in part on our ability to maintain our trade secrets.

All of our employees and consultants are

subject to non-disclosure agreements and other contractual provisions to establish and maintain our proprietary rights.

contract laws and regulations affect how we will do business with our customers, and in some instances, will impose added costs on our

A violation of specific laws and regulations could result in the imposition of fines and penalties, and the termination of

any contracts, or the inability to bid on future contracts.

We intend our Orbital Satcom subsidiary to become qualified as a government

Our products may also be subject to regulation by the National Telecommunications and Information Administration and the

Federal Communications Commission that regulate wireless communications.

As of December 31, 2022, we had 18 full-time employees

and 1 part-time employee.

and Availability of Components

materials and equipment for our products are custom-made for those products and are dependent upon either a single or limited number

of suppliers.

A supplier failure could cause delays in product delivery if another supplier cannot be found promptly, or if the quality

of such replacement supplier’s components is inferior or unacceptable.

As a result of COVID-19 and related supply chain constraints,

we have experienced shortages in inventory due to manufacturing and logistical issues.

Risks and History of Losses

ability to achieve our mission and execute our strategies is subject to certain challenges, risks and uncertainties, including, among

ability to obtain sufficient funding to expand our business and respond to business opportunities

ability to acquire new customers or retain existing customers in a cost-effective manner

ability to successfully improve our production efficiencies and economies of scale

ability to manage our supply chain to continue to satisfy our future operation needs

ability to retain our market share in our industry

have incurred significant net losses since our inception.

For the years

ended December 31, 2022, 2021, and 2020, we have incurred net losses of $9.2 million, $8.1 million, and $2.8 million, respectively.

of December 31, 2022, we had an accumulated deficit of approximately $31.1 million.

We expect to incur additional losses prior to recording

sufficient revenue from our operations as a result of the costs associated with expanding and seeking additional sources of revenue to

our current revenue base.

We plan to become an approved seller on the US Government’s GSA Schedule, which gives federal, and in some cases state and local buyers, access to a great number of commercial products and services at negotiated ceiling prices.

Schedule purchases represent approximately 21% of overall federal procurement spending.

Product innovation - We will continue to launch our own innovative branded products, such as our SolarTrack solar powered satellite tracking device, to differentiate us and gain a competitive edge over other MSS suppliers.

Future acquisitions - We will seek suitable acquisition opportunities to further increase our scale, expand sales and access new markets and sectors.

E-Commerce Platforms - Expanding beyond our current global network of online storefronts serving thousands of consumers, enterprises, and governments.

Our Healthcare Operations Business

Our healthcare operations, which are run through our subsidiary, Progressive Care Inc.

and its wholly-owned subsidiaries, offers personalized healthcare services and technology that provides prescription pharmaceuticals and risk and data management services to healthcare organizations and providers.

Pharmco provides prescription pharmaceuticals, compounded medications, tele-pharmacy services, anti-retroviral medications, medication therapy management, the supply of prescription medications to long-term care facilities, contracted pharmacy services for 340B covered entities under the 340B Drug Discount Pricing Program, and health practice risk management.

Through Pharmco, LLC doing business as Pharmcorx (“Pharmco 901”) and Pharmcorx LTC, Touchpoint RX, LLC doing business as PharmcoRx 1002, LLC (“Pharmco 1002”), Family Physicians RX, Inc.

doing business as PharmcoRx 1103 and PharmcoRx 1204 (“FPRX” historically or “Pharmco 1103” and “Pharmco 1204”) (pharmacy subsidiaries collectively referred to as “Pharmco”) we also offer certain disease testing and vaccinations.

We offer services in a variety of languages, including English, Spanish, French, Creole, Portuguese, Ukrainian and Russian.

Our services are designed to provide satisfaction across all medication stakeholders and enhance loyalty and key performance metrics.

We offer value-added services at no additional charge including prior authorization assistance, same-day home-medication delivery, on site provider consultation services, primary care reporting and analytics, and customized packaging solutions.

The pharmacies accept most major insurance plans and provide access to co-pay assistance programs to income qualified patients, discount and manufacturer coupons, and competitive cash payment options.

Products and Services

We enhance patient adherence to complex drug regimens, collect and report data, and ensure effective dispensing of medications to support the needs of patients, providers, and payors.

Our patient and provider support services ensure appropriate drug initiation, facilitate patient compliance and adherence, and capture important information regarding safety and effectiveness of the medications that we dispense.

Pharmco is rated by pharmacy benefit managers (“PBMs”) based on its ability to adequately supply chronic care medications to patients during a measurement period.

This score is then compared to the scores of other pharmacies in the network at which point a relative rating is issued.

For the year ended December 31, 2023, per EQuIPP®, a performance information management tool that provides standardized, benchmarked data to help shape strategies and guide medication-related performance improvement, our performance score was Five Stars, ranking our pharmacy among the top pharmacies in the U.S.

Primary care physicians may refer patients to pharmacies that have high performance scores, though patients retain the right to have their prescriptions dispensed by a network of pharmacies of their choice.

Through our wholly owned subsidiary, ClearMetrX, we offer data management and reporting services to support health care organizations.

There are substantial restrictions in federal and state laws on the use and sharing of patient data and ClearMetrX is in compliance with such laws.

The ClearMetrX offerings include data management and Third-Party Administration (“TPA”) services for 340B covered entities, pharmacy data analytics, and programs to manage HEDIS Quality Measures including Medication Adherence.

These offerings cater to the glaring need for frontline providers to understand best practices, patient behaviors, care management processes, and the financial mechanisms behind these decisions.

We provide data access and actionable insights that providers and support organizations can use to improve their practice and patient care.

Pharmco also provides contracted pharmacy services for 340B covered entities under the 340B Drug Discount Pricing Program.

Under the terms of these agreements, we act as a pass through for third-party payor reimbursements on prescription claims adjudicated on behalf of each 340B covered entity and receive a dispensing fee per prescription.

These dispensing fees vary by the 340B covered entity and the level of service provided by us.

For our long-term care (“LTC”) customers, Pharmco provides purchasing, repackaging and dispensing of both prescription and non-prescription pharmaceutical products.

Pharmco utilizes a unit-of-dose packaging system as opposed to the traditional vials as this method of distribution is the industry best practice standard.

Pharmco is equipped for various types of unit-of-dose packaging options to meet the needs of LTC patients and retail customers.

Pharmco uses the same robotic packaging systems currently used by chain, mail order, and large-scale pharmacies.

Pharmco also provides computerized maintenance of patient prescription histories, third-party billing and consultant pharmacist services.

Pharmco’s consultant pharmacist services consist primarily of evaluation of monthly patient drug therapy and monitoring the LTC institution’s drug distribution system.

Medication therapy management (“MTM”) involves review and adjustment of prescribed drug therapies to improve patient health outcomes for patients with multiple prescriptions.

This process includes several activities such as performing patient assessments, creating medication treatment plans, monitoring the effectiveness of and adherence to prescribed therapies, and delivering documentation of these services to the patient’s physician to coordinate comprehensive care.

Distribution Methods

We currently deliver prescriptions throughout Florida and ship medications to residents in those states where we hold non-resident pharmacy licenses.

We currently hold Florida Community Pharmacy Permits at all Florida pharmacy locations and our Pharmco 901 location is licensed as a non-resident pharmacy in the following states:

Arizona, Colorado, Connecticut, Georgia, Illinois, Minnesota, Nevada, New Jersey, New York, Pennsylvania, Texas, and Utah.

We can dispense to patients in the state of Massachusetts without a non-resident pharmacy license because Massachusetts does not require such a license for these activities.

Pharmco subsidiaries are full-service retail specialty services pharmacies that offer same-day free delivery within Florida.

Industry and Market of our Healthcare Operations Business

Pharmacy operations

The retail pharmacy and pharmaceutical wholesale industries are highly competitive and dynamic and have experienced consolidation and an evolving competitive landscape in recent years.

Prescription drugs play a significant role in healthcare, constituting a first line of treatment for many medical conditions.

New and innovative drugs will improve quality of life and control healthcare costs.

In light of accelerating usage of mail order and delivery-based services, both before and after the global COVID-19 pandemic, we believe the market for personalized and convenient care access is increasing.

We have provided same-day and next-day home delivery services since the beginning of our operations.

We are well positioned in Florida to gain additional market share among a broad demographic of patients due to our high-performance scores and value-added services.

Additionally, we value opportunities that create strategic partnerships, acquire synergistic operations and expand current operations to round out pharmacy capabilities which could potentially include, but are not limited to, specialty medications, sterile compounding, and mail-order.

Data management services

The latest trend in healthcare is to use data to improve patient outcomes and quality of life – a practice known as “Applied Health Analytics”.

“Data analytics” refers to the practice of aggregating large data sets and analyzing them to draw important insights and recommendations.

This process is increasingly aided by new software and technology that facilitates the examination of large volumes of data to detect hidden information.

A key objective within organizations with access to large data collections is to harness the most relevant data and use it to optimize decision making.

ClearMetrX developed the 340MetrX platform that retrieves dispensing pharmacy data to provide physicians and 340B covered entities with valuable and insightful reports and analytics to manage their operations.

We also serve the following key constituents, to benefit our patients:

Physicians and Health Systems:

Our team works with physician offices to manage prior-authorization and other requirements of managed care organization requirements, such as denial and appeal process, to ensure that complicated administrative tasks do not impair the delivery of quality patient care.

We provide risk evaluation services, implement risk mitigation strategies, and collect patient adherence data to provide physicians and health systems with enhanced visibility.

Our tools and processes improve physician performance metrics which in turn results in enhanced profitability of the physicians’ practices.

We manage prescription regimens for chronically ill populations and help payors, including health insurance plans and PBMs, reduce costs through patient care management, reduction in readmission rates, decreased acute care spending for chronic care conditions, formulary compliance, and implementation of lowest cost-effective alternative therapies.

Virtual Healthcare Services and Healthcare Technologies

Virtual healthcare services, or Telehealth, is a growing segment of the healthcare sector.

It involves remotely exchanging patient data between locations for the purposes of obtaining assistance in monitoring and diagnosing.

Telehealth allows the healthcare practitioner to easily offer their services on consultation, care management, diagnosis, and self-management services using information and communication technologies.

These services are being offered through various modes of delivery, such as on-premises, web-based, and cloud-based delivery.

A growing population over the age of 65, the increase in the number of chronic diseases, and a rise in demand for home monitoring devices are the major drivers which are likely to aid the growth of the telehealth market.

In the current environment, healthcare information is increasingly fragmented with numerous electronic healthcare record platforms, virtual care systems, pharmacy software, and data silos and transmitters which lack fundamental integration.

Healthcare stakeholders are often at odds about proper care techniques and this lack of alignment increases burdens on providers and patients alike and is associated with decreasing satisfaction with healthcare services and negative health outcomes.

Growth Strategy

We plan to grow our healthcare operations business by executing on the following key growth strategies:

Data Management Services.

We believe that data management for frontline and independent providers, 340B covered entities, and pharmacies will have increasing importance as health systems evolve to become virtual and digitized.

Increasing focus on performance, margins, and quality, means that our models and platforms will have strategic value through our roots in day-to-day care management.

Data management services will become an increasing driver of growth and development for us with its higher margins and diverse monetization pathways.

Invest in Sales and Marketing.

We are based in South Florida and will continue to grow our dispensing operations throughout the state, and there are opportunities to expand geographically throughout the rest of the country.

Our data management services and health IT services can be used by customers across the U.S.

and we expect to continue to invest in sales and marketing efforts for these services.

Selectively Pursue Growth Through Strategic Acquisitions.

We believe the specialty pharmacy industry is highly fragmented and provides numerous opportunities to expand through acquisitions.

While we will continue to focus on growing our business organically, we believe we can opportunistically enhance our competitive position through complementary acquisitions in both existing and new markets.

We plan to selectively evaluate potential acquisition opportunities in other therapeutic categories, services, and technologies with the goal of preserving our culture, optimizing patient outcomes, enhancing value to other constituents, and building long-term value for our shareholders.

Competition to our Healthcare Operations Business

Competitive Strengths

We believe we are well positioned to continue to increase our market share based on the following competitive strengths:

Adding value to all constituents.

The value we deliver to all constituents is based upon our thousands of daily patient interactions.

We help patients adhere to complicated medication therapies, process refills, manage any side effects, and manage any insurance concerns ensuring that they get the best standard of care.

The clinical efficacy of drug therapies, especially for acute and chronic conditions, is typically enhanced when patients precisely follow the prescribed treatment regimens, including dosing and frequency.

Pharmacies are measured against their peers to improve quality of patient care.

We have dedicated staff to track performance metrics, ensuring high comparative adherence rates.

Across the population, an average 50% of patients are adherent to prescribed medication protocols.

We believe our high adherence rates are due to, among other things, our model of proactive patient engagement, direct communication with and connections to healthcare stakeholders, our patient training and education, patient behavior analysis and medication coaching, compliance packaging, tracking timing of refills, free home delivery, and language support.

We also help identify third-party funding support programs to help cover expensive out-of-pocket costs.

Clinically trained operational professionals.

Our licensed pharmacists and technicians have been trained on our patient care model and data management tools to conduct a full healthcare evaluation.

These healthcare professionals not only dispense medications, but also analyze patients’ needs, behaviors, lifestyles, healthcare services providers, and payor resources to optimize the medication therapies received.

Our staff conducts this full healthcare evaluation while also communicating necessary care information to authorized providers and caregivers before medications are dispensed, which differentiates our pharmacy operations from our competitors’ models.

Lean and nimble operational strategy.

Healthcare is an industry where best practices are continuously evolving.

With increasing emphasis on reducing healthcare costs which puts pressure on gross margins, we have identified new trends and opportunities pivoting to business processes better suited to future environments.

Additionally, we have focused on diversifying our revenue streams within the pharmacy industry to identify complementary and associated revenue opportunities to keep the operation one step ahead of market forces.

Diversity and cultural awareness .

We represent the fabric of the community from which we originate.

Our employees consist of diverse faiths, races, ethnic origins, and sexual orientations.

This provides us with the unique ability to speak the language that our patients and providers speak.

It has also allowed us to be innovative in our approach to healthcare by leveraging the broad perspectives of our team to challenge our methodologies and be responsive to the unique needs of our patients, clients, and customers.

Competitive Positions and Methods of Competition

We compete with national and independent retail drug stores, supermarkets, convenience stores, mail order prescription providers, discount merchandisers, membership clubs, health clinics, provider dispensaries, and internet pharmacies.

Competition is based on several factors including store location and convenience, customer service and satisfaction, product selection and variety, and price.

Our primary competitive advantages lie in providing personalized service to the patients and facility operators, selectively adding labor saving and compliance enhancing processes and carrying inventory to provide rapid delivery of all pharmaceutical needs, free home delivery services, and data management and analytics.

In the United States, the provision of healthcare services of any kind is highly competitive.

Our ability to recruit qualified personnel, attract new institutional and retail clients, and expand the reach of our pharmacy operations relies on our ability to quickly adapt to changing societal attitudes, market pressure, and government regulation.

We face substantial competition within the pharmaceutical healthcare services industry and in the past year have seen even more consolidation.

We expect to see this trend continue in the coming year and it is uncertain what effect, if any, these consolidations will have on us or the industry.

The industry includes several large, well-capitalized companies with nationwide operations and capabilities in the specialty services and PBM services arenas, such as CVS Caremark, Express Scripts, Humana, Walgreens, Optum, MedImpact Healthcare Systems and many smaller organizations that typically operate on a local or regional basis.

In the Specialty Pharmacy Services segment, we compete with several national and regional specialty pharmacy companies that have substantial financial resources and which also provide products and services to the chronically ill, such as CVS Caremark, Express Scripts, Humana, Optum and Walgreens.

Some of our pharmacy service competitors are under common control with, or are owned by, pharmaceutical wholesalers and distributors or retail pharmacy chains and may be better positioned with respect to the cost-effective distribution of pharmaceuticals.

Some of our primary competitors, such as Omnicare and Walgreens, have a substantially larger market share than our existing market share.

Moreover, some of our competitors may have secured long-term supply or distribution arrangements for prescription pharmaceuticals necessary to treat certain chronic disease states on price terms substantially more favorable than the terms currently available to us.

Because of such advantageous pricing, we may be less price competitive than some of these competitors with respect to certain pharmaceutical products.

Intellectual Property

Our success and ability to compete depends in part on our ability to maintain our trade secrets.

All of our employees and consultants are subject to non-disclosure agreements and other contractual provisions to establish and maintain our proprietary rights.

Regulatory Matters

Government contract laws and regulations affect how we will do business with our customers, and in some instances, will impose added costs on our business.

A violation of specific laws and regulations could result in the imposition of fines and penalties, and the termination of any contracts, or the inability to bid on future contracts.

We intend our Orbital Satcom subsidiary to become qualified as a government contractor.

Our products may also be subject to regulation by the National Telecommunications and Information Administration and the Federal Communications Commission that regulate wireless communications.

Government approval is necessary to open any new pharmacy or other health services location.

Effect of Existing or Probable Governmental Regulations

As a participant in the healthcare industry, our operations and relationships are subject to federal and state laws and regulations and enforcement by federal and state governmental agencies.

Various federal and state laws and regulations govern the purchase, dispensing or distribution, and management of prescription drugs and related services we provide and may affect us.

We believe that we are in substantial compliance with all legal requirements material to our operations.

We conduct ongoing educational programs to inform employees regarding compliance with relevant laws and regulations and maintain a formal reporting procedure to disclose possible violations of these laws and regulations to the Office of Inspector General (“OIG”) of the U.S.

Department of Health and Human Services.

Professional Licensure .

Pharmacists, pharmacy technicians and certain other health care professionals employed by us are required to be individually licensed or certified under applicable state law.

We perform searches in criminal, federal and state exclusion lists, and other background checks on employees and are required under state licensure to ensure that our employees possess all necessary licenses and certifications.

We believe that our employees comply in all material respects with applicable licensure laws.

State laws require that each pharmacy location be licensed as an in-state or non-resident pharmacy to dispense pharmaceuticals in that state.

State controlled substance laws require registration and compliance with state pharmacy licensure, registration or permit standards promulgated by the state’s pharmacy licensing authority.

Such standards often address the qualification of an applicant’s personnel, the adequacy of its prescription fulfillment and inventory control practices and the adequacy of its facilities.

In general, pharmacy licenses are renewed annually or biennial according to state laws.

We believe that our pharmacies’ present and future locations comply with all state licensing laws applicable to these businesses.

If our pharmacy locations become subject to additional licensure requirements, are unable to maintain their required licenses or if states place burdensome restrictions or limitations on pharmacies, our ability to operate in the state would be limited, which could have an adverse impact on our business.

Other Laws Affecting Pharmacy Operations .

We are subject to federal and state statutes and regulations governing the operation of pharmacies, repackaging of drug products, wholesale distribution, dispensing of controlled substances, medical waste disposal, and clinical trials.

Federal and state statutes and regulations govern the labeling, packaging, advertising and adulteration of prescription drugs and the dispensing of controlled substances.

Federal and state-controlled substance laws require us to register our pharmacies with the U.S.

Drug Enforcement Administration (“DEA”) and to comply with security, record keeping, inventory control, labeling standards and other requirements to dispense controlled substances.

Food, Drug and Cosmetic Act .

Certain provisions of the federal Food, Drug and Cosmetic Act govern the handling and distribution of pharmaceutical products.

This law exempts many pharmaceuticals and medical devices from federal labeling and packaging requirements if they are not adulterated or misbranded and are dispensed in accordance with, and pursuant to, a valid prescription.

We believe that we comply in all material respects with all applicable requirements.

Anti-Kickback Laws .

Subject to certain statutory and regulatory exceptions (including exceptions relating to certain managed care, discount, bona fide employment arrangements, group purchasing and personal services arrangements), the federal “anti-kickback” law prohibits the knowing and willful offer or payment of any remuneration to induce the referral of an individual or the purchase, lease or order (or the arranging for or recommending of the purchase, lease or order) of healthcare items or services paid for in whole or in part by Medicare, Medicaid or other government-funded healthcare programs (including both traditional Medicaid fee-for-service programs as well as Medicaid managed care programs).

Violation of the federal anti-kickback statute could subject us to criminal and/or civil penalties including suspension or exclusion from Medicare and Medicaid programs and other government-funded healthcare programs for not less than five years, or the imposition of civil monetary penalties.

Exclusion from any of these programs or sanctions of civil monetary penalties could have a material adverse impact on our operations and financial condition.

The federal anti-kickback law has been interpreted broadly by courts, the OIG of the U.S.

Department of Health and Human Services (“HHS”), and other administrative bodies.

Because of the broad scope of those statutes, federal regulations establish certain safe harbors from liability.

Safe harbors exist for certain properly reported discounts received from vendors, certain investment interests held by a person or entity, and certain properly disclosed payments made by vendors to group purchasing organizations, as well as for other transactions or relationships.

Nonetheless, a practice that does not fall within a safe harbor is not necessarily unlawful but may be subject to scrutiny and challenge.

In the absence of an applicable exception or safe harbor, a violation of the statute may occur even if only one purpose of a payment arrangement is to induce patient referrals or purchases.

Among the practices that have been identified by the OIG as potentially improper under the statute are certain “product conversion” or “switching” programs in which benefits are given by drug manufacturers to pharmacists or physicians for changing a prescription (or recommending or requesting such a change) from one drug to another.

Anti-kickback laws have been cited as a partial basis, along with state consumer protection laws discussed below, for investigations and multi-state settlements relating to financial incentives provided by drug manufacturers to retail pharmacies about such programs.

Several states also have enacted anti-kickback laws that sometimes apply not only to state-sponsored healthcare programs but also to items or services that are paid for by private insurance and self-pay patients.

State anti-kickback laws can vary considerably in their applicability and scope and sometimes have fewer statutory and regulatory exceptions than federal law.

Management understands the importance of anti-kickback laws and has helped structure our operations in a manner believed to be compliant with these laws.

The Stark Laws .

The federal self-referral law, commonly known as the “Stark Law”, prohibits physicians from referring Medicare or Medicaid patients for “designated health services” (which include, among other things, outpatient prescription drugs, durable medical equipment and supplies and home health services) to an entity with which the physician, or an immediate family member of the physician, has a direct or indirect financial relationship, unless the financial relationship is structured to meet an applicable exception.

Several states have enacted laws similar to the Stark Law.

These state laws may cover all, not just Medicare and Medicaid, patients and exceptions or safe harbors may vary from the Stark Law and vary significantly from state to state.

Many federal healthcare reform proposals in the past few years have attempted to expand the Stark Law to cover all patients as well.

Possible penalties for violation of the Stark Law include denial of payment, refund of amounts collected in violation of the statute, civil monetary penalties, and program exclusion.

Noncompliance with the Stark Law could adversely affect our financial results and operations.

Statutes Prohibiting False Claims and Fraudulent Billing Activities .

A range of federal civil and criminal laws target false claims and fraudulent billing activities.

One of the most significant is the federal False Claims Act (the “False Claims Act”), which imposes civil penalties for knowingly making or causing to be made false claims to secure a reimbursement from government-sponsored programs, such as Medicare and Medicaid.

Investigations or actions commenced under the False Claims Act may be brought either by the government or by private individuals on behalf of the government, through a “whistleblower” or “qui tam” action.

The False Claims Act authorizes the payment of a portion of any recovery to the individual suing.

Such actions are initially required to be filed under seal pending their review by the Department of Justice.

If the government intervenes in the lawsuit and prevails, the whistleblower (or plaintiff filing the initial complaint) may share with the federal government in any settlement or judgment.

If the government does not intervene in the lawsuit, the whistleblower plaintiff may pursue the action independently.

The False Claims Act generally provides for the imposition of civil penalties and for treble damages, resulting in the possibility of substantial financial penalties for small billing errors that are replicated in many claims, as each individual claim could be deemed to be a separate violation of the False Claims Act.

Some states also have enacted statutes like the False Claims Act which may include criminal penalties, substantial fines, and treble damages.

In recent years, federal and state governments have launched several initiatives aimed at uncovering practices that violate false claims or fraudulent billing laws.

Under Section 1909 of the Social Security Act, if a state false claim act meets certain requirements as determined by the OIG in consultation with the U.S.

Attorney General, the state is entitled to an increase of ten percentage points in the state medical assistance percentage with respect to any amounts recovered under a state action brought under such a law.

Some of the larger states in terms of population that have had the OIG review such laws include California, Florida, Illinois, Indiana, Massachusetts, Michigan, Nevada, Tennessee and Texas.

We operate in several of these states and submit claims for Medicaid reimbursement to the respective state Medicaid agency.

This legislation has led to increased auditing activities by state healthcare regulators.

As such, we have been the subject of an increased number of audits.

While we believe that we are following Medicaid and Medicare billing rules and requirements, there can be no assurance that regulators would agree with the methodology employed by us in billing for our products and services and a material disagreement between us and these governmental agencies on the way we provide products or services could have a material adverse effect on our business and operations, our financial position, and our results of operations.

The False Claims Act also has been used by the federal government and private whistleblowers to bring enforcement actions under so-called “fraud and abuse” laws like the federal anti-kickback statute and the Stark Law.

Such actions are not based on a contention that an entity has submitted claims that are facially invalid.

Instead, such actions are based on the theory that when an entity submits a claim, it either expressly or impliedly certifies that it has provided the underlying services in compliance with applicable laws, and therefore that services provided and billed for during an anti-kickback statute or Stark Law violation result in false claims, even if such claims are billed accurately for appropriate and medically necessary services.

The availability of the False Claims Act to enforce alleged fraud and abuse violations has increased the potential for such actions to be brought, and which often are costly and time-consuming to defend.

Confidentiality and Privacy .

Most of our activities involve the receipt, use and disclosure of confidential medical, pharmacy or other health-related information concerning individual members, including the disclosure of the confidential information to the member’s health benefit plan.

On April 14, 2003, the final regulations issued by HHS, regarding the privacy of individually identifiable health information (the “Privacy Regulations”) pursuant to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) took effect.

The Privacy Regulations are designed to protect the medical information of a healthcare patient or health plan enrollee that could be used to identify the individual.

The requirements imposed by the Privacy Regulations, the Transactions Standards, and the Security Standards are extensive and can require substantial cost and effort to assess and implement.

We have taken and will continue to take steps that we believe are reasonable to ensure that our policies and procedures are following the Privacy Regulations, the Transactions Standards, and the Security Standards.

The requirements imposed by HIPAA have increased our burden and costs of regulatory compliance, altered our reporting to Plan Sponsors and reduced the amount of information we can use or disclose if members do not authorize such uses or disclosures.

Medicare Part D .

The Medicare Part D program, which makes prescription drug coverage available to eligible Medicare beneficiaries, regulates various aspects of the provision of Medicare drug coverage, including enrollment, formularies, pharmacy networks, marketing, and claims processing.

The Centers for Medicare & Medicaid Services (“CMS”) imposed restrictions and consent requirements for automatic prescription delivery programs, and further limited the circumstances under which Medicare Part D plans may recoup payments to pharmacies for claims that are subsequently determined not payable under Medicare Part D.

CMS sanctions for non-compliance may include suspension of enrollment and even termination from the program.

The Medicare Part D program has undergone significant legislative and regulatory changes since its inception.

Medicare Part D continues to attract a high degree of legislative and regulatory scrutiny, and applicable government rules and regulations continue to evolve.

For example, CMS may issue regulations that limit the ability of Medicare Part D plans to establish preferred pharmacy networks.

Any Willing Provider Statutes and Narrow Networks .

Any Willing Provider (“AWP”) statutes are laws that require health insurance carriers to permit providers to join those networks so long as the provider is willing to accept the terms and conditions of that carrier’s plan.

Numerous states have some form of AWP law, though nearly all prohibit insurance carriers from limiting membership within their provider networks based on geography or other characteristics.

The laws in each state addressing the legality of narrow networks vary widely.

Some laws address plans only while other laws address non-insurers, like a PBM.

Some laws address all types of health benefits while other laws only address a single type of benefit, like pharmacy.

The risk to a pharmacy would be in those states that do not have an applicable AWP statute, a provider can be excluded from a narrow network.

While the offering of narrow and preferred networks is common across the country, there have been many lawsuits challenging the use of these type of arrangements due to the fact that they exclude certain providers from participating.

The outcome of the challenges has varied, primarily based upon the interpretation of the state laws under which the challenges are made.

This is an evolving area of law.

Given the intense scrutiny of drug pricing and arrangements, and the ongoing lawsuits that are being filed in response to narrow networks, there remains risk in developing narrow networks, which will vary by state, depending on each state’s laws and legal precedent.

Additionally, state laws are subject to change at any time, resulting in uncertainty for pharmacy operations in a given state.

Health Reform Legislation .

Congress passed major health reform legislation, including the Patient Protection and Affordable Care Act (“ACA”), as amended by the Healthcare and Education Reconciliation Act of 2010 (the “Health Reform Laws”), which enacted a number of significant healthcare reforms.

There have been executive, judicial, and Congressional challenges to certain aspects of the Health Reform Laws.

For instance, the Tax Cuts and Jobs Act of 2017 included a provision that repealed the tax-based shared responsibility payment imposed by the Health Reform Laws on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” On June 17, 2021, the Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.

Further, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.

The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program.

It is possible that the ACA will be subject to judicial or Congressional challenges in the future.

It is unclear how any such challenges and the healthcare reform measures of the Biden administration will impact the ACA and our business.

Costs and Effects of Compliance with Environmental Laws

Not applicable.

As of December 31, 2023, we had 142 full-time employees and 24 part-time employee.

Sources and Availability of Components and Raw Materials

Certain materials and equipment for our products are custom-made for those products and are dependent upon either a single or limited number of suppliers.

A supplier failure could cause delays in product delivery if another supplier cannot be found promptly, or if the quality of such replacement supplier’s components is inferior or unacceptable.

As a result of COVID-19 and related supply chain constraints, we have experienced shortages in inventory due to manufacturing and logistical issues.

We obtain pharmaceutical and other products from wholesale drug distributors.

We have maintained a relationship with a primary supplier that accounted for 98% of pharmaceutical purchases for the six months ended December 31, 2023, and several supplementary suppliers.

Our primary supplier for the years ended December 31, 2023 was McKesson.

The loss of a supplier could adversely affect our business if alternate sources of drug supply are unavailable.

We believe that our relationships with our suppliers, overall, are good, and that there are alternative suppliers in the marketplace.

Our Risks and History of Losses

Our ability to achieve our mission and execute our strategies is subject to certain challenges, risks and uncertainties, including, among others:

Our ability to obtain sufficient funding to expand our business and respond to business opportunities

Our ability to acquire new customers or retain existing customers in a cost-effective manner

Our ability to successfully improve our production efficiencies and economies of scale

Our ability to manage our supply chain to continue to satisfy our future operation needs

Our ability to retain our market share in our industry

We have incurred net losses since our inception.

For the years ended December 31, 2023, and 2022, we have incurred net losses of approximately $12.4 million and $9.2 million, respectively.

As of December 31, 2023, we had an accumulated deficit of approximately $34.9 million.

We expect to incur additional losses prior to recording sufficient revenue from our operations as a result of the costs associated with expanding and seeking additional sources of revenue to our current revenue base.

Corporate Information

NextPlat Corp, formerly Orbsat Corp, is a Nevada corporation and was originally incorporated in Florida in 1997.

Our headquarters and principal executive offices are located at 3250 Mary St., Suite 410, Coconut Grove, FL 33133.

Our telephone number is (305) 560-5355, and our corporate website is www.nextplat.com .

Unless the context requires otherwise, in this report the terms “the Company,” “we,” “us,” and, “our” refer to NextPlat and our wholly owned subsidiaries.

Available Information

We file annual, quarterly and current reports, proxy statements and other information with the SEC.

The SEC also maintains an Internet site that contains annual, quarterly and current reports, proxy and information statements and other information that we (together with other issuers) file electronically.

The SEC’s Internet site is www.sec.gov.

We make available free of charge on or through our website our annual, quarterly and current reports and amendments to those reports as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC.

The contents of our website or any other website are not incorporated by reference into this Annual Report on Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business