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Item 9A. Controls and Procedures

2025-03-24 compared with 2024-04-11 · 564 added, 1471 removed, 1116 unchanged (65% of the section changed)

CONTROLS AND PROCEDURES

Management ’ s Conclusions Regarding Effectiveness of Disclosure Controls and Procedures

Evaluation of disclosure controls and procedures.

(a) Evaluation of Disclosure Controls and Procedures.

Based on management’s evaluation (with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO)), as of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures (as defined in Rules 13a-15I and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Inherent Limitations on Controls.

(b) Inherent Limitation on Controls.

Management, including the CEO and CFO, does not expect that our disclosure controls and procedures will prevent or detect all errors and fraud.

2 unchanged sentences

The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Management ’ s Report on Internal Control over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934.

5 unchanged sentences

Our internal control over financial reporting is a process designed with the participation of our principal executive officer and principal financial officer or persons performing similar functions to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023.

In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).

Based on this assessment our management believes that, as of December 31, 2023, our internal control over financial reporting is effective under those criteria.

Changes in internal control over financial reporting.

There has been no change in our internal control over financial reporting during our fourth fiscal quarter ended December 31, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Material Weakness in Internal Control Over Financial Reporting

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013).

Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective at the reasonable assurance level as of December 31, 2024 because of the material weakness described below.

A material weakness is a deficiency or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

In connection with our preparation of the consolidated financial statements, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting as of December 31, 2024, related to the valuation of our inventories.

The Company did not have sufficient controls in place to assess whether inventory was recorded at the lower of cost or net realizable value (“NRV”), as required by U.S.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our consolidated financial statements.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

Management is committed to improving its internal control over financial reporting and remediating the material weakness described above as quickly as possible.

Management has outlined a remediation plan to ensure that the control deficiency is remediated.

Management’s remediation plan includes the following:

a.) implementing formalized policies and procedures to perform comprehensive NRV assessments for inventory at each reporting period;

b.) establishing a review process requiring senior management oversight to ensure NRV calculations are accurate and appropriately documented;

and c.) enhancing the accuracy of pricing and cost data used in NRV calculations by integrating reliable internal tracking mechanisms.

We believe that the foregoing measures will remediate the identified material weakness, although management is continuing to assess the need for any additional steps to remediate the underlying causes that gave rise to the material weakness.

The material weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time.

There is no assurance that additional remedial steps will not be necessary.

We anticipate the remediation of the material weakness will be fully implemented and validated by the end of the second quarter of 2025.

Notwithstanding the conclusion by our management that our controls and procedures as of December 31, 2024 were not effective, as described above with respect to inventory valuation, management believes that the consolidated financial statements and related financial information included in this Annual Report on Form 10-K fairly present in all material respects our financial position, results of operations and cash flows as of and for the years then ended, in conformity with U.S.

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules from the SEC that permit us to provide only management’s report in this annual report.

Progressive Care became a consolidated subsidiary of the Company on July 1, 2023.

As permitted by guidance issued by the SEC, companies are allowed to exclude certain acquisitions from their assessment of internal control over financial reporting during the first year following an acquisition.

Accordingly, Management’s Report on Internal Control over Financial Reporting excludes Progressive Care from management’s assessment of the Company’s internal control over financial reporting as of December 31, 2023.

The Progressive Care acquisition represented approximately 63% of total consolidated assets at December 31, 2023 and approximately 71% of our total consolidated revenue for the year ended December 31, 2023.

(d) Changes in Internal Control Over Financial Reporting.

There has been no change in our internal control over financial reporting during our fourth fiscal quarter ended December 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

1 unchanged sentence

During the three months ended December 31, 2024 , no director or officer of the Company adopted or terminated any “Rule 10b5 - 1 trading arrangement” or “non-Rule 10b5 - 1 trading arrangement,” as each term is defined in Item 408 (a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

DISCLOSURE REGARDING FOREIGN JURISDICATIONS THAT PREVENT INSPECTIONS

Not applicable.

Directors , Executive Officers and Corporate Governance.

The following table sets forth the names and ages of all of our directors and executive officers as of March 26, 2024.

Our officers are appointed by, and serve at the pleasure of, the Board.

Executive Chairman, Chief Executive Officer, Director

Cecile Munnik

Chief Financial Officer

Robert Bedwell

Chief Compliance Officer

President and Chief Executive Officer of Global Operations, Director

Vice Chairman and Chief Business Development Strategist, Director

Rodney Barreto

Hector Delgado

Louis Cusimano

Maria Cristina Fernandez

Fernandez , Executive Chairman, Chief Executive Officer, Director

Fernandez has served as Executive Chairman of the Company since May 28, 2021 and Chief Executive Officer of the Company since June 2, 2021.

Prior to joining the Company Mr.

Fernandez was a co-founder and the Chairman of Kempstar (a large-scale marketer of energy and agricultural commodities) from November 2015 through June 2020;

a member of the Supervisory Board of Smartrac (a RFID products and IoT solutions) from January 2019 through March 2020;

Chief Executive Officer of eApeiron Solutions (a brand protection and e-commerce company) from June 2016 through December 2018;

served as the founder and Chief Investment Officer of Barnstar Funds, LP (a fund established in 2012 for investment in special situations across the capital markets) from October 2012 through March 2016;

and co-founder and Chairman of Lakeview Health Systems, LLC (a private pay, specialized hospital company) from December 2003 through December 2012.

Fernandez was chosen to serve as a director of the Company based on his 30 years’ experience identifying profitable start-up and dislocation opportunities, building significant value and executing both private and public exit strategies.

Cecile Munnik, Chief Financial Officer

Munnik has served as Chief Financial Officer of the Company since November 14, 2022.

Munnik also serves as Chief Financial Officer of Progressive Care, a position she has held since October 2020.

Munnik has over fifteen years of accounting and finance experience, and has served in finance and accounting leadership positions for companies and business units with annual revenues ranging from $100M to $3B.

Prior to joining Progressive Care, Ms.

Munnik served as Director of Asset Management at Unified Women’s Healthcare, a single-specialty management services organization to support Ob-Gyn practices from November 2018 through April 2020.

She joined The Service Companies as Director of Finance in May 2017 through October 2018.

Prior to The Service Companies, she worked at Lennox International for eleven years.

She joined Lennox in June 2006 as Sr.

Internal Auditor and left in May 2017 as Manager of Financial Planning and Analysis.

Munnik has a bachelor’s degree in accounting from the University of Pretoria (South Africa) and is a Certified Public Accountant (CPA) and Chartered Accountant (CA).

She serves on the board of Damascus Road Partners, which is a group of social enterprise investors who invest charitable capital to sustainably address human suffering.

We believe Ms.

Munnik is well-qualified to serve as Chief Financial Officer of the Company based on her extensive accounting and finance experience, serving for more than fifteen years in finance and accounting leadership positions for companies and business units.

Robert Bedwell, Chief Compliance Officer

Bedwell has served as Chief Compliance Officer of the Company since November 7, 2022.

Prior to joining the Company, Mr.

Bedwell served as Director of Administrative Services at Progressive Care, from October 2020 to the present, where he worked on contractual, legal, and compliance matters, and as their Controller from January 2017 until September 2020.

From 2011 to 2016, Mr.

Bedwell served as an Audit Partner or Director at several national and regional public accounting firms.

Bedwell has also been a national speaker and instructor on numerous topics for Surgent Professional Education, the Florida Institute of Certified Public Accountants, and the American Institute of Certified Public Accountants.

Bedwell holds a bachelor’s degree in Accounting and Finance from Upsala College in East Orange, New Jersey, and a Masters in Accounting from Florida Atlantic University.

Bedwell is also a Certified Public Accountant.

We believe Mr.

Bedwell is well-qualified to serve as Chief Compliance Officer of the Company based on his more than forty-two years of audit, accounting, financial reporting, and compliance experience.

David Phipps, President and Chief Executive Officer of Global Operations and Director

Phipps has served as Chief Executive Officer of Global Operations since June 2, 2021, and as Director since February 24, 2015.

Phipps has also served as Managing Director of the Company’s wholly owned UK subsidiary, Global Telesat Communications LTD (“GTC”), since 2008.

Phipps previously served as Chairman of the Board from February 24, 2015 until June 2, 2021, and Chief Executive Officer from February 25, 2015 until June 2, 2021.

Phipps has over twenty years of experience in the communications industry, during which time he has overseen acquisitions, mergers and capital raising activities.

Phipps also has 35 years of experience in investment management, finance, and operational roles at several private and public companies.

We believe Mr.

Phipps is well-qualified to serve as President and Chief Executive Officer of Global Operations and Director of the Company based on his depth of knowledge and experience in the communications industry.

Ellenoff, Vice Chairman and Chief Business Development Strategist and Director

Ellenoff has served as Vice Chairman and Chief Business Development Strategist of the Company since August 24, 2021.

Ellenoff is a partner at Ellenoff Grossman, & Schole LLP, a law firm based in New York City with more than 120 professionals, which he founded in 1992.

Ellenoff’s practice is concentrated in corporate and securities, with a focus in business transactions, mergers and acquisitions, and corporate financings.

Ellenoff has represented companies in connection with their initial public offerings, secondary public offerings, PIPEs, crowdfunding, regulatory compliance, as well as strategic initiatives and general corporate governance matters.

Ellenoff has also served as Managing Member at ESQVest LLP, a venture capital firm that invests in early-stage legal technology companies, since its founding in 2014.

We believe Mr.

Ellenoff is well-qualified to serve as Vice Chairman and Chief Business Development Strategist of the Company based on his broad experience in capital markets and corporate governance matters.

Rodney Barreto, Director

Barreto has served on the Board of Directors since January 20, 2022.

He is currently President and Chief Executive Officer of the Barreto Group and of Barreto Hospitality, which he founded in 1988 and 2020, respectively.

The Barreto Group is a diversified company specializing in corporate and public affairs consulting, real estate investment, and development.

Barreto Hospitality is the food, beverage, and hospitality arm of the Barreto Group boasting fine dining and entertainment venues across South Florida.

Barreto is also a partner of Capital City Consulting Miami, LLC, a leading public affairs and governmental consulting firm in the State of Florida.

Capital City Consulting develops and manages effective corporate and public affairs strategies designed to achieve specific business results for its clients.

Barreto is also the Chief Executive Officer of Barreto Capital, LLC, a private money lender, since November 2018.

Barreto is also the Chairman of the Miami Super Bowl Host Committee, which he has chaired a record three times in the years 2007, 2010, and 2020.

The perennial Chairman, Mr.

Barreto also serves as Chairman of the Florida Fish and Wildlife Conservation Commission having been appointed by three Florida Governors, namely Governor Jeb Bush, Governor Charlie Crist, and current Florida Governor Ron DeSantis.

We believe Mr.

Barreto is well-qualified to serve as a director of the Company based on his significant leadership and entrepreneurial experience.

Hector Delgado , Director

Delgado has served on the Board of Directors since May 27, 2015.

Lieutenant Commander Delgado is a retired United States Navy SEAL, with over twenty-nine years of active and reserve service.

In 2006, he was mobilized with SEAL Team THREE for a combat tour in Ramadi, Iraq, receiving a Navy Commendation Medal with Combat “V”.

He has served with SEAL Teams TWO, THREE, FOUR, EIGHTEEN and Special Operations Command Central and South.

His tours of duty have included the Middle East, Europe, Africa and South America.

Delgado has a wealth of expertise that has been refined not only in a military environment, but also extensively in the governmental sector, where he has been responsible for budgets, training, and logistics for thousands of people.

He has trained thousands of students in the use of weapons, demolition, physical security and executive protection.

Delgado is also a retired Special Agent with Homeland Security Investigations (HSI), Palm Beach County, Florida.

Throughout his career, Special Agent Delgado served in a number of positions including being a member of the Joint Terrorism Task Force (JTTF), Miami field office.

Over the past fifteen years Mr.

Delgado has conducted Active Shooter Response Training seminars around the country and is recognized as an expert in this field.

He has served on Governor DeSantis’s Committee on Public Safety during the Governor’s transition.

Delgado is also a successful entrepreneur and patent holder, having started, managed, and sold numerous enterprises.

He is co-founder of ASR Alert Systems, a newly developed technology designed to drastically enhance response time of law enforcement and victims in an active shooter event.

The ASR Threat Alert System simultaneously alerts law enforcement, end users of the system, 911-disptach, and nearest trauma hospitals within seconds.

Delgado’s core values of honesty, integrity, and generosity are what have helped propel him to his current success.

These same qualities inspire him to give back to the communities in which he resides.

He mentors teenagers who make career decisions to enlist in the military and he sits on the Naval Academy selection board on behalf of Senator Marco Rubio.

As a member of the Board of Directors of the National Navy SEAL Museum, Mr.

Delgado plays an instrumental role in the Museum’s continued growth and development.

Carpenter, Director

Carpenter has served on the Board of Directors since May 28, 2021.

From 2006 to 2019, Ms.

Carpenter was Chief Financial Officer, Executive Vice-President, Secretary, and Treasurer of ComSovereign Holding Corp.

(COMS) and its predecessor entities, a Nasdaq company in the aviation industry, where she was responsible for SEC compliance and reporting, accounting, audit, banking, HR and benefits, payroll, corporate administration, board governance, legal, contracts, and risk management.

Carpenter holds a bachelor’s degree in Accounting from Oklahoma State University, and a Certified Public Accountant (CPA) license (inactive) in the State of Oklahoma.

Carpenter is also a Certified Management Accountant (CMA) and Chartered Global Management Accountant (CGMA).

We believe Ms.

Carpenter is well-qualified to serve as a director of the Company based on her leadership positions in public companies, as well as her expertise in compliance and finance.

Louis Cusimano , Director

Cusimano has served on the Board of Directors since May 28, 2021.

Cusimano’s dual career with the Federal Aviation Administration (FAA) and the United States Air Force Reserve (USAF) spanned three decades of continuous service.

Prior to retiring from the FAA in May 2003, Mr.

Cusimano was a Senior Executive and Deputy Director of the FAA’s Flight Standards Service.

In this role, Mr.

Cusimano maintained close and continuous liaison with representatives of Congress, the aviation industry, the general public, all air carriers, the national military establishment, other federal agencies, foreign flight operations, and airworthiness authorities.

Cusimano also served as “Acting Director” and Division Manager of the Air Transportation Division and Certification and Surveillance Division at the FAA.

Cusimano also had a parallel career as an Air Force officer and pilot for 30 years.

Cusimano attained the rank of full colonel, and retired as Wing Commander, 459 th Airlift Wing.

Cusimano was a senior ranking officer in charge of over 1,400 reservists and nine C-141B/C strategic airlift aircraft, which conducted world-wide combat airlift and airlift support missions for the Air Mobility Command.

Cusimano is a highly decorated officer and retired with honors on June 1, 2000.

Cusimano holds an airline transport pilot certificate, flight engineer certificate, and flight instructor certificate with fixed wing, rotorcraft, and instrument instructor ratings.

Cusimano is also a certified A&P Mechanic with Inspector Authorization authority.

Cusimano earned a bachelor’s degree in Experimental Psychology from Hofstra University in 1969 and completed National Security Management School in 1987.

Cusimano has held top secret clearances at the FAA and with the Air Force.

Cusimano is certified as an ISO-9000:2000 Auditor with the International Register of Certificated Auditors.

We believe Mr.

Cusimano is well-qualified to serve as a director of the Company based on his more than thirty-five years of experience in government and professional roles.

Miller, Director

Miller has served on the Board of Directors since May 28, 2021.

Miller has served as the owner/consultant at Miller Analytics, LLC since September 2007.

From December 2017 to November 2019, Mr.

Miller served as a member of the board of directors of Drone Aviation Holding Corp.

Prior to this, Mr.

Miller served over thirty-four years in the US Army.

Commissioned as an Infantry Officer, he served in line units, staff positions, and Army Schools, and attained the title of Lieutenant General before retiring.

Miller had multiple assignments at the US Army Command and General Staff College, where he taught Tactics and Wargaming Instructor and served as the Deputy Commandant, and later Commandant.

Miller holds a bachelor’s degree in Mathematics from Missouri State University and a master’s degree in Operations Research from Georgia Tech.

Miller is also a graduate of the Army Command and General Staff College and the Army War College.

Miller attended Executive Development programs at Yale University, the Menninger Foundation and Leadership at the Peak in Denver, CO.

We believe Mr.

Miller is well-qualified to serve as a director of the Company based on his leadership, knowledge of, and relationships in aerospace industries, as well as his familiarity with the military and governmental agencies.

Maria Cristina Fernandez, Director

Fernandez was appointed to the Board of Directors on September 28, 2022.

Fernandez has extensive experience in achieving growth with new technologies, and motivating teams and customers in challenging business environments.

She also has extensive international experience leading global and regional teams in the US, Latin America and Asia.

Prior to joining NextPlat, Ms.

Fernandez served as the Executive Vice President and Chief Operating Officer of eApeiron Solutions from May 2016 to July 2019 .

Before that, Ms.

Fernandez served as the Global Vice President/General Manager of Xerox Corporation’s Continuous Feed Inkjet Business, from July 2015 to May 2016.

No director is related to any other director or executive officer of our company or our subsidiaries, and, there are no arrangements or understandings between a director and any other person pursuant to which such person was elected as director.

Involvement in Certain Legal Proceedings

During the past ten years, none of our officers, directors, promoters or control persons have been involved in any legal proceedings as described in Item 401(f) of Regulation S-K.

Delinquent Section 16(a) Reports

Based solely upon a review of reports on Forms 3, 4 and 5 and any amendments thereto furnished to the Company pursuant to Section 16 of the Exchange Act, the Company believes that each of the following reporting persons failed to timely file a Section 16(a) report during the fiscal year ended December 31, 2023:

Number of Late Reports

Number of Transactions that were Not Reported on a Timely Basis

Maria Cristina Fernandez

Louis Cusimano

Hector Delgado

Code of Business Conduct and Ethics

The Board has adopted a Code of Business Conduct and Ethics that is applicable to the Company and to all our directors and officers and persons performing similar functions, including our principal executive officer and principal financial officer.

A copy of the Company’s Code of Ethics may be obtained on our website at www.NextPlat.com.

We intend to disclose future amendments to such code, or any waivers of its requirements, applicable to any principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions or our directors on our website identified above.

The inclusion of our website address in this Annual Report on Form 10-K does not include or incorporate by reference the information on our website into this Annual Report on Form 10-K.

Audit Committee of the Board of Directors

The members of the Audit Committee are Rodney Barreto, Maria Cristina Fernandez, and Louis Cusimano.

Each member of the Audit Committee is independent as defined by the Nasdaq Rules.

Rodney Barreto is the Chairperson of the Audit Committee.

In addition, each member of the Audit Committee satisfies the additional requirements of the SEC and Nasdaq Rules for audit committee membership, including the additional independence requirements and the financial literacy requirements.

The Board has determined that at least one member of the Audit Committee, Mr.

Barreto, is an “audit committee financial expert” as defined in the SEC’s rules and regulations.

The primary purpose of the Audit Committee is to oversee the quality and integrity of our accounting and financial reporting processes and the audit of our financial statements.

The Audit Committee is responsible for selecting, compensating, overseeing and terminating the selection of our independent registered public accounting firm.

DIRECTORS, EXECUTIVE OFFICES AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference to our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2024.

Our Board of Directors has adopted a written Code of Conduct and Ethics applicable to all officers, directors and employees, which is available on our website (www.nextplat.com) under “Governance Documents” within the “Corporate Governance” section.

We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of this Code and by posting such information on the website address and location specified above.

EXECUTIVE COMPENSATION

Executive Officer Compensation

Our named executive officers for the years ended December 31, 2023 and 2022, which consist of our principal executive officer and our two other most highly compensated executive officers, are:

(i) Charles M.

Fernandez, our chief executive officer and executive chairman;

(ii) David Phipps, our president and chief executive officer of global operations, and (iii) Douglas Ellenoff, our vice chairman and chief business development strategist.

Summary Compensation Table

The table below summarizes all compensation awarded to, earned by, or paid to our named executive officers (as defined in Item 402(m)(2) of Regulation S-K) for the fiscal years ended December 31, 2023 and December 31, 2022.

Name and Principal Position

Stock Awards ($)(2)

Option Awards ($)(2)

Non-Equity Incentive Plan Compensation ($)

Nonqualified Deferred Compensation Earnings($)

All Other Compensation ($)(3)

Fernandez Chief Executive Officer and Chairman (3)(4)

David Phipps President of NextPlat and Chief Executive Officer of Global Operations.

Former* Chief Executive Officer and Chairman of NextPlat (3)(5)

Douglas Ellenoff Vice Chairman and Chief Business Development Strategist (6)

*For information regarding the Company’s current executive officers is provided above in the section entitled “ Information About Directors and Executive Officers .”

On October 7, 2021, on the approval and recommendation of the Compensation Committee, the Board approved a plan to make bonus payments of $3,000 per month (each, a “Monthly Bonus”) to each of Mr.

Fernandez and Mr.

The Monthly Bonus payments were approved in recognition of Messrs.

Fernandez’s and Phipps’ contributions to the Company.

The Monthly Bonus payments will renew on a quarterly basis until terminated by the Board upon 30 days’ prior notice to Messrs.

Fernandez and Phipps.

Amounts shown in the “Stock Awards” and “Option Awards” column reflect the aggregate grant date fair value calculated in accordance with FASB ASC 718 for the respective fiscal year with respect to stock options granted to our named executive officers.

Amounts reflect our accounting for these option grants and do not necessarily correspond to the actual values that may be realized by our named executive officers.

The grant date fair values of these option grants were calculated at the grant date using the Black-Scholes option pricing model.

The assumptions used for the valuations are set forth in Note 20 – Stock-Based Compensation in the Notes included in the Annual Report.

Pursuant to SEC rules, we disregarded the estimates of forfeitures related to service-based vesting conditions.

Categories and values of compensation reported in “All Other Compensation” are set forth in the following table:

Health Insurance Coverage ($)

Automobile Allowance ($)

Allowance Towards Professional Fees ($)

Allowance Towards Travel Fees ($)

Board of Director Compensation ($)

Douglas Ellenoff

Fernandez has served as the Company’s Executive Chairman since May 28, 2021 and its Chief Executive Officer since June 5, 2021.

Phipps served as the President of the Company since February 19, 2015 and as a member of the Board since February 24, 2015, and Chairman of the Board from February 24, 2015 until May 23, 2021 and Chief Executive Officer of the Company from February 25, 2015 to June 5, 2021.

Fernandez received the following equity awards in 2023:

Award of 39,000 shares of restricted common stock of the Company on February 28, 2023.

All shares were fully vested and issued on the grant date.

Award of 325,000 shares of restricted common stock of the Company on April 3, 2023.

All shares were fully vested an issued on the grant date.

Award of options to purchase 200,000 shares of common stock of the Company on April 14, 2023 at an exercise price of $2.45 per share.

The option has a five year term and was fully vested upon the grant date.

Fernandez received the following equity awards in 2022:

Issuance of 200,000 shares of restricted common stock of the Company pursuant to Mr.

Fernandez’s Employment Agreement (“the June Agreement”).

All shares were fully vested and issued on the Effective Vesting Date, which was May 28, 2022.

Award of 116,000 shares of restricted common stock of the Company under the 2021 Plan.

All shares were fully vested and issued on the Effective Grant Date, which was September 20,2022.

Award of an option under the 2021 Plan to buy 70,000 shares of Company common stock at an exercise price of $2.13 per share.

The option fully vested on July 1, 2022.The option has a term of 10 years.

Fernandez received an additional cash bonus of $250,000 in 2023.

Ellenoff received the following equity awards pursuant to his Employment Agreement, dated August 24, 2021, by and between the Company and Mr.

Ellenoff (the “Ellenoff Employment Agreement”),

Under the terms of the Ellenoff Employment Agreement, Mr.

Ellenoff was awarded, in lieu of cash compensation:

(i) a restricted stock award of 100,000 shares of Common Stock of the Company, 40,000 of which were issued on September 9, 2021, and vested immediately, with an additional 20,000 shares of restricted stock to be issued and to vest on each of August 24, 2022, August 24, 2023 and August 24, 2024, provided Mr.

Ellenoff continues to serve on the Board of Directors at any time during the year in which the restricted stock is to vest, (ii) options to purchase a total of 1,500,000 shares of the Company’s Common Stock, 300,000 of which were vested immediately, 150,000 of which will vest on each of the next three annual anniversaries of the commencement of his employment, and the remaining 750,000 of which will vest at the rate of 250,000 per year on each of the first three anniversaries of the commencement of his employment if during each such year Mr.

Ellenoff introduces the Company to twelve (12) or more potential Business Transactions (as defined in the Ellenoff Agreement and which transactions need not be consummated);

provided that the Company’s Chief Executive Officer may, in his sole discretion, waive the vesting requirement in any given year.

Such options will have an exercise price of $5.35 per share and will terminate 5 years after they vest.

These equity awards to Mr.

Ellenoff were material to induce Mr.

Ellenoff to enter into the Ellenoff Agreement and were issued outside of a shareholder approved stock or option plan pursuant to the Nasdaq “inducement grant” exception (Nasdaq Listing Rule 5635I(4)).

Narrative to Summary Compensation Table

Annual Base Salary

The terms of Mr.

Phipps compensation are set forth in his Employment Agreement, dated June 5, 2021, which was effective June 2, 2021 (as amended, the “2021 Phipps Agreement”), which sets Mr.

Phipps’ annual base compensation at $350,000.

The terms of Mr.

Fernandez’s compensation are set forth in his Employment Agreement, dated June 2, 2021 (as amended, the “June Agreement”), which sets Mr.

Fernandez’s annual base compensation at $525,000.

The terms of Mr.

Ellenoff’s compensation are set forth in the Ellenoff Employment Agreement which provides for equity compensation in lieu of a base cash compensation arrangement.

The 2021 Phipps Employment Agreement, the June Agreement and the Ellenoff Employment Agreement are described below under the section titled “ Employment Agreements ”.

For the years ended December 31, 2023 and 2022, the Company recorded stock-based compensation of approximately $5.4 million and $3.0 million, respectively.

Long-Term Incentives

2018 Incentive Plan

On June 14, 2018, our Board of Directors approved the 2018 Incentive Plan (the “2018 Plan”).

The purpose of the 2018 Plan is to provide a means for the Company to continue to attract, motivate and retain management, key employees, consultants and other independent contractors, and to provide these individuals with greater incentive for their service to the Company by linking their interests in the Company’s success with those of the Company and its shareholders.

An award may also be granted to any consultant, agent, advisor or independent contractor for bona fide services rendered to the Company or any Related Company (as defined in the 2018 Plan) that;

are not in connection with the offer and sale of the Company’s securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s securities.

The 2018 Plan is administered by the Board or its Compensation Committee and may grant Options designated as Incentive Stock Options or Nonqualified Stock Options.

The 2018 Plan provides that up to a maximum of 13,333 shares of the Company’s common stock (subject to adjustment) are available for issuance under the 2018 Plan.

Subject to earlier termination in accordance with the terms of the 2018 Plan and the instrument evidencing the option, the maximum term of an incentive stock option shall not exceed ten years, and in the case of an incentive stock option granted to a Ten Percent Stockholder (as defined in the 2018 Plan), shall not exceed five years.

Any portion of an option that is not vested and exercisable on the date of a plan participant’s Termination of Service (as defined in the 2018 Plan) shall expire on such date.

In the event of a Change in Control (as defined in the 2018 Plan);

all outstanding awards, other than performance shares and performance units, shall become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, immediately prior to the Change in Control and shall terminate at the effective time of the Change in Control;

provided, however, that with respect to a Change in Control that is a Company Transaction (as defined in the 2018 Plan), such awards shall become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, only if and to the extent such awards are not converted, assumed or replaced by the Successor Company (as defined in the 2018 Plan).

Amended and Restated 2020 Equity Incentive Plan

On August 21, 2020, the Company’s Board of Directors approved and adopted the Company’s 2020 Equity Incentive Plan (the “2020 Plan”) in order to provide a means for the Company to continue to attract, motivate and retain management, key employees, directors and consultants.

On December 31, 2021, the Company’s Board of Directors approved and adopted an amendment that increased the number of shares available for issuance under the 2020 Plan from 450,000 shares to 800,000 shares of the Company’s common stock.

On August 10, 2021, the Company’s Board of Directors further amended the 2020 Plan and adopted and approved an Amended and Restated 2020 Equity Incentive Plan (the “A&R 2020 Plan”), in order to, among other things:

(i) clarify that the exercise price of stock options will be set at “Fair Market Value,” and (ii) make conforming revision to reflect the 1-for-5 reverse split that was effective on May 28, 2021.

The A&R 2020 Plan was approved by the Company’s stockholders on December 16, 2021, at the Company’s 2021 Annual Meeting of Stockholders.

The A&R 2020 Plan provides for discretionary awards of, among others, stock options, stock awards, stock unit awards and stock appreciation rights to participants.

Each award made under the A&R 2020 Plan will be evidenced by a written award agreement specifying the terms and conditions of the award as determined by the Committee in its sole discretion, consistent with the terms of the A&R 2020 Plan.

All employees, directors, and consultants of the Company and its subsidiaries are eligible to receive awards under the A&R 2020 Plan.

The A&R 2020 Plan is administered by the “Committee” which is defined in the A&R 2020 Plan as the Compensation Committee of the Board or such other committee as may be designated by the Board from time to time to administer the Plan, or, if no such committee has been designated at the time of any grants, it shall mean the Board.

The number of shares of common stock that may be issued under the A&R 2020 Plan is 800,000.

Shares issuable under the A&R 2020 Plan may be authorized but unissued shares or treasury shares.

If there is a lapse, forfeiture, expiration, termination or cancellation of any award made under the A&R 2020 Plan for any reason, the shares subject to the award will again be available for issuance.

Any shares subject to an award that are delivered to us by a participant, or withheld by us on behalf of a participant, as payment for an award or payment of withholding taxes due in connection with an award will not again be available for issuance, and all such shares will count toward the number of shares issued under the A&R 2020 Plan.

The number of common shares issuable under the A&R 2020 Plan is subject to adjustment, in the event of any reorganization, recapitalization, stock split, stock distribution, merger, consolidation, split-up, spin-off, combination, subdivision, consolidation or exchange of shares, any change in the capital structure of the company or any similar corporate transaction.

In each case, the Committee has the discretion to make adjustments it deems necessary to preserve the intended benefits under the A&R 2020 Plan.

No award granted under the A&R 2020 Plan may be transferred, except by will, the laws of descent and distribution.

The maximum number of shares subject to Awards granted under the A&R 2020 Plan or otherwise during any one calendar year to any Director for service on the Board (other than to Mr.

Phipps and the Company’s CEO and President, if serving on the Board, to whom no annual limit is applicable), taken together with any cash fees paid by the Company to such Director during such calendar year for service on the Board, will not exceed $100,000 in total value (calculating the value of any such Awards based on the grant date fair value or such value as determined by the Board, at its discretion, of such Awards for financial reporting purposes).

The Committee may amend any award agreement at any time, provided that no amendment may adversely affect the right of any participant under any agreement in any material way without the written consent of the participant, unless such amendment is required by applicable law, regulation or stock exchange rule.

The Board may terminate, suspend or amend the A&R 2020 Plan, in whole or in part, from time to time, without the approval of the shareholders, unless such approval is required by applicable law, regulation or stock exchange rule, and provided that no amendment may adversely affect the right of any participant under any outstanding award in any material way without the written consent of the participant, unless such amendment is required by applicable law, regulation or rule of any stock exchange on which the shares are listed.

Notwithstanding the foregoing, neither the A&R 2020 Plan nor any outstanding award agreement can be amended in a way that results in the repricing of a stock option.

Repricing is broadly defined to include reducing the exercise price of a stock option or cancelling a stock option in exchange for cash, other stock options with a lower exercise price or other stock awards.

No awards may be granted under the A&R 2020 Plan on or after the tenth anniversary of the effective date of the A&R 2020 Plan.

2021 Incentive Award Plan

The Company’s Board of Directors approved and adopted the 2021 Incentive Award Plan (“2021 Plan”), subject to stockholder approval, on August 10, 2021.

The 2021 Plan was approved by the Company’s stockholders on December 16, 2021, at the Company’s 2021 Annual Meeting of Stockholders.

The purpose of the 2021 Plan is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company and its subsidiaries by providing these individuals with equity ownership opportunities.

The number of shares initially available for issuance under awards granted pursuant to the 2021 Plan is 768,819 shares of common stock.

The number of shares initially available for issuance will be increased on January 1 of each calendar year beginning in 2022 and ending in 2031, by an amount equal to the lesser (A) an amount such that the resulting sum (the new “Overall Share Limit”) is equal to 12% of the aggregate number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares of Common Stock as is determined by the Board.

Shares issued under the 2021 Plan may be authorized but unissued shares, shares purchased in the open market or treasury shares.

If an award under the 2021 Plan expires, lapses or is terminated, exchanged for cash, surrendered to an exchange program, repurchased, cancelled without having been fully exercised or forfeited, any shares subject to such award will, as applicable, become or again be available for new grants under the 2021 Plan.

All employees, directors, and consultants of the Company and its subsidiaries are eligible to receive awards under the 2021 Plan.

As of December 31, 2022, eighteen individuals are eligible to receive awards under the 2021 Plan.

The 2021 Plan is generally administered by the Board, which may delegate its duties and responsibilities to committees of Board and or officers of the Company (referred to collectively as the “plan administrator”).

The plan administrator will have the authority to make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the 2021 Plan, subject to its express terms and conditions.

The plan administrator will also set the terms and conditions of all awards under the 2021 Plan, including any vesting and vesting acceleration conditions.

The plan administrator may also institute and determine the terms and conditions of an “exchange program,” which could provide for the surrender or cancellation, transfer, or reduction or increase of exercise price, of outstanding awards, subject to the limitations provided for in the Incentive Award Plan.

The 2021 Plan provides for the grant of stock options, including incentive stock options, or ISOs, and nonqualified stock options, or NSOs;

restricted stock;

dividend equivalents;

restricted stock units, or RSUs;

stock appreciation rights, or SARs;

and other stock or cash-based awards.

All awards under the 2021 Plan will be set forth in award agreements, which will detail the terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations.

Other Stock or Cash Based Awards may be granted to participants, including awards entitling participants to receive Shares to be delivered in the future and including annual or other periodic or long-term cash bonus awards (whether based on specified performance criteria or otherwise), in each case subject to any conditions and limitations in the 2021 Plan.

The plan administrator will determine the terms and conditions of other stock or cash-based awards.

Performance awards include any of the foregoing awards that are granted subject to vesting and/or payment based on the attainment of specified performance goals or other criteria the plan administrator may determine, which may or may not be objectively determinable.

Performance criteria upon which performance goals are established by the plan administrator.

In connection with certain transactions and events affecting the Company’s Common Stock, including a change in control (as defined in the 2021 Plan), or change in any applicable laws or accounting principles, the plan administrator has broad discretion to take action under the 2021 Plan to prevent the dilution or enlargement of intended benefits, facilitate such transaction or event, or give effect to such change in applicable laws or accounting principles.

This includes canceling awards in exchange for either an amount in cash or other property with a value equal to the amount that would have been obtained upon exercise or settlement of the vested portion of such award or realization of the participant’s rights under the vested portion of such award, accelerating the vesting of awards, providing for the assumption or substitution of awards by a successor entity, adjusting the number and type of shares available, replacing awards with other rights or property and/or terminating awards under the 2021 Plan.

Equity Awards

The following table sets forth certain information concerning equity awards for our named executive officers at December 31, 2023.

The market values of the Stock Awards reported in this table are calculated based on the closing market price of the Common Stock on Nasdaq on December 29, 2023, which was $1.65 per share.

Outstanding Equity Awards At Fiscal Year-End

Option Awards

Number of Securities Underlying Unexercised Options(#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards:

Number of Securities Underlying Unexercised Unearned Options (#)

Option Exercise Price ($)\

Option Expiration Date

Number of Shares or Shares of Stock That Have Not Vested (#)

Market Value of Shares or Shares of Stock That Have Not Vested ($)

Equity Incentive Plan Awards:

Number of Unearned Shares, Shares or Other Rights That Have Not Vested (#)

Equity Incentive Plan Awards:

Market or Payout Value of Unearned Shares, Shares or Other Rights That Have Not Vested ($)

Douglas Ellenoff

Options granted outside of the Company’s 2018, 2020 and 2021 Equity Awards Plan.

Employment Agreements

Phipps Employment Agreements

Phipps June 2018 Employment Agreement

On June 14, 2018, the Company entered into a two-year Employment Agreement (“2018 Phipps Agreement”) with Mr.

Phipps, with an automatic one-year extension.

Under the terms of the 2018 Phipps Agreement, Mr.

Phipps served as the Company’s Chief Executive Officer and President and received an annual base salary equal to the sum of $170,000 and £48,000 paid through our operating subsidiary, GTC.

For the years ended December 31, 2019 and 2018, the £48,000 equivalent to USD is $61,293 and $62,219 and the yearly conversion rate is 1.276933 and 1.296229, respectively.

The 2018 Phipps Agreement provided for a performance bonus based on exceeding our annual revenue goals and on our ability to attract new investment.

The Agreement also provided for medical plan coverage, an auto allowance, paid vacation, and discretionary stock grants and option awards.

In the event of termination without cause, termination as a result of a change in control, or resignation with good reason (as defined in the 2018 Phipps Agreement), Mr.

Phipps was entitled to a severance equal to twice his base salary, the immediate vesting of all unvested options, and other benefits.

As described below, the 2018 Phipps Agreement terminated in accordance with its terms on June 14, 2020, and Mr.

Phipps and the Company subsequently entered into a new employment agreement.

On March 13, 2020, the Company and David Phipps executed a waiver of the provisions in his employment agreement requiring prior written notice of non-renewal to the other party.

As a result, his employment terms with the Company were not automatically extended as set forth in his employment agreement and the agreement terminated as of June 14, 2020.

After a series of monthly extensions Mr.

Phipps’ employment agreement was replaced with a new employment agreement on March 11, 2021.

As described in more detail below, on June 5, 2021, the Company entered into a new three-year employment agreement with Mr.

Phipps (the “2021 Phipps Employment Agreement”) that was effective as of June 2, 2021 and that replaced his existing employment agreement.

The 2021 Phipps Employment Agreement set Mr.

Phipps’ annual base compensation at $350,000.

Phipps June 2021 Employment Agreement

On June 5, 2021, the Company entered into a new three-year employment agreement with Mr.

Phipps, the that was effective as of June 2, 2021, also referred to herein as the 2021 Phipps Employment Agreement.

Under the terms of the 2021 Phipps Employment Agreement, Mr.

Phipps will serve as the serve as President of the Company and Chief Executive Officer of Global Operations.

The term will be automatically extended for additional one-year terms thereafter unless terminated by the Company or Mr.

Phipps by written notice.

Phipps’ annual base compensation under the 2021 Phipps Employment Agreement is an aggregate of $350,000.The Company may increase (but not decrease) his compensation during its term.

In addition, Mr.

Phipps will be entitled to receive an annual cash bonus if the Company meets or exceeds criteria adopted by the Compensation Committee of the Board of Directors.

Phipps is also entitled to participate in any other executive compensation plans adopted by the Board of Directors and is eligible for such grants of awards under stock option or other equity incentive plans as the Compensation Committee of the Company may from time to time determine (the “Share Awards”).

Share Awards will be subject to the applicable Plan terms and conditions, provided, however, that Share Awards will be subject to any additional terms and conditions as are provided therein or in any award certificate(s), which shall supersede any conflicting provisions governing Share Awards provided under the equity incentive plan.

The Company is required to pay or to reimburse Mr.

Phipps for all reasonable out-of-pocket expenses actually incurred or paid by Mr.

Phipps in the course of his employment, consistent with the Company’s policy.

Phipps will be entitled to participate in such pension, profit sharing, group insurance, hospitalization, and group health and benefit plans and all other benefits and plans, including perquisites, if any, as the Company provides to its senior employees.

The 2021 Phipps Agreement may be terminated based on death or disability of Mr.

Phipps, for cause or without good reason, for cause or with good reason, and as a result of the change of control of the Company.

The 2021 Phipps Agreement also contains certain provisions that are customary for agreements of this nature, including, without limitation, non-competition and non-solicitation covenants, indemnification provisions, etc.

On August 7, 2021, the 2021 Phipps Agreement was amended in order to, among other things, (i) increase Mr.

Phipps’ compensation to include a car allowance of $1,000 a month and (ii) clarify Mr.

Phipps position to be President of NextPlat Corp and the Chief Executive Officer of Global Operations.

Fernandez Employment Agreements

Fernandez May 2021 Employment Agreement

On May 23, 2021, the Company entered into a three (3) year Employment Agreement (the “May Agreement”) with Mr.

Fernandez to serve as Chairman of the Board.

Such agreement includes provision for automatic one (1) year extensions.

Under the terms of May Agreement, Mr.

Fernandez’s employment commenced on May 28, 2021.

As compensation for services under the May Agreement, Mr.

Fernandez was to receive, in monthly installments during the term, the sum of $12,000 per month.

Fernandez was also be entitled to such cash bonus opportunity and equity compensation arrangements as the Compensation Committee may determine following the effectiveness of this registration statement.

The May Agreement also provided for the Company to reimburse Mr.

Fernandez for any and all premium payments made by him to obtain and continue in full force and effect throughout the entire period of employment for personal catastrophe and disability insurance coverages.

Such insurance was to have premium limits not to exceed one hundred percent (100%) of Mr.

Fernandez’s Base Salary per annum.

In addition, Mr.

Fernandez was entitled to participate in such pension, profit sharing, group insurance, hospitalization, and group health and benefit plans and all other benefits and plans, including perquisites, if any, as the Company provides to its senior executives.

Under the May Agreement, the Company was also obligated to reimburse Mr.

Fernandez for up to $10,000 per year related to Mr.

Fernandez’s business and personal travel and/or that of his immediate family members, as well as up to $10,000 per year for professional fees incurred by Mr.

Fernandez, whether in connection with Mr.

Fernandez’s association with the Company or otherwise.

In connection to the June Offering, which is described above, the Company granted Mr.

Fernandez an award of restricted stock with a grant date fair value equal to $3,000,000 determined at the per unit offering price of $5.00 per unit (the “RSA”), which RSA will vest 1/3 at each of the three anniversaries of the grant date.

Notwithstanding the vesting schedule, full vesting will occur upon a Change in Control, as that term is defined in the RSA.

The Company, at its sole expense, is obligated to register the reoffer and resale by Mr.

Fernandez of the securities granted to Employee pursuant to the RSA.

Fernandez June 2021 Employment Agreement

On June 2, 2021, the Company entered into a new employment agreement (the “June Agreement”) with Charles M.

Fernandez, with an initial term of five (5) years effective on May 28, 2021.

The June Agreement replaced “the May Agreement”.

Under the June Agreement, Mr.

Fernandez will serve as the Chairman and Chief Executive Officer of the Company.

The June Agreement will be automatically extended for additional one-year terms unless terminated by the Company or Mr.

Fernandez by written notice.

Fernandez’s annual base compensation under the June Agreement is $350,000 per year, which was increased to $525,000 per year in April 2023.

The Company may increase (but not decrease) his compensation during the June Agreement’s term.

In addition, Mr.

Fernandez is entitled to receive an annual cash bonus if the Company meets or exceeds criteria adopted by the Compensation Committee of the Board.

Fernandez is also entitled to participate in any other executive compensation plans adopted by the Board and is eligible for such grants of Share Awards.

Share Awards will be subject to the applicable Plan terms and conditions, provided, however, that Share Awards will be subject to any additional terms and conditions as are provided therein or in any award certificate(s), which will supersede any conflicting provisions governing Share Awards provided under the equity incentive plan.

The Company is required to pay or to reimburse Mr.

Fernandez for all reasonable out-of-pocket expenses actually incurred or paid by Mr.

Fernandez in the course of his employment, consistent with the Company’s policy.

Fernandez will also be entitled to participate in such pension, profit sharing, group insurance, hospitalization, and group health and benefit plans and all other benefits and plans, including perquisites, if any, as the Company provides to its senior employees.

The June Agreement may be terminated based on death or disability of Mr.

Fernandez, for cause or without good reason, for cause or with good reason, as a result of the change of control of the Company and at the option of Mr.

Fernandez with or without cause.

The June Agreement also contains certain provisions that are customary for agreements of this nature, including, without limitation, non-competition and non-solicitation covenants, indemnification provisions, etc.

The Company will also reimburse Mr.

Fernandez for any and all premium payments made by him to obtain and continue personal catastrophe and disability insurance coverages for himself, which policy will have policy limits not to exceed one hundred percent (100%) of his base salary per annum at any given time.

In addition, the Company will pay for any and all travel-related expenses incurred by Mr.

Fernandez and/or his immediate family members, not to exceed $10,000.00 per fiscal year, regardless of whether or not such expenses are incurred by Mr.

Fernandez in connection with services or duties to be performed by him as an employee of the Company.

The Company will also pay for any and all fees and costs incurred by Mr.

Fernandez in connection with professional services provided to him, not to exceed $10,000 per year, including, without limitation, services provided to the Company by attorneys, accountants, financial planners and the like, regardless of whether or not such services are provided to Mr.

Fernandez in connection with his employment with the Company.

In addition, the June Agreement (which repeats, but not duplicates, a grant of restricted stock made under the May Agreement), Mr.

Fernandez received an award of restricted stock with a grant date fair value equal to $3,000,000 determined at the per unit offering price in the June Offering ($5 per Unit) (the “RSA”), which RSA will vest 1/3 at each of the three anniversaries of the grant date.

The Grant Date for the RSA is May 28, 2021, as determined pursuant to the May Agreement.

Notwithstanding the vesting schedule, full vesting will occur upon a Change in Control, as that term is defined in the Restricted Stock Agreement pursuant to which the RSA was made (the “May Restricted Stock Agreement”).

The Company at its sole expense is obligated to register for reoffer and resale by Mr.

Fernandez, the securities granted to him pursuant to the May Restricted Stock Agreement.

Fernandez’s employment is terminated for any reason at any time by the Company prior to the full vesting of the RSA without “Cause” (as that term is defined in the June Agreement), the RSA will vest and Mr.

Fernandez will receive all right, title and interest in the balance of the securities granted to him in the RSA.

During the term of the June Agreement and so long as Mr.

Fernandez is employed by the Company, he may nominate two directors to the Company’s Board of Directors.

The appointment of these directors to the Board is subject to approval by the Board of Directors.

On August 7, 2021, the June Agreement was amended in order to, among other things, increase Mr.

Fernandez’s compensation by (i) providing for medical plan coverage for Mr.

Fernandez and his family at the expense of the Company, and (ii) providing for an auto allowance $1,000 per month.

Ellenoff Employment Agreement

On August 24, 2021, Douglas S.

Ellenoff was appointed to the positions of Chief Business Development Strategist of the “Company” and Vice Chairman of the Board of Directors of the Company.

The appointment was made on the approval and recommendation of the Nominating Committee of the Board.

Ellenoff was not appointed to any committees of the Board.

In connection with Mr.

Ellenoff’s appointment to the position of Chief Business Development Strategist of the Company, Mr.

Ellenoff and the Company entered into a three-year Employment Agreement, dated August 24, 2021, which is also referred to herein as the “Ellenoff Agreement”., Under the Ellenoff Agreement, which sets forth the terms of his employment, including with regard to compensation.

Ellenoff will be nominated and renominated to serve on the Board during the term of the agreement.

Under the terms of the Ellenoff Employment Agreement, Mr.

Ellenoff will receive, in lieu of cash compensation:

(i) a restricted stock award of 100,000 shares of Common Stock of the Company, 40,000 of which will be issued within 5 business days of the execution of the Ellenoff Employment Agreement and vest immediately, and the remaining 60,000 of which will be issued and vest at the rate of 20,000 shares at the end of each of the next three annual anniversaries of his employment, provided that Mr.

Ellenoff serves on the Board at any time during such year;

and (ii) options to purchase a total of 1,500,000 shares of the Corporation’s Common Stock, 300,000 of which will issued within 5 business days of the execution of the Ellenoff Employment Agreement and vest immediately, 150,000 of which will vest on each of the next three annual anniversaries of the commencement of his employment, and the remaining 750,000 of which will vest at the rate of 250,000 per year on each of the first three anniversaries of the commencement of his employment if during each such year Mr.

Ellenoff introduces the Company to twelve (12) or more potential Business Transactions (as defined in the Ellenoff Employment Agreement and which transactions need not be consummated);

provided that the Company’s Chief Executive Officer may, in his sole discretion, waive the vesting requirement in any given year.

Such options have an exercise price of $5.35 per share and will terminate 5 years after they vest.

These equity awards to Mr.

Ellenoff were material to induce Mr.

Ellenoff to enter into the Ellenoff Employment Agreement and were issued outside of a shareholder approved stock or option plan pursuant to the Nasdaq “inducement grant” exception (Nasdaq Listing Rule 5635(c)(4)).

Potential Payments Upon Termination or Change-in-Control

In the event of a termination of Mr.

Fernandez’s or Mr.

Phipps’ (the “Subject Employees”) employment as a result of his death or Total Disability (as defined in the respective employment agreement) the Subject Employee or his estate or beneficiaries, as applicable, will be entitled to the following severance benefits:

(i) continued provision for a period of twelve (12) months following the Subject Employee’s death or Total Disability of benefits under the Company’s benefit plans extended by the Company to its senior employees;

and (ii) payment on a pro-rated basis of any bonus or other payments earned prior to the date of termination in connection with any bonus plan to which the Subject Employee was a participant as of the date of death or Total Disability.

In the event of a termination of a Subject Employee’s employment due to the expiration of the term of the respective employment agreement, and where the Company offered to renew the term of employment and the Subject Employee chooses not to continue in the employ of the Company, the Subject Employee will not be entitled to any severance benefits.

Upon termination of employment by the Subject Employee for “good reason” (as defined in the respective employment agreement) or if the Company tenders a non-renewal notice to the Subject Employee without “Cause” (as defined in the respective employment agreement), then the Subject Employee will be entitled to the following severance benefits:

(i) a cash payment, based on the current scale of the Subject Employee’s base salary, equal to six months of base salary;

(ii) continued provision for a period of twelve (12) months after the date of termination of the benefits under the Company’s benefit plans extended by the Company to its senior employees;

(iii) payment on a pro-rated basis of any bonus or other payments earned in connection with any bonus plan to which the Subject Employee was a participant as of the date of the Subject Employee’s termination of employment;

and (iv) any options or restricted stock will be immediately vested upon termination of Subject Employee’s employment.

Upon termination of the Subject Employee’s employment at the Subject Employee’s option (without good reason) or by the Company for “Cause,” then the Subject Employee will be entitled to the following benefits:

(i) continued provision, for a period of one (1) month after the date of the Subject Employee’s termination of employment, of benefits under the Company’s benefit plans extended to the Employee at the time of termination and (ii) any conversion rights available under the Company’s benefit plans and as otherwise provided by law, including the Comprehensive Omnibus Budget Reconciliation Act.

In addition, notwithstanding the vesting schedule set forth in May Restricted Stock Agreement, full vesting of Mr.

Fernandez’s RSA will occur upon a Change in Control, as that term is defined in the May Restricted Stock Agreement pursuant to which the RSA was made.

Fernandez will receive all right, title and interest in the balance of the securities granted to him in the RSA.

In the event of a termination of Mr.

Ellenoff’s employment as a result of his death, his Total Disability (as defined in the Ellenoff Employment Agreement), the expiration of the initial term of the Ellenoff Employment Agreement, Mr.

Ellenoff’s resignation for any reason or no reason (upon thirty (30) days prior written notice), or for “Cause” (as defined in the Ellenoff Employment Agreement);

then, in addition to the reimbursement of documented, unreimbursed expenses incurred prior to such date, Mr.

Ellenoff or his estate or beneficiaries, as applicable, will be entitled to receive any RSAs and options earned and/or vested through the such date, but all other RSAs and options shall immediately terminate.

Upon termination of Mr.

Ellenoff’s employment (as defined in the Ellenoff Employment Agreement), in addition to the reimbursement of documented, unreimbursed expenses incurred prior to such date, Mr.

Ellenoff will be entitled to receive any RSAs and options provided for under the Ellenoff Employment Agreement;

any RSAs and Options that previously had not been vested will immediately vest, and any RSAs or Options contemplated by the Ellenoff Employment Agreement that had not yet been issued to Mr.

Ellenoff will be promptly issued by the Company.

Director Compensation

The 2023 director compensation packages consists of a cash retainer of $48,000 for each non-employee Director, plus an equity award of options to purchase 20,000 shares of common stock to each non-employee Director (“2023 Equity Awards”).

The 2023 Equity Awards were fully vested on the grant date.

The table below sets forth the compensation earned by our non-employee directors for service on our Board of Directors during the year ended December 31, 2023.

Compensation paid to Charles M.

Fernandez, our Executive Chairman, Chief Executive Officer, and Director, David Phipps, our President and Chief Executive Officer of Global Operations, and Director, and Douglas S.

Ellenoff, our Vice Chairman and Chief Business Development Strategist for their service on the Board of Directors is set forth in Summary Compensation Table for named executive officers.

Fees earned or paid in cash

Option awards

Nonequity incentive plan compensation

Nonqualified deferred compensation earnings

All Other Compensation

Louis Cusimano

Hector Delgado

Rodney Barreto

Maria Cristina Fernandez

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information, as of March 26, 2024, regarding beneficial ownership of our common stock by:

each of our directors;

each of our named executive officers;

all directors and executive officers as a group;

each person, or group of affiliated persons, known by us to beneficially own more than five percent of our shares of common stock.

Beneficial ownership is determined according to the rules of the SEC, and generally means that person has beneficial ownership of a security if he or she possesses sole or shared voting or investment power of that security and includes options that are currently exercisable or exercisable within 60 days.

Each director or officer, as the case may be, has furnished us with information with respect to beneficial ownership.

Except as otherwise indicated, we believe that the beneficial owners of common stock listed below, based on the information each of them has given to us, have sole investment and voting power with respect to their shares, except where community property laws may apply.

Name and Address of Beneficial Owner (1)

Directors and Executive Officers

(including Named Executive Officers)

David Phipps†+

Kendall Carpenter†

Louis Cusimano†

Hector Delgado†

Rodney Barreto†

Maria Cristina Fernandez†

Directors and current Executive Officers as a Group

5% Stockholders (9)

Frost Gamma Investment Trust (10)

* Indicates beneficial ownership of less than 1% of the outstanding common stock

+ Executive Officer

* Indicates beneficial ownership of less than 1% of the outstanding common stock

+ Executive Officer

Unless otherwise indicated in the footnotes, the address of the beneficial owners is c/o NextPlat Corp, 3520 Mary St., Suite 410, Coconut Grove, Florida 33133.

A person is deemed to be the beneficial owner of securities that can be acquired by him or her within 60 days from March 26, 2024 upon the exercise of options, warrants or other convertible securities.

Percentage is based on 18,724,596 shares of common stock outstanding as of March 26, 2024.

Represents (i) 3,677,667 shares of common stock, including 2,103,214 shares of common stock held by eAperion Partners, LLC, (ii) options to purchase 345,000 shares of common stock that are currently exercisable, (iii) warrants to purchase 1,685,714 shares of common stock that are currently exercisable, including 1,085,714 warrants owned by eAperion Partners, LLC, (iv) 25,000 shares of common stock owned by Mr.

Fernandez's spouse, which may be deemed to be beneficially owned by Mr.

Fernandez, and (v) options to purchase up to 16,666 shares of common stock owned by Mr.

Fernandez's spouse, which may be deemed to be beneficially owned by Mr.

Does not include options to purchase 8,333 shares of common stock granted to Mr.

Fernandez's spouse on April 7, 2023 that vest on April 7, 2025.

Fernandez is the owner and manager of eApeiron Partners, LLC.

Represents (i) 105,000 shares of common stock and (ii) options to purchase 600,000 shares of common stock that are currently exercisable.

Does not include 20,000 shares of restricted stock awarded on August 24, 2021, that vest on August 24, 2024.

Represents (i) 421,788 shares of common stock, (ii) options to purchase 301,333 shares of common stock that are currently exercisable, and (iii) warrants to purchase 28,500 shares of common stock that are currently exercisable.

Represents (i) 24,599 shares of common stock, and (ii) options to purchase 30,111 shares of common stock that are currently exercisable.

Represents (i) 1,601,085 shares of common stock and (ii) warrants to purchase 1,085,714 shares of common stock that are currently exercisable.

Includes shares of common stock and warrants held indirectly through RLB Market Investments, LLC.

Barreto is owner and manager of RLB Market Investments, LLC.

Includes options to purchase 40,000 shares of common stock that are immediately exercisable.

Based on the contents of statements filed with the SEC by our stockholders, we do not believe that any stockholders other than Messrs.

Fernandez, Barreto, Frost, and Keyser are beneficial owners of more than five percent of our common stock.

The address of the beneficial owners is c/o Gamma Investment Trust, 4400 Biscayne Blvd, Suite 1500, Miami, Florida 33137.

Represents 3,428,571 shares of common stock.

The address of the beneficial owners is 1515 N.

Federal Highway, #300, Boca Raton, Florida 33432.

Represents (i) 202,947 shares of common stock held directly by Robert D.

Keyser, Jr., (ii) 528,344 shares of common stock held by Sixth Borough Capital Fund, LP, (iii) 10,160 shares of common stock held by Robert Dawson Keyser III, (iv) 20,000 shares of common stock held by Auxol Capital, LLC, and (v) warrants to purchase 773,344 shares of common stock that are currently exercisable.

Securities Authorized for Issuance under Equity Compensation Plans

Equity Compensation Plan Information

The following table summarizes information, as of December 31, 2023, relating to equity compensation plans of the Company under which the Company’s common stock is authorized for issuance.

Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted- average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans

Equity compensation plans approved by security holders:

Equity compensation plans 2020 Incentive Plan

Equity compensation plans 2021 Incentive Plan

Equity compensation plans not approved by security holders:

2018 Incentive Plan

Equity compensation issued pursuant to individual compensation arrangements

SECURTIY OWENERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTER

The information in Item 5 of this report regarding our Equity Compensation Plans is herein by reference.

The remainder of the information required by this item is incorporated by reference to our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2024.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

SEC rules require us to disclose any transaction or currently proposed transaction in which the Company is a participant and in which any related person has or will have a direct or indirect material interest involving the lesser of $120,000 or one percent (1%) of the average of the Company’s total assets as of the end of last two completed fiscal years.

A related person is any executive officer, director, nominee for director, or holder of 5% or more of the Company’s common stock, or an immediate family member of any of those persons.

Employees Related to Mr.

For the year ended December 31, 2023 and 2022, the Company employed two individuals related to Mr.

Phipps who earned gross wages totaling approximately $78,000 and $56,000, respectively.

Employee related to Mr.

On July 12, 2022, the Company hired Lauren Sturges Fernandez, the spouse of Mr.

Fernandez, as Manager of Digital Assets.

Fernandez is an at-will employee with an annual salary of $95,000.

On September 22, 2022, Mrs.

Fernandez’s title was changed to Chief of Staff and Special Assistant to the Chairman of the Board, her salary remained the same.

Previously Mrs.

Fernandez was a consultant and earned compensation for her services of $10,995, for the year ended December 31, 2022.

In April 2023, Mrs.

Fernandez’s annual salary increased to $125,000, which was approved by the Board of Directors.

On April 7, 2023, Ms.

Sturges Fernandez was awarded (a) 25,000 fully vested shares of restricted common stock of the Company under the 2021 Plan, and (b) options to purchase 25,000 shares of common stock of the Company at an exercise price of $1.98 per share.

The options have a five-year term.

One third of the options were fully vested on the award date and the remaining options vest on the first and second anniversary of the award date.

Progressive Care.

Following the consummation of the Company’s investment in Progressive Care Inc.

on September 2, 2022, our Chairman and Chief Executive Officer, Charles M.

Fernandez, and our board member, Rodney Barreto, were appointed to Progressive Care’s Board of Directors, with Mr.

Fernandez appointed to serve as Chairman of Progressive Care’s Board of Directors and Mr.

Barreto appointed to serve as a Vice Chairman of Progressive Care’s Board of Directors.

On November 11, 2022, the Progressive Care board of directors elected Mr.

Fernandez as the Chief Executive Officer of Progressive Care.

In addition, on August 30, 2022, NextPlat, Messrs.

Fernandez and Barreto and certain other purchasers (the “NextPlat Investors”) purchased from Iliad Research and Trading, L.P.

(“Iliad”) a Secured Convertible Promissory Note, dated March 6, 2019, made by Progressive Care to Iliad (the “Note”).

The accrued and unpaid principal and interest under the note at the time of the purchase was approximately $2.8 million.

The aggregate purchase price paid to Iliad for the Note was $2.3 Million of which NextPlat contributed $1 million and Messrs.

Fernandez and Barreto contributed $400,000 each (the “Note Purchase”).

Upon completion of the Note Purchase, NextPlat, Messrs.

Fernandez and Barreto and the other purchasers of the Note entered into a Debt Modification Agreement with Progressive Care pursuant to which the Note was amended and restated with modified terms, including a modified conversion price of $4.00 per share of common stock (after giving effect to the Progressive Care reverse stock split described below), and a mandatory conversion upon the later to occur of (a) the completion of the Progressive Care’s reverse stock split, and (b) the listing of Progressive Care’s common stock on a national exchange, including the Nasdaq Capital Market, the Nasdaq Global Market, or the New York Stock Exchange (the “A&R Note”).

In consideration of the concessions in the Debt Modification Agreement, Progressive Care issued 105,000 shares of its common stock to the NextPlat Investors, of which NextPlat, Charles M.

Fernandez and Rodney Barreto, received 45,653, 18,261, and 18,261 shares, respectively, in each case after giving effect to a 1-for-200 reverse stock split enacted by Progressive Care on December 30, 2022.

On May 5, 2023, NextPlat entered into a Securities Purchase Agreement (the “SPA”) with Progressive Care, pursuant to which NextPlat purchased 455,000 newly issued units of securities from Progressive Care (the “Units”) at a price per Unit of $2.20 for an aggregate purchase price of $1 million (the “Unit Purchase”).

Each Unit consisted of one share of common stock, par value $0.0001 per share, of Progressive Care and one warrant to purchase a share of common stock (the “PIPE Warrants”).

The PIPE Warrants have a three-year term and are immediately exercisable.

Each PIPE Warrant is exercisable at $2.20 per share of common stock.

On May 9, 2023, the Companies closed the transactions contemplated in the SPA.

Progressive Care received cash proceeds of $880,000, net of placement agent commission of $70,000 and legal fees of $50,000.

Simultaneous with the closing of the Unit Purchase on May 9, 2023, Progressive Care entered into a Debt Conversion Agreement (the “DCA”) with the NextPlat Investors relating to the A&R Note.

Pursuant to the DCA, the NextPlat Investors agreed to convert the total approximately $2.9 million of outstanding principal and accrued and unpaid interest under the A&R Note to Proogressive Care common stock at a conversion price of $2.20 per share (the “Debt Conversion”).

Of the total 1,312,379 shares of Progressive Care common stock issued pursuant to the Debt Conversion, NextPlat received 570,599 shares, Charles M.

Fernandez received 228,240 shares, and Rodney Barreto received 228,240 shares.

In addition, each of the NextPlat Investors also received a warrant to purchase one share of Progressive Care common stock for each share of Progressive Care common stock they received upon conversion of the A&R Note (the “Conversion Warrants”).

The Conversion Warrants have a three-year term and were immediately exercisable.

Each Conversion Warrant is exercisable at $2.20 per share of Common Stock.

In addition, Progressive Care issued 330,000 warrants to certain existing Progressive Care investors to induce them to approve the Unit Purchase (the “Inducement Warrants”).

Fernandez and Rodney Barreto received Inducement Warrants to purchase 190,000 and 30,000 shares of Common Stock, respectively.

The Inducement Warrants have a three-year term and were immediately exercisable.

Each Inducement Warrant is exercisable at $2.20 per share of Progressive Care common stock.

On July 1, 2023, NextPlat, along with Messrs.

Fernandez and Barreto, exercised certain common stock purchase warrants issued by Progressive Care (the “RXMD Warrants”) and were issued shares of Progressive Care common stock.

NextPlat exercised RXMD Warrants on a cashless basis and was issued 402,269 shares of Progressive Care common stock.

NextPlat also exercised RXMD Warrants on a cash basis and paid consideration in the amount of $506,000 and was issued 230,000 shares of Progressive Care common stock.

Fernandez exercised RXMD Warrants on a cashless basis and was issued 211,470 shares of Progressive Care common stock.

Barreto exercised RXMD Warrants on a cashless basis and was issued 130,571 shares of Progressive Care common stock.

At the time of exercise, all of the above RXMD Warrants were in-the-money.

After the exercise of the RXMD Warrants, NextPlat and Messrs.

Fernandez and Barreto collectively owned approximately 53% of Progressive Care’s voting common stock.

Also, on July 1, 2023, NextPlat entered into a voting agreement with Messrs.

Fernandez and Barreto whereby at any annual or special shareholders meeting of Progressive Care’s stockholders, and whenever the holders of Progressive Care’s common stock act by written consent, Messrs.

Fernandez and Barreto agreed to vote all of their shares of Progressive Care common stock (including any new shares of Progressive Care common stock acquired after the date of the voting agreement or acquired through the conversion of securities convertible into Progressive Care common stock) that they own, directly or indirectly, in the same manner that NextPlat votes its shares of Progressive Care common stock and equivalents.

The voting agreement is irrevocable and perpetual in term.

January 2022 Offering.

The Company received gross proceeds of approximately $7.2 million from the sale Common Stock in an offering that closed on January 5, 2022.

Approximately 73% of funds raised in the offering were secured from existing shareholders, and from members of the Company’s senior management and Board of Directors.

The following table represents the related party investment in the January Offering:

Position held at NextPlat

Shares of Common

Stock Purchased

Purchase Price

Executive Chairman and Chief Executive Officer

Director and President of Orbsat.

Chief Executive Officer of Global Operations

Douglas Ellenoff

Shares are deemed to be indirectly beneficially owned through Sabrina Allan, Mr.

Ellenoff’s wife.

Ellenoff has the power to vote and dispose of the shares.

Vice Chairman and Chief Business Development Strategist

Louis Cusimano

Senior Vice President – Mergers, Acquisitions and Special Projects

On January 20, 2022 , the Company appointed Rodney Barreto, to its Board.

Barreto was a participant of the January offering and purchased 370,701 shares of common stock for $3.24 per share or approximately $1.2 million.

Barreto’s investment represented 17% of the total.

December 2022 Offering.

On December 14, 2022, the Company closed a private placement for the sale of 4,575,429 units (each, a “Unit”), each Unit consisting of (i) one share of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), and (ii) one warrant to purchase one share of Common Stock (each, a “Warrant”).

The offering price of the Units was $1.75 per Unit.

The Warrants included in the Units are exercisable at a price of $1.75 per share and expire three years from the date of issuance.

Related party investment represented 48%, of the approximately $8.0 million of the funds raised.

The following table represents the related party investment in the December Offering:

Position held at NextPlat

Shares of Common

Stock Purchased

Warrants to purchase Common Stock

Purchase Price

eAperion Partners LLC, principal Charles M.

Executive Chairman and Chief Executive Officer

Director and President of NextPlat.

Chief Executive Officer of Global Operations

RLB Market Investments LLC, principal, Rodney Barreto

Next Borough Capital Management, LLC.

On July 7, 2023, the Company entered into an unsecured promissory note agreement with Next Borough Capital Management, LLC (“the Borrower”), whereby the Company loaned $250,000 to the Borrower.

The note bears interest at an annual rate of 7%.

The outstanding principal balance of the note plus all accrued unpaid interest is due and payable on July 7, 2024, the Maturity Date.

Each of the Company, Charles M.

Fernandez, Robert D.

Keyser, Jr., eAperion Partners, LLC and a revocable trust of Rodney Barreto are members of the Borrower.

Policies and Procedures for Related Party Transactions

The Audit Committee was responsible for reviewing, approving and overseeing any transaction between the Company and a related person.

The Audit Committee’s responsibility includes, but is not limited to, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or will be a participant and (a) the amount involved exceeds the lesser of $120,000 or one percent (1%) of the average of the Company’s total assets as of the end of last two completed fiscal years, and (b) a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person.

A related person is any executive officer, director, nominee for director, or holder of 5% or more of the Company’s common stock, or an immediate family member of any of those persons.

Director Independence

The rules of the Nasdaq Stock Market, or the Nasdaq Rules, require a majority of a listed company’s board of directors to be composed of independent directors.

In addition, the Nasdaq Rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees be independent.

Under the Nasdaq Rules, a director will only qualify as an independent director if, in the opinion of our Board, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

The Nasdaq Rules also require that audit committee members satisfy independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries.

In considering the independence of compensation committee members, the Nasdaq Rules require that our board of directors must consider additional factors relevant to the duties of a compensation committee member, including the source of any compensation we pay to the director and any affiliations with our company.

Our Board undertook a review of the composition of our Board and its committees and the independence of each director.

Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our Board has determined that each of our directors, with the exception of David Phipps, Douglas Ellenoff and Charles M.

Fernandez, are independent as defined under the Nasdaq Rules.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Aggregate fees for professional services rendered by RBSM LLP for their services for the fiscal years ended December 31, 2023 and 2022, respectively, were as follows:

Audit fees (1)

Audit-related fees (2)

Other fees (3)

Audit fees represent the aggregate fees billed for professional services rendered by our independent accounting firm for the audit of our annual financial statements, review of financial statements included in our quarterly reports, review of registration statements or services that are normally provided in connection with statutory and regulatory filings or engagements for those fiscal years.

Audit-Related Fees

Audit-related fees represent the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under Audit Fees.

Tax fees represent the aggregate fees billed for professional services rendered by our principal accountants for tax compliance, tax advice, and tax planning for such years.

All Other Fees

All other fees represent the aggregate fees billed for products and services other than the services reported in the other categories.

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee annually reviews audit and non-audit services performed by the independent auditors.

All audit and non-audit services are pre-approved by the Audit Committee, which considers, among other things, the possible effect of the performance of such services on the auditors’ independence.

Exhibits, Financial Statement Schedules.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Documents filed as part of this report.

5 unchanged sentences

(incorporated by reference to Exhibit 1.1 to the Company’ s Current Report on Form 8-K filed with the Commission on December 13, 2022).

Merger Agreement and Plan of Reorganization by and among NextPlat Corp., Progressive Care LLC, and Progressive Care Inc., dated April 12, 2024 (incorporated by reference from Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on April 17, 2024).

Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014).

11 unchanged sentences

Form of Placement Agent Warrant Agreement issued in offering (incorporated by reference to Exhibit 4.2 to the Company’ s Current Report on Form 8-K filed with the Commission on December 13, 2022)

Form 7% Convertible Promissory Note (Incorporated by reference from the Current Report on Form 8-K filed with the SEC on March 11, 2021).

Form Note Purchase Agreement (Incorporated by reference from the Current Report on Form 8-K filed with the SEC on March 11, 2021).

David Phipps Employment Agreement (Incorporated by reference from the Current Report on Form 8-K filed with the SEC on March 11, 2021).

Thomas Seifert Employment Agreement (Incorporated by reference from the Current Report on Form 8-K filed with the SEC on March 11, 2021).

2020 Equity Incentive Plan (Incorporated by reference from the Current Report on Form 8-K filed with the SEC on December 31, 2021).

Form Note Purchase Agreement (Incorporated by reference from the Current Report on Form 8-K filed with the SEC on December 4, 2020).

Form 6% Convertible Promissory Note (Incorporated by reference from the Current Report on Form 8-K filed with the SEC on December 4, 2020).

Debenture by and among Global Telesat Communications LTD and HSBC UK BANK PLC, dated July 16, 2020 (Incorporated by reference from the Company’ s Current Report on Form 8-K filed on July 21, 2020).

Coronavirus Business Interruption Loan Agreement by and among Global Telesat Communications LTD and HSBC UK BANK PLC, dated July 16, 2020 (Incorporated by reference from the Company’ s Current Report on Form 8-K filed on July 21, 2020).

Note Purchase Agreement by and among the Company and the lenders set forth on the lender schedule to the Note Purchase Agreement dated August 21, 2020 (incorporated by reference from the Current Report on Form 8-K filed with the SEC on August 27, 2020).

Form of Option Agreement (Incorporated by reference to Form 10-K, filed with the Securities and Exchange Commission on March 29, 2019)

Convertible Promissory Note by and between Orbital Tracking Corp.

and Power Up Ltd., dated January 14, 2019.

(Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 17, 2019).

Form of Share Note Exchange Agreement by and between Orbital Tracking Corp and certain holders of the Company’ s preferred stock.

(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2019).

Form of 6% Promissory Note dated April 30, 2019, by and between Orbital Tracking Corp and certain holders of the Company’ s preferred stock.

(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2019).

Note Purchase Agreement by and among the Company and the lenders set forth on the lender schedule to the Note Purchase Agreement dated May 13, 2019.

(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 15, 2019).

Amendment to Note Purchase Agreement by and among the Company and the lenders set forth on the lender schedule to the Note Purchase Agreement dated May 13, 2019.

(Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 15, 2019).

Form 7% Convertible Promissory Note (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on March 11, 2021).

Form Note Purchase Agreement (incorporated by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K filed with the SEC on March 11, 2021).

David Phipps Employment Agreement (incorporated by reference to Exhibit 10.3 to the Company’ s Current Report on Form 8-K filed with the SEC on March 11, 2021).

Thomas Seifert Employment Agreement (incorporated by reference to Exhibit 10.4 to the Company’ s Current Report on Form 8-K filed with the SEC on March 11, 2021).

Form Fernandez Restricted Stock Agreement (incorporated by reference to Exhibit 10.19 to Amendment No.4 to the Company’ s registration statement on Form S-1 filed with the SEC on May 25, 2021, File No.

2 unchanged sentences

Form of Director Offer Letter (incorporated by reference to Exhibit 10.17 to the Company’ s Registration Statement on Form S-1/A filed with the SEC on April 7, 2021).

Form of Maxim Lockup Agreement (incorporated by reference to Exhibit A to Underwriting Agreement filed as Exhibit 1.1 to the Company’ s Current Report on Form 8-K filed with the SEC on May 28, 2021).

Hector Delgado Independent Director Agreement (incorporated by reference to Exhibit 10.21 to the Company’ s Current Report on Form 8-K filed with the SEC on June 7, 2021).

Louis Cusimano Independent Director Agreement (incorporated by reference to Exhibit 10.22 to the Company’ s Current Report on Form 8-K filed with the SEC on June 7, 2021).

Miller Independent Director Agreement (incorporated by reference to Exhibit 10.23 to the Company’ s Current Report on Form 8-K filed with the SEC on June 7, 2021).

Carpenter Independent Director Agreement (incorporated by reference to Exhibit 10.24 to the Company’ s Current Report on Form 8-K filed with the SEC on June 7, 2021).

David Phipps Employment Agreement (incorporated by reference to Exhibit 10.25 to the Company’ s Current Report on Form 8-K filed with the SEC on June 7, 2021).

Thomas Seifert Employment Agreement (incorporated by reference to Exhibit 10.26 to the Company’ s Current Report on Form 8-K filed with the SEC on June 7, 2021).

Sarwar Uddin Employment Agreement (incorporated by reference to Exhibit 10.27 to the Company’ s Current Report on Form 8-K filed with the SEC on June 23, 2021).

Theresa Carlise Employment Agreement (incorporated by reference to Exhibit 10.28 to the Company’ s Current Report on Form 8-K filed with the SEC on June 23, 2021).

Alibaba.com Supplemental Services Agreement (incorporated by reference to Exhibit 10.29 to the Company’ s Current Report on Form 8-K filed with the SEC on July 13, 2021).

1 unchanged sentence

Alibaba.com Terms of Use (incorporated by reference to Exhibit 10.31 to the Company’ s Current Report on Form 8-K filed with the SEC on July 13, 2021).

Amendment No.

1 Employment Agreement, dated August 7, 2021, by and between Orbsat Corp and Charles M.

Fernandez (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on August 12, 2021).

Amendment No.

1 Employment Agreement, dated August 7, 2021, by and between Orbsat Corp and David Phipps (incorporated by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K filed with the SEC on August 12, 2021).

Amendment No.

1 Employment Agreement, dated August 7, 2021, by and between Orbsat Corp and Sarwar Uddin (incorporated by reference to Exhibit 10.3 to the Company’ s Current Report on Form 8-K filed with the SEC on August 12, 2021).

Amendment No.

1 Employment Agreement, dated August 7, 2021, by and between Orbsat Corp and Theresa Carlise (incorporated by reference to Exhibit 10.4 to the Company’ s Current Report on Form 8-K filed with the SEC on August 12, 2021).

Employment Agreement, dated August 24, 2021, by and between Orbsat Corp and Douglas S.

Ellenoff (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K/A filed with the SEC on January 27, 2022).

Employment Agreement, dated August 24, 2021, by and between Orbsat Corp and Paul R.

Thomson (incorporated by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K filed with the SEC on August 30, 2021).

Stock Option Agreement, dated August 24, 2021, by and between Orbsat Corp and Douglas Ellenoff (incorporated by reference to Exhibit 10.10 to the Company’ s Quarterly Report filed with the SEC on November 15, 2021).

Restricted Stock Award Agreement, dated August 24, 2021, by and between Orbsat Corp and Douglas Ellenoff (incorporated by reference to Exhibit 10.11 to the Company’ s Quarterly Report filed with the SEC on November 15, 2021).

Stock Option Agreement, dated August 24, 2021, by and between Orbsat Corp and Paul R.

Thomson (incorporated by reference to Exhibit 10.12 to the Company’ s Quarterly Report filed with the SEC on November 15, 2021).

Restricted Stock Award Agreement, dated August 24, 2021, by and between Orbsat Corp and Paul R.

Thomson (incorporated by reference to Exhibit 10.13 to the Company’ s Quarterly Report filed with the SEC on November 15, 2021).

Amended and Restated 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’ s Current Report on Form 8-K filed with the SEC on October 1, 2021).

Amendment No.

1 Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Paul R.

Thomson (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen (incorporated by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Restricted Stock Award Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen (incorporated by reference to Exhibit 10.50 to the Company’ s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Stock Option Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen (incorporated by reference to Exhibit 10.51 to the Company’ s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Amendment No.

2 Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Theresa Carlise (incorporated by reference to Exhibit 10.3 to the Company’ s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Director Services Agreement, dated January 11, 2022, between Orbsat Corp and Rodney Barreto (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on January 11, 2022).

Form of Securities Purchase Agreement dated as of December 31, 2021, by and among Orbsat Corp and the Investors (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on January 5, 2022).

Form of Registration Rights Agreement dated as of December 31, 2021, by and among Orbsat Corp and the Investors (incorporated by reference to Exhibit A of Exhibit 10.54 to this Annual Report on Form 10-K).

Orbsat Corp Amended and Restated 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on December 22, 2021).

Orbsat Corp 2021 Incentive Award Plan (incorporated by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K filed with the SEC on December 22, 2021).

Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen.

(incorporated by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Amendment No.

1 Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Paul R.

Thomson (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Amendment No.

2 Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Theresa Carlise.

(incorporated by reference to Exhibit 10.3 to the Company’ s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Form of Indemnity Agreement, , by and between Orbsat Corp and Douglas Ellenoff entered into on November 18, 2021 (incorporated by reference to Exhibit B of Exhibit 10.1 to the Company’ s Current Report on Form 8-K/A filed with the SEC on January 27, 2022).

Form of Registration Rights Agreement by and between Orbsat Corp and Douglas Ellenoff entered into on November 18, 2021 (incorporated by reference to Exhibit A of Exhibit 10.1 to the Company’ s Current Report on Form 8-K/A filed with the SEC on January 27, 2022)..

Restricted Stock Award Agreement, dated December 18, 2021, by and between Orbsat Corp and Charles M.

Fernandez (275,000 shares of restricted stock) (incorporated by reference to Exhibit 10.63 to the Company’ s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Restricted Stock Award Agreement, dated December 18, 2021, by and between Orbsat Corp and Charles M.

Fernandez (101,000 shares of restricted stock) (incorporated by reference to Exhibit 10.64 to the Company’ s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Restricted Stock Award Agreement, dated December 18, 2021, by and between Orbsat Corp and David Phipps (incorporated by reference to Exhibit 10.65 to the Company’ s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Form of Restricted Stock Award Agreement between the Company and each of Paul R Thomson (10,000 shares) and Theresa Carlise (15,000 shares), entered into in December 2021 (incorporated by reference to Exhibit 10.66 to the Company’ s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Form of Restricted Stock Award Agreement between the Company and each of Kendall Carpenter, Louis Cusimano, Hector Delgado and John E.

Miller, entered into in December 2021 (incorporated by reference to Exhibit 10.67 to the Company’ s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Form of Stock Option Grant Notice and Agreement between Orbsat Corp and each of Charles M.

Fernandez (75,000 shares), Paul R Thomson (10,000 shares) and Theresa Carlise (15,000 shares), entered into in December 2021 (incorporated by reference to Exhibit 10.68 to the Company’ s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Restricted Stock Award Agreement, dated December 20, 2021, by and between Orbsat Corp and Rodney Barreto (incorporated by reference to Exhibit 10.69 to the Company’ s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Amendment No.

1 Employment Agreement, dated May 2, 2022, by and between NextPlat Corp and Andrew Cohen (incorporated by reference to Exhibit 10.1 to the Company’ s Quarterly Report on Form 10-Q filed with the SEC on August 15, 2022).

Stock Option Agreement, dated July 1, 2022, by and between NextPlat Corp and Charles M.

Fernandez (incorporated by reference to Exhibit 10.2 to the Company’ s Quarterly Report on Form 10-Q filed with the SEC on August 15, 2022).

Restricted Stock Agreement, dated July 22, 2022, by and between NextPlat Corp and Charles M.

Fernandez (incorporated by reference to Exhibit 10.3 to the Company’ s Quarterly Report on Form 10-Q filed with the SEC on August 15, 2022).

Securities Purchase Agreement, dated August 30, 2022, by and between NextPlat and Progressive Care Inc.

(incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on September 1, 2022)

Confidential Note Purchase and Release Agreement, dated August 30, 2022, by and between the Company, Progressive Care, Iliad Research and Trading, L.P., PharmCo, L.L.C., Charles Fernandez, Rodney Barreto, Daniyel Erdberg, and Sixth Borough Capital LLC (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on September 1, 2022).

Debt Modification Agreement dated August 30, 2022, by and between the Company, Progressive Care, Charles Fernandez, Rodney Barreto, Daniyel Erdberg, and Sixth Borough Capital LLC (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on September 1, 2022).

Director Services Agreement dated as of September 28, 2022, by and between the Company and M.

Cristina Fernandez (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K/A filed with the SEC on October 5, 2022).

Stock Option Agreement, dated as of October 1, 2022, by and between the Company and M.

Cristina Fernandez (incorporated by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K/A filed with the SEC on October 5, 2022).

Securities Purchase Agreement dated November 16, 2022, by and between NextPlat and Progressive Care Inc.

(incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on November 18, 2022).

Form of Debenture (incorporated by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K filed with the SEC on November 18, 2022).

Security Agreement, dated as of November 16, 2022, by Progressive Care, Inc., Touchpoint RX, LLC, Family Physicians RX, Inc., and ClearMetrX Inc.

in favor of NextPlat Corp (incorporated by reference to Exhibit 10.3 to the Company’ s Current Report on Form 8-K filed with the SEC on November 18, 2022).

Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.4 to the Company’ s Current Report on Form 8-K filed with the SEC on November 18, 2022).

Employment Agreement, dated as of November 7, 2022, by and between the Company and Robert Bedwell (incorporated by reference to Exhibit 10.6 the Company’ s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2022).

Employment Agreement, dated as of November 14, 2022, by and between the Company and Paul Thomson (incorporated by reference to Exhibit 10.7 the Company’ s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2022).

Employment Agreement, dated as of November 14, 2022, by and between the Company and Cecile Munnik (incorporated by reference to Exhibit 10.8 the Company’ s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2022).

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Stock Option Agreement dated December 5, 2022, and effective as of November 14, 2022, by and between the Company and Cecile Munnik (incorporated by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K Filed on December 5, 2022).

Form of Securities Purchase Agreement dated December 9, 2022, by and among the Company and the Investors (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed on December 13, 2022).

Form of Registration Rights Agreement dated December 9, 2022, by and among the Company and the Investors (incorporated by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K filed on December 13, 2022).

Management Services Agreement, dated as of February 1, 2023, by and between NextPlat Corp and Progressive Care, Inc.

(incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on May 15, 2023)

Form of Securities Purchase Agreement dated April 5, 2023 by and among the Company and the Investor (incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 6, 2023)

Merchant Sourcing Agreement, dated as of April 20, 2023, by and between the Company and Alibaba.com Singapore E-Commerce Private Limited, a company organized under the laws of Singapore* (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 26, 2023)

Securities Purchase Agreement, dated May 5, 2023, by and between NextPlat and Progressive Care Inc.

(incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 11, 2023)

Form of PIPE Warrant (incorporated by reference from Exhibit 10.2 to the Company's Current Report on Form 8-K filed on May 11, 2023)

Debt Conversion Agreement, dated May 9, 2023, by and between the NextPlat, Progressive Care Inc., Charles Fernandez, Rodney Barreto, Daniyel Erdberg, and Sixth Borough Capital LLC.

(incorporated by reference from Exhibit 10.3 to the Company's Current Report on Form 8-K filed on May 11, 2023)

Form of Conversion Warrant (incorporated by reference from Exhibit 10.4 to the Company's Current Report on Form 8-K filed on May 11, 2023)

First Amendment to Securities Purchase Agreement, dated May 9,2023, by and between NextPlat and Progressive Care Inc.

(incorporated by reference from Exhibit 10.5 to Current Report on Form 8-K filed with the SEC on May 11, 2023)

Voting Agreement, dated as of June 30, 2023, by and between NextPlat Corp, Charles M.

Fernandez and Rodney Barreto (incorporated by reference from Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2023)

Promissory Note, dated July 7, 2023, in the original principal amount of $250,000 made by Next Borough Capital Management to the order of NextPlat Corp.

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and NextPlat Corp (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 18, 2023) .

Stock Purchase Agreement, dated as of March 25, 2024, by and between NextPlat Corp and James T.

McKinley (incorporated by reference from Exhibit 10.1 to the Company’s Current Report filed on March 29, 2024)

Form of Lock-Up Agreement (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 17, 2024).

Employment Agreement, dated as of August 11, 2024, by and between the Company and David Phipps (incorporated by reference from Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2024).

Elizabeth Alcaine Independent Director Agreement (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 4, 2024).

Amended Director Agreement, dated as of October 1, 2024, by and between the Company and Louis Cusimano.

Independent Director Agreement, dated as of October 1, 2024, by and between the Company and Jervis Hough.

Amended Director Agreement, dated as of October 1, 2024, by and between the Company and Hector Delgado.

Independent Director Agreement, dated as of October 1, 2024, by and between the Company and Douglas Ellenoff.

Independent Director Agreement, dated as of October 1, 2024, by and between the Company and Anthony Armas.

Subsidiaries of NextPlat Corp .

Consent of RBSM LLP .

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Policy Relating to Recovery of Erroneously Awarded Compensation

Inline XBRL Instance Document

Inline XBRL Taxonomy Schema Document

Inline XBRL Taxonomy Calculation Document

Inline XBRL Taxonomy Linkbase Document

Inline XBRL Taxonomy Label Linkbase Document

Inline XBRL Taxonomy Presentation Linkbase Document

Cover Page Interactive Data File (embedded within the Inline XBRL document)

Certification of Principal Executive Officer, pursuant to Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .

Certification of Principal Financial Officer, pursuant to Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .

Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 .

Policy Relating to Recovery of Erroneously Awarded Compensation (incorporated by reference from Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed on April 11, 2024).

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

The following financial statements from the Company's Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL:

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive (Loss) Income, (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

(1) Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

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provided, however that the Company may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any schedule or exhibit so furnished.

* Filed herewith.

+ Management contract or compensatory plan or arrangement.

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

April 11, 2024

March 21, 2025

NEXTPLAT CORP

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Cecile Munnik

Chief Financial Officer, (Principal Financial Officer)

Chief Financial Officer, (Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.

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Chief Executive Officer and Executive Chairman

April 11, 2024

March 21, 2025

(Principal Executive Officer)

/s/ Cecile Munnik

Chief Financial Officer (Principal Financial Officer)

April 11, 2024

Chief Financial Officer

March 21, 2025

Cecile Munnik

(Principal Financial and Accounting Officer)

/s/ David Phipps

President and Chief Executive Officer of Global Operations and Director

April 11, 2024

March 21, 2025

/s/ Douglas S.

Vice Chairman and Chief Business Development Strategist and Director

April 11, 2024

March 21, 2025

Douglas Ellenoff

/s/ Hector Delgado

April 11, 2024

March 21, 2025

Hector Delgado

/s/ Kendall W.

April 11, 2024

Kendall Carpenter

/s/ Elizabeth Alcaine

March 21, 2025

Elizabeth Alcaine

/s/ Louis Cusimano

April 11, 2024

March 21, 2025

Louis Cusimano

April 11, 2024

/s/ Jervis Bennett Hough

March 21, 2025

Jervis Bennett Hough

/s/ Rodney Barreto

April 11, 2024

March 21, 2025

Rodney Barreto

/s/ Maria Cristina Fernandez

April 11, 2024

Maria Cristina Fernandez

/s/ Anthony Armas

March 21, 2025

Anthony Armas

NEXTPLAT CORP AND SUBSIDIARIES

Report of Independent Registered Public Accounting Firm RBSM LLP, New York, NY, (PCAOB ID.

Consolidated Financial Statements

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Equity for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023

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Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of NextPlat Corp and Subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of NextPlat Corp and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of comprehensive loss, equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill and Other Intangibles arising from the acquisition of Progressive Care, Inc.

( “ RXMD ” ) – Refer to Notes 2, 3, 4 and 14 to the consolidated financial statements

Critical Audit Matter Description

As disclosed in Note 3, Goodwill arises in connection with acquisitions.

The excess purchase price over the fair value of net tangible assets and identifiable intangible assets acquired is recorded as goodwill.

As disclosed in Note 4, on July 1, 2023, the Company gained voting control of RXMD and therefore, became a consolidated subsidiary of the Company on July 1, 2023.

Auditing the accounting for the acquisition was complex due to the significant estimation uncertainty in determining the fair values of identified intangible assets, which consisted of Trade Names, Development Technology, Pharmacy Records and Goodwill.

The principal considerations for our determination that performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions required a high degree of auditor judgment and an increased effort, including the need to involve a fair value specialist.

How the Critical Audit Matter Was Addressed in the Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others:

Utilizing personnel with specialized knowledge and skill in valuation to assist in;

i) assessing the appropriateness of the valuation methodology for the intangible assets, ii) evaluating the reasonableness of the growth rates, percent of revenues derived and discount rate used in the income approach, iii) evaluating the reasonableness of the assumptions and estimates used in the valuation methodologies.

Evaluate the reasonableness of management’s significant estimates.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the fair value approach and (ii) the reasonableness of significant assumptions and estimates.

Reviewed and assessed the appropriateness of adjustments to Goodwill, Other Intangibles and other Assets and Liabilities acquired based on changes to their estimated fair values.

Goodwill and Other Intangibles Impairment Assessments – RXMD acquisition – Refer to Notes 3 and 14 to the consolidated financial statements

Business Acquisition – Refer to Note 4 to the consolidated financial statements

Critical Audit Matter Description

As described in Note 14 to the consolidated financial statements, the Company’s goodwill balance was approximately $731,000 as of December 31, 2023.

The Company also has amortizable identifiable intangible assets of approximately $14,423,000, and are related to the RXMD Healthcare Operations reporting unit.

Management tests these assets annually for impairment or more frequently when potential impairment triggering events are present.

Goodwill is tested for impairment by comparing the estimated fair value of a reporting unit to its carrying value.

The principal considerations for our determination that performing procedures relating to the goodwill and intangible asset impairment assessments of the RXMD Healthcare Operations reporting unit is a critical audit matter because (i) the significant, subjective and complex judgments used by management when determining the fair value estimates of the reporting units;

On April 1, 2024, the Company closed the purchase of Outfitter Satellite, Inc.

(“Outfitter”).

Total purchase consideration was $1.1 million.

The purchase price was allocated to identifiable assets and liabilities, as well as intangible assets of $.185 million to trade names, $.415 million to customer records and $.301 to goodwill, less a deferred tax effect of $.145 million.

The principal considerations for our determination that performing procedures relating to the business acquisition is a critical audit matter are as follows;

(i) the Company used Level 3 inputs when determining the fair value of the intangible assets;

(ii) the high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating the significant assumptions used in management’s fair value estimates;

and (iii) the audit effort involved in the use of professionals with specialized skill and knowledge including a valuation expert.

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge including a valuation expert.

How the Critical Audit Matter Was Addressed in the Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others, (i) testing management’s process for determining the fair value estimates of the RXMD Healthcare Operations reporting unit;

These procedures included, among others, (i) testing management’s process for determining the fair value estimates;

(ii) testing the completeness and accuracy of the underlying data used in the fair value approach;

and (iii) evaluating the reasonableness of the significant assumptions used by management related to market multiples, peer group and comparable transaction selection and selection of relevant financial matrices for concluding the fair value of reporting unit and future levels of revenue growth.

Evaluating management’s assumptions related to the future levels of revenue growth involved evaluating whether the assumptions were reasonable considering (i) current and past performance of the reporting units;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

and (iii) evaluating the reasonableness of the significant assumptions used by management.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the fair value approaches and (ii) the reasonableness of significant assumptions of relevant financial matrices for concluding the fair value of reporting unit and future levels of revenue growth.

We have served as the Company’s auditor since 2014.

April 11, 2024

March 21, 2025

PCAOB ID Number 587

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(In thousands, except shares and par data)

December 31, 2024

December 31, 2023

Current Assets

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Finance right-of-use assets, net

Equity method investment

Prepaid expenses, net of current portion

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Income taxes payable

Liabilities from discontinued operations

Total Current Liabilities

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Commitments and Contingencies

Preferred stock ($ 0.0001 par value;

3,333,333 shares authorized)

Common stock ($ 0.0001 par value;

50,000,000 shares authorized, 18,724,596 and 14,402,025 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively)

50,000,000 shares authorized;

25,963,051 and 18,724,596 shares issued and outstanding as of December 31, 2024 and 2023, respectively)

Additional paid-in capital

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(In thousands, except per shares data)

For the Years Ended

Years Ended December 31,

Sales of products, net

$ 32,389 $ 11,710

Revenues from services

37,756 11,710

Cost of products

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Salaries, wages and payroll taxes

Goodwill impairment

Impairment loss

Professional fees

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Loss before other (income) expense

( 23,228 ) ( 7,203 )

Other (income) expense:

Gain on sale or disposal of property and equipment

Interest expense

Interest earned

( 620 ) ( 21 )

Asset write-off

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Total other (income) expense

Loss before income taxes and equity in net loss of affiliate

( 22,291 ) ( 7,335 )

( 28 ) ( 87 )

Loss before income taxes

Loss before equity in net loss of affiliate

( 22,319 ) ( 7,422 )

Gain on remeasurement of fair value of equity interest in affiliate prior to acquisition

Equity in net loss of affiliate

( 1,440 ) ( 1,739 )

( 12,407 ) ( 9,161 )

Net loss attributable to noncontrolling interest

Net loss attributable to non-controlling interest

Net loss attributable to NextPlat Corp

$ ( 3,778 ) $ ( 9,161 )

Comprehensive loss:

$ ( 12,407 ) $ ( 9,161 )

Foreign currency loss

( 22 ) ( 44 )

Comprehensive loss

$ ( 12,429 ) $ ( 9,205 )

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

$ ( 3,778 ) $ ( 9,161 )

Weighted number of common shares outstanding – basic

Weighted number of common shares outstanding – diluted

Basic loss per share

$ ( 0.22 ) $ ( 0.96 )

Diluted loss per share

$ ( 0.22 ) $ ( 0.96 )

Weighted number of common shares outstanding – basic and diluted

Basic and diluted loss per share

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF EQUI TY

FOR THE YEARS ENDED December 31, 2023 AND 2022

YEARS ENDED December 31, 2024 AND 2023

(In thousands )

Stockholders’

$0.0001 Par Value

Comprehensive

Stockholders’

Noncontrolling

Income (Loss)

Equity NextPlat Corp

Balance, December 31, 2021

7,053 $ 1 $ 39,513 $ ( 21,986 ) $ 3 $ 17,531 $ - $ 17,531

Issuance of common stock related to January offering

2,230 - 7,005 - - 7,005 - 7,005

Issuance of common stock related to December offering

4,575 - 7,472 - - 7,472 - 7,472

Stock-based compensation in connection with restricted stock awards

544 - 2,151 - - 2,151 - 2,151

Stock-based compensation in connection with options granted

- - 822 - - 822 - 822

Comprehensive loss

- - - - ( 44 ) ( 44 ) - ( 44 )

- - - ( 9,161 ) - ( 9,161 ) - ( 9,161 )

NextPlat Corp

Balance, December 31, 2022

14,402 $ 1 $ 56,963 $ ( 31,147 ) $ ( 41 ) $ 25,776 $ - $ 25,776

Issuance of common stock related to April offering

3,429 1 5,999 - - 6,000 - 6,000

Issuance of common stock related to exercise of warrants

105 - 184 - - 184 - 184

Issuance of common stock related to restricted stock award

789 - 2,468 - - 2,468 300 2,768

Stock-based compensation in connection with options granted

- - 1,524 - - 1,524 1,052 2,576

Stock-based compensation in connection with warrants granted

- - 32 - - 32 - 32

Acquisition of subsidiary and noncontrolling interests

- - - - - - 23,180 23,180

Comprehensive income

- - - - ( 22 ) ( 22 ) - ( 22 )

- - - ( 3,778 ) - ( 3,778 ) ( 8,629 ) ( 12,407 )

Comprehensive loss

Balance, December 31, 2023

18,725 $ 2 $ 67,170 $ ( 34,925 ) $ ( 63 ) $ 32,184 $ 15,903 $ 48,087

Stock-based compensation in connection with options granted

Stock-based compensation in connection with restricted stock awards

Capital contribution of noncontrolling interests

Issuance of common stock related to exercise of warrants

Issuance of common stock related to Progressive Care Merger

Comprehensive loss

Balance, December 31, 2024

See accompanying notes to consolidated financial statements.

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(In thousands )

For the Years Ended

Years Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 12,407 ) $ ( 9,161 )

Cash received from e-Commerce Operations revenue

Cash received from Healthcare Operations revenue

Cash received from interest income

Cash received from other sources

Cash paid for inventory purchases and other costs of revenue

Cash paid for salaries and related expenses

Cash paid for other recurring operating expenses

Cash paid for interest expense

Cash paid for income taxes

Cash paid for merger costs and other non-recurring expenses

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

Capital contributions to equity method investee

Proceeds from sale or disposal of property and equipment

Cash acquired in acquisition of Progressive Care subsidiary

Cash acquired in acquisition of Outfitter Satellite subsidiary

Cash paid in acquisition of Outfitter Satellite subsidiary

Net cash (used in) provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayments of note payable, related party, net

Issuance of common stock for PIPE transaction

Proceeds from exercise of warrants

Capital contribution of non-controlling interest

Payments on finance lease liabilities

Repayments of notes payable

Net cash provided by financing activities

Effect of exchange rate on cash

Net (decrease) increase in cash

Cash beginning of year

Cash end of year

Reconciliation of net loss to cash flow used by operating activities

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation expense

Change in provision for doubtful accounts

Change in allowance for credit losses

Change in inventory reserve

Amortization of intangible assets

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Amortization of right-of-use assets - finance leases

Write-off of digital assets

Goodwill impairment

Write-off of right-of-use asset

Gain on remeasurement of fair value of equity interest in affiliate prior to acquisition

Impairment loss

Equity in net loss of affiliate

Stock-based compensation

Gain on sale or disposal of property and equipment

Change in operating assets and liabilities:

Accounts receivable

( 3,449 ) ( 34 )

( 2,217 ) ( 267 )

Unbilled revenue

( 47 ) ( 41 )

Prepaid expense

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Operating lease liabilities

( 464 ) ( 101 )

Income taxes payable

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Net cash used in operating activities

( 3,596 ) ( 3,602 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

( 647 ) ( 716 )

Cash acquired in acquisition of subsidiary

Capital contributions to equity method investee

( 1,506 ) ( 7,000 )

Net cash provided by (used in) investing activities

5,199 ( 7,716 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayments of note payable, related party, net

Issuance of common stock for PIPE transaction

Payment of stock issuance costs

Proceeds from exercise of warrants

Payments on finance lease liabilities

Repayments of notes payable

( 299 ) ( 60 )

Net cash provided by financing activities

Effect of exchange rate on cash

( 47 ) ( 70 )

Net increase in cash

Cash beginning of year

18,891 17,268

Cash end of year

$ 26,307 $ 18,891

SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid during the period for

Supplemental schedule of non-cash investing and financing activities:

Business combination without transfer of consideration

See accompanying notes to consolidated financial statements

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Organization and Nature of Operations.

The term “Company” refers to NextPlat Corp and its wholly, majority owned and controlled subsidiaries, except where the context requires otherwise or where otherwise indicated.

Unless the context requires otherwise, references to the “Company”, “we”, “us”, “our”, “our Company”, or “our business” refer to NextPlat Corp and its subsidiaries.

NextPlat Corp:

NextPlat Corp, a Nevada corporation (the “Company”, “NextPlat”, “we”), formerly Orbsat Corp was incorporated in 1997.

NextPlat Corp, a Nevada corporation, formerly Orbsat Corp was incorporated in 1997.

The Company operates two main e-commerce websites as well as 25 third -party e-commerce storefronts on platforms such as Alibaba, Amazon and Walmart.

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(“NXPLBV”) was formed in Amsterdam, Netherlands, as a wholly owned subsidiary of NextPlat Corp.

Presently, NXPLBV does not have any active operations

Progressive Care Inc.:

NXPLBV was liquidated on December 28, 2023.

On April 1, 2024, NextPlat acquired 100 % of the ownership interest of Outfitter Satellite, Inc., a Tennessee corporation (“Outfitter”) in a stock purchase transaction.

Outfitter is a wholly-owned subsidiary of NextPlat Corp.

Progressive Care, LLC (formerly Progressive Care Inc.):

On April 12, 2024, the Company entered into a Merger Agreement and Plan of Reorganization (the “Merger Agreement”) with Progressive Care Inc.

and Progressive Care LLC, a Nevada limited liability company and a direct, wholly owned subsidiary of the Company (“Progressive Care” or “Merger Sub”).

On October 1, 2024 and pursuant to the terms of the Merger Agreement, the Company, Progressive Care Inc.

and Merger Sub entered into a business combination transaction pursuant to which Progressive Care Inc.

merged with and into Merger Sub (the “Merger”), with Merger Sub being the surviving entity of the Merger.

Following the Merger, Progressive Care LLC became a wholly-owned subsidiary of NextPlat.

Progressive Care Inc.

(“Progressive Care”) was incorporated under the laws of the state of Delaware on October 31, 2006.

Progressive, through its wholly-owned subsidiaries, Pharmco, LLC (“Pharmco 901” ), Touchpoint RX, LLC doing business as Pharmco Rx 1002, LLC (“Pharmco 1002” ), Family Physicians RX, Inc.

previously became a controlled subsidiary of the Company on July 1, 2023, therefore the Merger had no financial impact to the Company.

The Merger Agreement and the transactions contemplated thereby were negotiated and approved by a Special Committee comprised of three of the Company’s independent directors.

The Merger Agreement was also approved by the entirety of the Company’s board of directors.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company’s shareholders approved the Merger at the Company’s annual meeting held on September 13, 2024.

Progressive Care, through its wholly-owned subsidiaries, Pharmco, LLC (“Pharmco 901” ), Touchpoint RX, LLC doing business as Pharmco Rx 1002, LLC (“Pharmco 1002” ), Family Physicians RX, Inc.

doing business as PharmcoRx 1103 and PharmcoRx 1204 (“FPRX” or “Pharmco 1103” and “Pharmco 1204” ) (pharmacy subsidiaries collectively referred to as “Pharmco”), and ClearMetrX Inc.

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RXMD Therapeutics has had no operating activity to date.

Florida Sunshine Brands, LLC:

Florida Sunshine Brands, LLC (“Florida Sunshine”) is a Florida limited liability company and incorporated December 6, 2023.

Florida Sunshine operates under an operating agreement between NextPlat, with a 51 % ownership, and Outer Brands FS, LLC, with a 49 % ownership.

Florida Sunshine’s main objective is to source and sell vitamins and nutritional supplements.

NEXTPLAT CORP AND SUBSIDIARIES

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Basis of Presentation and Principles of Consolidation

These consolidated financial statements have been prepared by management in accordance with general accepted accounting principles in the United States of America (“U.S.

GAAP”) and this basis assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

Business acquisition of Progressive Care, Inc.

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission.

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned and majority owned subsidiaries.

All intercompany transactions and balances have been eliminated in consolidation.

Business acquisition of Progressive Care, LLC (formerly Progressive Care, Inc.)

On July 1, 2023, the Company, Charles M.

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The Company previously accounted for its equity interest in Progressive Care as an equity method investment.

The accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries.

Intercompany transactions and balances have been eliminated in consolidation.

On April 12, 2024, NextPlat entered into a Merger Agreement and Plan of Reorganization (the “Merger Agreement”) with Progressive Care Inc, and Progressive Care LLC, a Nevada limited liability company and a direct, wholly owned subsidiary of NextPlat (“Merger Sub”).

Pursuant to the terms of the Merger Agreement, upon the approval of NextPlat’s and Progressive Care’s shareholders, Progressive Care would merge with and into Merger Sub (the “Merger”), with Merger Sub being the surviving entity of the Merger.

The result of which being that Progressive Care would become a wholly-owned subsidiary of NextPlat.

On September 13, 2024, the shareholders of each of NextPlat and Progressive Care approved the Merger Agreement and the transactions contemplated thereby.

On October 1, 2024, at 12:01 Eastern time, the Merger became effective and Progressive Care merged with and into Merger Sub and thereby became a wholly owned subsidiary of NextPlat.

In connection with the Merger, each share of Progressive Care common stock that was issued and outstanding immediately prior to the effective time of the Merger was converted into 1.4865 shares of NextPlat common stock, and each warrant to purchase Progressive Care common stock that was outstanding and unexercised immediately prior to the effective time of the Merger automatically converted into a warrant to purchase shares of NextPlat common stock with each such warrant having and being subject to the same terms and conditions (including vesting and exercisability terms) as were applicable to such Progressive Care warrant immediately before the effective time.

Business acquisition of Outfitter Satellite, Inc.

On March 25, 2024, the Company entered into a Stock Purchase Agreement with James T.

McKinley, pursuant to which the Company agreed to purchase all of the issued and outstanding shares of common stock of Outfitter Satellite, Inc.

(“Outfitter”).

The closing of the transaction occurred on April 1, 2024.

Outfitter is a wholly-owned subsidiary of NextPlat Corp.

Outfitter provides consumers, commercial, and government customers with advanced satellite-based connectivity solutions from leading brands, including Iridium, Inmarsat and Globalstar.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Summary of Significant Accounting Policies

The significant accounting policies of the Company are described below.

Progressive Care became a consolidated subsidiary of the Company on July 1, 2023 and as a result the Company has incorporated certain significant accounting policies of Progressive Care for the year ended December 31, 2024 .

Use of Estimates

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Actual results may differ significantly from those estimates.

Significant estimates made by management include, but are not limited to, assumptions used to calculate stock-based compensation, fair value of net assets acquired in the business combination with Progressive Care.

common stock and options issued for services, net realizable value of accounts receivables the useful lives of property and equipment and intangible assets, the estimate of the fair value of the lease liability and related right of use assets, pharmacy benefit manager ("PBM") fee estimates, and the estimates of the valuation allowance on deferred tax assets and corporate income taxes.

Significant estimates made by management include, but are not limited to, assumptions used to calculate stock-based compensation, fair value of net assets acquired in business combinations, common stock, warrants and options issued for services, net realizable value of accounts receivables and other receivables, the useful lives of property and equipment and intangible assets determining the potential impairment of long-lived assets and goodwill, the estimate of the fair value of the lease liability and related right of use assets, pharmacy benefit manager (“PBM”) fee estimates, inventory reserve estimates, and the estimates of the valuation allowance on deferred tax assets and corporate income taxes.

Reclassification

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These reclassifications had no effect on the reported results of operations.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Summary of Significant Accounting Policies

The significant accounting policies of the Company are described below the fiscal year ended December 31, 2023.

Discontinued Operations

The Company’s former operations were developing and manufacturing products and services, which reduce fuel costs, save power and energy and protect the environment.

The products and services were made available for sale into markets in the public and private sectors.

In December 2009, the Company discontinued these operations and disposed of certain of its subsidiaries.

The remaining liabilities for discontinued operations are presented in the consolidated balance sheets under the caption “Liabilities from discontinued operation” and relates to the discontinued operations of developing and manufacturing of energy saving and fuel-efficient products and services.

The carrying amounts of the major classes of these liabilities as of December 31, 2023 , and 2022 are summarized as follows (in thousands):

December 31, 2023

December 31, 2022

Assets of discontinued operations

Accounts payables and accrued expenses

$ - $ ( 112 )

Liabilities from discontinued operations

$ - $ ( 112 )

January 2022 Private Placement of Common Stock

On December 31, 2021, after markets closed, a securities purchase agreement (the “Purchase Agreement”) was circulated to, and signatures were received from, certain institutional and accredited investors (the “December Investors”) in connection with the sale in a private placement by the Company of 2,229,950 shares of the Company’s common stock (the “December Offering”).

On January 2, 2022, the Company delivered to December Investors a fully executed Purchase Agreement, which was dated December 31, 2021.

The purchase price for the common stock sold in the December Offering was $ 3.24 per share, the closing transaction price reported by Nasdaq on December 31, 2021.

The closing of the December Offering occurred on January 5, 2022.

The Company received gross proceeds from the sale of the common stock in the December Offering of approximately $ 7.2 million.

December 2022 Private Placement of Common Stock

On December 9, 2022, the Company entered into a securities purchase agreement with certain institutional and accredited investors for the sale by the Company in a private placement of 4,575,429 units, each unit comprising (i) one share of the Company’s common stock, and (ii) one warrant to purchase one share of common stock.

The offering price of the units was $ 1.75 per unit.

The warrants included in the units are exercisable at a price of $ 1.75 per share and expire three years from the date of issuance.

On December 9, 2022, the Company entered into placement agency agreement (the “Placement Agency Agreement”) with Dawson James Securities, Inc.

(“Dawson James”).

The Company has agreed to pay Dawson James a placement agent fee of 6 % of the gross proceeds received in the private placement and 3 % on all proceeds from officers and directors including any directed orders from the Company.

As additional compensation under the Placement Agency Agreement, the Company will issue Dawson James warrants (the “Placement Agent Warrants”) to purchase up to 549,051 shares of Common Stock with an exercise price of $ 1.75 per share.

The Placement Agent Warrants are exercisable at any time and from time to time during the three -year period commencing on the six -month anniversary of the closing date.

The Company reimbursed Dawson for up to $ 100,000 for its legal and due diligence expenses.

The offering closed on December 14, 2022, and the Company received gross proceeds of approximately $ 8.0 million for the units.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

During 2024, the Company changed its presentation method on the statements of cash flows from the indirect method to the direct method.

The Company has recast the Consolidated Statements of Cash Flows and related disclosures for the year ended December 31, 2023, to conform to the direct presentation method in the current period.

April 2023 Private Placement of Common Stock

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As a result, management believes that the Company’s existing financial resources are sufficient to continue operating activities for at least one year past the issuance date of the financial statements.

Segment Reporting

The Company evaluated segment reporting in accordance with ASC Topic 280, Segment Reporting , and concluded that the Company is comprised of two operating segments.

This conclusion is based on the discrete operating results regularly reviewed by the chief operating decision maker (“CODM”) to assess the performance of the business and to make resource allocations.

These two operating segments also represent our two reportable segments:

(i) e-Commerce Operations and (ii) Healthcare Operations.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Business acquisitions

The Company records business acquisitions using the acquisition method of accounting.

All of the assets acquired, liabilities assumed, and contractual contingencies are recognized at their fair value on the acquisition date.

The application of the acquisition method of accounting for business combinations requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration between assets that are depreciated and amortized and goodwill.

The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Acquisition-related expenses and restructuring costs are recognized separately from the business combination and are expensed as incurred.

The Company uses a measurement period following the acquisition date to gather information that existed as of the acquisition date that is needed to determine the fair value of the assets acquired, liabilities assumed and equity interests.

The measurement period ends once all information is obtained, but no later than one year from the acquisition date.

Cash and Cash Equivalents

The Company places its cash with high credit quality financial institutions.

The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 .

The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 .

All cash amounts in excess of $ 250,000 , approximately $ 2.4 million, are unsecured.

In April 2023, the Company entered into a deposit placement agreement for Insured Cash Sweep Service (“ICS”).

The Company has a deposit placement agreement for Insured Cash Sweep Service (“ICS”).

This service is a secure and convenient way to access FDIC protection on large deposits, earn a return, and enjoy flexibility.

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Accounts Receivable and Allowance for Doubtful Accounts

The Company has a policy of reserving for questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable.

The Company has a policy of reserving questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable.

The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt.

Account balances deemed to be uncollectible are offset against sales and relieved from accounts receivable, after all means of collection have been exhausted and the potential for recovery is considered remote.

Progressive Care trade accounts receivable are stated at the invoiced amount.

Trade accounts receivable primarily include amounts from third -party pharmacy benefit managers (“PBMs”) and insurance providers and are based on contracted prices.

Trade accounts receivable are unsecured and require no collateral.

Progressive Care trade accounts receivable is stated at the invoiced amount.

Trade accounts receivable primarily include amounts from third -party PBMs and insurance providers and are based on contracted prices.

Trade accounts receivable is unsecured and require no collateral.

Progressive Care records an allowance for doubtful accounts for estimated differences between the expected and actual payment of accounts receivable.

These reductions were made based upon reasonable and reliable estimates that were determined by reference to historical experience, contractual terms, and current conditions.

Each quarter, the Progressive Care reevaluates its estimates to assess the adequacy of its allowance and adjusts the amounts as necessary.

Each quarter, Progressive Care reevaluates its estimates to assess the adequacy of its allowance and adjusts the amounts as necessary.

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

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The Company estimates the net realizable value of such inventories based on analysis and assumptions including, but not limited to, historical usage, expected future demand and market requirements.

A change to the carrying value of inventories is recorded to cost of goods sold.

A change to the carrying value of inventories is recorded to cost of products.

Prepaid Expenses

Prepaid expenses current and long term amounted to approximately $ 640,000 and $ 61,000 , respectively for the year ended December 31, 2023 , as compared to $ 46,000 and $ 49,000 for the year ended December 31, 2022 .

Prepaid expenses include prepayments in cash for accounting fees, which are being amortized over the terms of their respective agreements, as well as cost associated with certain contract liabilities.

The current portion consists of costs paid for future services which will occur within a year.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company applies the equity method of accounting to investments when it has significant influence, but not controlling interest, in the investee.

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The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.

Management reviewed the underlying net assets of the investee as of December 31, 2023 and determined that the Company’s proportionate economic interest in the investee indicate that the investments were not impaired.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Foreign Currency Translation

The Company’s reporting currency is U.S.

The accounts of one of the Company’s subsidiaries, GTC, is maintained using the appropriate local currency, Great British Pound, as the functional currency.

The accounts of one of the Company’s subsidiaries, GTC, are maintained using the appropriate local currency, Great British Pound, as the functional currency.

All assets and liabilities are translated into U.S.

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The translation adjustments are reported as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) gain.

Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of operations.

Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the consolidated statements of comprehensive loss.

The relevant translation rates are as follows:

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Revenue Recognition and Unearned Revenue

In accordance with ASU No.

2016 - 12, Revenue from Contracts with Customers (Topic 606 ):

Narrow-Scope Improvements and Practical Expedient , which is to ( 1 ) clarify the objective of the collectability criterion for applying paragraph 606 - 10 - 25 - 7;

( 2 ) permit an entity to exclude amounts collected from customers for all sales (and other similar) taxes from the transaction price;

( 3 ) specify that the measurement date for noncash consideration is contract inception;

( 4 ) provide a practical expedient that permits an entity to reflect the aggregate effect of all modifications that occur before the beginning of the earliest period presented when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price to the satisfied and unsatisfied performance obligations;

( 5 ) clarify that a completed contract for purposes of transition is a contract for which all (or substantially all) of the revenue was recognized under legacy GAAP before the date of initial application, and ( 6 ) clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required to disclose the effect of the accounting change for the period of adoption.

The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years.

There was no impact as a result of adopting this ASU on the financial statements and related disclosures.

Based on the terms and conditions of the product arrangements, the Company believes that its products and services can be accounted for separately as its products and services have value to the Company’s customers on a stand-alone basis.

When a transaction involves more than one product or service, revenue is allocated to each deliverable based on its relative fair value;

otherwise, revenue is recognized as products are delivered or as services are provided over the term of the customer contract.

e-Commerce Operations:

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Historically, the Company has not incurred significant expenses for warranties.

Equipment sales which have been prepaid, before the goods are shipped are recorded as contract liabilities and once shipped is recognized as revenue.

Equipment sales which have been prepaid, before the goods are shipped are recorded as contract liabilities and once shipped and delivered is recognized as revenue.

The Company also records as contract liabilities, certain annual plans for airtime, which are paid in advance.

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The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, we perform the following five steps:

To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, we perform the following five steps:

(i) identify the contract(s) with a customer;

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Healthcare Operations:

The Company provides prescription pharmaceuticals, COVID- 19 related diagnostics and vaccinations, TPA services, and contracted pharmacy services for 340B covered entities under the 340B Drug Discount Pricing Program.

The Company provides prescription pharmaceuticals, virus related diagnostics and vaccinations, TPA services, and contracted pharmacy services for 340B covered entities under the 340B Drug Discount Pricing Program.

Under the terms of the contracted pharmacy services for 340B covered entities, the Company acts as a pass-through for reimbursements on prescription claims adjudicated on behalf of the 340B covered entities in exchange for a dispensing fee per prescription.

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Thus, the Company only recognizes its net fee for the prescription dispensing transactions and not the gross billing and cost of goods sold for the drugs dispensed.

The Company accrues an estimate of PBM fees, including direct and indirect remuneration (“DIR”) fees, which are assessed or expected to be assessed by payers at some point after adjudication of a claim, as a reduction of prescription revenue at the time revenue is recognized.

Changes in the estimate of such fees are recorded as an adjustment to revenue when the change becomes known.

PBM fees, including direct and indirect remuneration (“DIR”) fees, are assessed by payers and charged at the time of the settlement of a pharmacy claim.

DIR fees are fees charged by PBMs to pharmacies for network participation as well as periodic reimbursement reconciliations.

For some PBMs, DIR fees are charged at the time of the settlement of a pharmacy claim.

Through December 31, 2023, the Company accrued an estimate of PBM fees, including DIR fees, which are assessed or expected to be assessed by payers at some point after adjudication of a claim, as a reduction of prescription revenue at the time revenue is recognized.

Changes in the estimate of such fees are recorded as an adjustment to revenue when the change becomes known.

Through December 31, 2023, for some PBMs, DIR fees were charged at the time of the settlement of a pharmacy claim.

Other PBMs do not determine DIR fees at the claim settlement date, and therefore DIR fees are collected from pharmacies after claim settlement, often as clawbacks of reimbursements based on factors that vary from plan to plan.

For example, two PBMs calculate DIR fees on a trimester basis and charge the Company for these fees as reductions of reimbursements paid to the Company two to three months after the end of the trimester (e.g., DIR fees for January – April 2023 claims were clawback by these PBMs in July – August 2023).

For DIR fees that are not collected at the time of claim settlement, the Company records an accrued liability at each reporting date for estimated DIR fees that are expected to be collected by the PBMs in a future period.

The estimated liability for these fees is highly subjective and the actual amount collected may differ from the accrued liability.

The uncertainty of management’s estimates is due to inadequate disclosure to the Company by the PBMs as to exactly how these fees are calculated either at the time the DIR fees are actually assessed and reported to the Company.

The detail level of the disclosure of assessed DIR fees varies based on the information provided by the PBM.

For example, two PBMs calculate DIR fees on a trimester basis and charge the Company for these fees as reductions of reimbursements paid to the Company two to three months after the end of the trimester (e.g., DIR fees for September - December 2023 claims were clawed back by these PBMs in May - June 2024).

As of December 31, 2023, DIR fees that were not collected at the time of claim settlement, the Company recorded an accrued liability for estimated DIR fees that were fully collected by the PBMs by the end of the second quarter of 2024.

Effective January 1, 2024, all PBMs began charging DIR fees at the time of the settlement of a pharmacy claim.

Billings for most prescription orders are with third -party payers, including Medicare, Medicaid, and insurance carriers.

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Therefore, the Company considers the combined services to be a single performance obligation in each TPA contract.

For each TPA contract, the Company recognizes revenue by measuring the progress toward complete satisfaction of each performance obligation.

The Company uses various observable output methods in measuring progress toward satisfaction of each performance obligation, most notably gross billings under each contract.

ASC 606 provides a practical expedient wherein an entity may recognize revenue in the amount to which it has a right to invoice a customer if the entity has a right to consideration from the customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date.

As stated in the TPA agreements, the Company receives a fixed percentage which is applied to the gross pharmacy service billings over the contract period.

The gross pharmacy service billings are estimated based on the number of prescriptions filled by the Pharmacy Service contractor multiplied by the reimbursement rates set by the insurance providers.

The Company invoices the covered entities for TPA services on a semi-monthly basis and collections are within 24 - 45 days of invoicing.

ASC Topic 606 provides a practical expedient wherein an entity may recognize revenue in the amount to which it has a right to invoice a customer if the entity has a right to consideration from the customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date.

This expedient could be available, for example, for a service contract in which an entity bills a fixed amount for each hour of service provided.

The Company believes that this practical expedient applies to its TPA contracts and we have elected this method in measuring revenue over the TPA contract term.

The Company recognizes COVID- 19 testing revenue when the tests are performed and results are delivered to the customer.

Each test is considered an arrangement with the customer and is a separate performance obligation.

Payment is generally received in advance from the customer.

NEXTPLAT CORP AND SUBSIDIARIES

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Refer to revenue recognition above as to what constitutes deferred revenue.

Shipping and handling costs are included as a component of costs of product sales in the Company’s consolidated statements of operations because the Company includes in revenue the related costs that the Company bills its customers.

Shipping and handling costs are included as a component of costs of product sales in the Company’s consolidated statements of comprehensive loss because the Company includes in revenue the related costs that the Company bills its customers.

Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred.

Advertising expense was approximately $ 188,000 and $ 93,000 for the years ended December 31, 2023 and 2022 , respectively.

Advertising expense was approximately $ 0.2 million and $ 0.2 million for the years ended December 31, 2024 and 2023 , respectively.

Goodwill represents the excess of the purchase price over the value assigned to net tangible and identifiable intangible assets.

Valuation techniques consistent with the market approach, income approach, and/or cost approach are used to measure fair value.

Goodwill and other indefinite-lived intangible assets are assessed annually for impairment in the fourth fiscal quarter and in interim periods if events or changes in circumstances indicate that the assets may be impaired.

Intangible Assets

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Valuation techniques consistent with the market approach, income approach, and/or cost approach are used to measure fair value.

Intangible assets subject to amortization represent the fair value of pharmacy records, tradenames and customer contracts acquired, and capitalized software development costs.

Intangible assets subject to amortization represent the fair value of tradenames and customer contracts acquired.

In valuing these assets, the Company makes assumptions regarding useful lives and projected growth rates, and significant judgment is required.

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If the carrying amounts of those assets exceed their respective fair values, additional impairment tests are performed to measure the amount of the impairment losses, if any.

Pharmacy records and developed software are amortized over 5 years.

Tradenames and customer contracts are amortized over 10 years.

Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable.

Business acquisitions

The Company records business acquisitions using the acquisition method of accounting.

All of the assets acquired, liabilities assumed, and contractual contingencies are recognized at their fair value on the acquisition date.

The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Acquisition-related expenses and restructuring costs are recognized separately from the business combination and are expensed as incurred.

The measurement period ends once all information is obtained, but no later than one year from the acquisition date

Goodwill represents the excess of the purchase price over the value assigned to net tangible and identifiable intangible assets.

Progressive Care, which is our Healthcare Operations, is considered to be the reporting unit for goodwill.

Valuation techniques consistent with the market approach, income approach, and/or cost approach are used to measure fair value.

NEXTPLAT CORP AND SUBSIDIARIES

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Website development

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Depreciation expense for the years ended December 31, 2023 , and 2022 was approximately $ 758,000 and $ 465,000 , respectively.

Depreciation expense for the years ended December 31, 2024 , and 2023 was approximately $ 0.8 million and $ 0.8 million, respectively.

Impairment of Long-lived Assets

The Company reviews its long-lived assets, comprised of property and equipment, right-of-use assets, and intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and consider market participants in accordance with ASC 360 - 10, Accounting for the Impairment or Disposal of Long-Lived Assets .

The Company reviews its long-lived assets, comprised of property and equipment, right-of-use assets, and intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and consider market participants in accordance with ASC Topic 360 - 10, Accounting for the Impairment or Disposal of Long-Lived Assets .

The Company evaluates the long-lived assets of the reporting units for impairment at the lowest asset group level for which individual cash flows can be identified.

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As of December 31, 2024 , there were no indications that the carrying amounts of our long-lived assets exceeded their respective fair values.

The Company did not consider it necessary to record any impairment charges during the years ended December 31, 2023 and December 31, 2022 , respectively.

The Company recorded an impairment loss on long-lived assets for the Healthcare Operations segment, related to intangible assets, in the amount of approximately $ 12.8 million for the year ended December 31, 2024 - see Note 12.

Fair Value of Financial Instruments

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The Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheets at fair value in accordance with the accounting guidance.

The carrying amounts reported in the balance sheet for cash, accounts payable, accrued expenses, and notes payable approximate their estimated fair market values based on the short-term maturity of the instruments.

The carrying amounts reported in the consolidated balance sheets for cash, accounts payable, accrued expenses, and notes payable approximate their estimated fair market values based on the short-term maturity of the instruments.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Stock-based Compensation

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period).

Stock-based compensation is accounted for based on the requirements of ASC Topic 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period).

The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

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The Company’s determination of the fair value using the option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables.

In June 2018, the FASB issued ASU 2018 - 07, Compensation – Stock Compensation.

(Topic 718 ).

This update was intended to reduce cost and complexity and to improve financial reporting for share-based payments issues to non-employees (for example, service providers, external legal counsel, suppliers, etc.).

The ASU expanded the scope of ASC 718, Compensation - Stock Compensation, which previously only included share-based payments issued to employees, to include share-based payments issues to non-employees for goods and services.

Consequently, the accounting for share-based payment to non-employees and employees will be substantially aligned.

This standard became effective for the financial statements issues by public companies for the annual and interim periods beginning after December 15, 2018.

Management adopted this standard on January 1, 2019.

The Company accounts for income taxes pursuant to the provision of ASC 740 - 10, “Accounting for Income Taxes” (“ASC 740 - 10” ) which requires, among other things, an asset and liability approach to calculating deferred income taxes.

The Company accounts for income taxes pursuant to the provision of ASC Topic 740 - 10, “Accounting for Income Taxes” (“ASC 740 - 10” ) which requires, among other things, an asset and liability approach to calculating deferred income taxes.

The asset and liability approach require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities.

A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provision of ASC 740 - 10 related to Accounting for Uncertain Income Tax Positions.

The Company follows the provision of ASC Topic 740 - 10 related to Accounting for Uncertain Income Tax Positions.

When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained.

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As such, the Company has not recorded a liability for uncertain tax benefits.

The Company has adopted ASC 740 - 10 - 25, “Definition of Settlement,” which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished.

The Company has adopted ASC Topic 740 - 10 - 25, “Definition of Settlement,” which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished.

For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Effective January 1, 2019, the Company accounts for its leases under ASC 842, Leases .

Effective January 1, 2019, the Company accounts for its leases under ASC Topic 842, Leases.

Under this guidance, we determine if an arrangement contains a lease at inception based on whether or not the Company has the right to control the asset during the contract period and other facts and circumstances.

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The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term.

Research and Development

The Company accounts for research and development costs in accordance with the Accounting Standards Codification subtopic 730 - 10, Research and Development (“ASC 730 - 10” ).

Under ASC 730 - 10, all research and development costs must be charged to expense as incurred.

Accordingly, internal research and development costs are expensed as incurred.

Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved.

Company-sponsored research and development costs related to both present and future products are expensed in the period incurred.

For the years ended December 31, 2023 and 2022 , there were no expenditures on research and development.

Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income (loss) and all changes to the statements of stockholders’ equity.

For the Company, comprehensive income (loss) for the years ended December 31, 2023 and 2022 included net income (loss) and unrealized income (losses) from foreign currency translation adjustments.

Comprehensive income (loss) includes net income (loss) for the period and unrealized income (losses) from foreign currency translation adjustments.

Earnings per Common Share

Net income (loss) per common share is calculated in accordance with ASC Topic 260:

Earnings per Share (“ASC 260” ).

Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.

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In periods where the Company has a net loss, all dilutive securities are excluded.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

See Note 7 for more information on the computation of earnings per share.

Related Party Transactions

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A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party - see Note 23.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In August 2023, the FASB issued Accounting Standards Update (“ASU”) 2023 - 04, “Liabilities (Topic 405 ) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023 - 07, “Segment Reporting (Topic 280 ) - Improvements to Reportable Segment Disclosures” (“ASU 2023 - 07” ), which requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), an amount for other segment items with a description of the composition, and disclosure of the title and position of the CODM.

ASU 2023 - 07 is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted the provisions of this ASU in the fourth quarter of 2024 and applied the provisions retrospectively to each period presented in the consolidated financial statements.

Adoption of the new standard did not have a material impact on our consolidated financial statements.

In August 2023, the FASB issued ASU 2023 - 04, “Liabilities (Topic 405 ) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

121”, to amend and add various SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Bulletin No.

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ASU 2016 - 13 and related amendments are effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

On an ongoing basis, the Company will contemplate forward-looking economic conditions in recording lifetime expected credit losses for the Company’s financial assets measured at cost.

The Company adopted this guidance effective January 1, 2023 and the adoption had no material impact on our consolidated financial statements and related disclosures.

Any new accounting standards, not disclosed above, that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Accounting Pronouncements Issued but not yet Adopted

In November 2024, the FASB issued ASU 2024 - 03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses”, (“ASU 2024 - 03” ), which is intended to enhance transparency into the nature and function of expenses.

The new accounting rules require that on an annual and interim basis, entities disclose disaggregated operating expense information about specific categories, including purchases of inventory, employee compensation, depreciation, amortization and selling expense.

The new accounting rules will be effective for the Company beginning with the annual period of 2027 and interim periods beginning in 2028.

Early adoption is permitted.

This ASU can be adopted either (i) prospectively to financial statements issued for reporting periods after the effective date of the ASU or (ii) retrospectively to any or all prior reporting periods presented in the financial statements.

While the new accounting rules will not have any impact on the Company’s financial condition, results of operations or cash flows, the adoption of the new accounting rules may result in additional disclosures.

The Company is currently assessing the impact of this guidance on our disclosures.

In December 2023, the FASB issued ASU 2023 - 09, “Income Taxes (Topic 740 )—Improvements to Income Tax Disclosure” (“ASU 2023 - 09” ), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements.

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The Company expects that the adoption of the standard will not have a material impact on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023 - 07, “Segment Reporting (Topic 280 ) - Improvements to Reportable Segment Disclosures” (“ASU 2023 - 07” ), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses.

ASU 2023 - 07 is required to be adopted for annual periods beginning after December 15, 2023, and interim period within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company will adopt this accounting standard update effective January 1, 2024.

The Company expects that the adoption of the standard will not have a material impact on our consolidated financial statements.

Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on the Company’s consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

On July 1, 2023, the Company, along with Messrs.

Fernandez and Barreto, exercised common stock purchase warrants issued by Progressive Care (“RXMD Warrants”) and were issued shares of Progressive Care common stock.

The Company exercised RXMD Warrants on a cashless basis and was issued 402,269 shares of Progressive Care common stock.

The Company also exercised RXMD Warrants on a cash basis and paid consideration in the amount of $ 506,000 and was issued 230,000 shares of Progressive Care common stock.

Fernandez exercised RXMD Warrants on a cashless basis and was issued 211,470 shares of Progressive Care common stock.

Barreto exercised RXMD Warrants on a cashless basis and was issued 130,571 shares of Progressive Care common stock.

At the time of exercise, all of the above RXMD Warrants were in-the-money.

After the exercise of the RXMD Warrants, the Company and Messrs.

Fernandez and Barreto collectively owned approximately 53 % of Progressive Care’s voting common stock.

Also, on July 1, 2023, the Company entered into a voting agreement with Messrs.

Fernandez and Barreto, whereby at any annual or special shareholders meeting of Progressive Care’s stockholders, and whenever the holders of Progressive Care’s common stock act by written consent, Messrs.

Fernandez and Barreto agreed to vote all of the shares of Progressive Care common stock (including any new shares of Progressive Care common stock acquired after the date of the voting agreement or acquired through the conversion of securities convertible into Progressive Care common stock) that they own, directly or indirectly, in the same manner that the Company votes its shares of Progressive Care common stock and equivalents.

The voting agreement is irrevocable and perpetual in term.

As a result of the RXMD Warrant exercises and the entry into the voting agreement, the Company concluded that there was a change in control in Progressive Care.

As of July 1, 2023, NextPlat has the right to control more than 50 percent of the voting interests in Progressive Care through the concurrent common stock purchase warrant exercises and voting agreement noted above.

Beginning on July 1, 2023, the Company changed the accounting method for its investment in Progressive Care, which prior to July 1, 2023 had been accounted for as an equity method investment to consolidation under the voting interest model in FASB ASC Topic 805.

Therefore, Progressive Care became a consolidated subsidiary of the Company on July 1, 2023.

Progressive Care contributed revenues of approximately $ 26.8 million and a net loss of approximately $ 14.7 million to the Company for the period from July 1, 2023 to December 31, 2023.

The following unaudited pro forma summary presents consolidated information of NextPlat Corp as if the business combination had occurred on January 1, 2023 ( in thousands).

For the Twelve Months Ended December 31, 2023

For the Year Ended December 31, 2022

$ 60,704 $ 52,312

$ ( 15,854 ) $ ( 13,867 )

The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table summarizes the consideration transferred to acquire a controlling interest in Progressive Care and the amounts of identified assets acquired and liabilities assumed at the acquisition date, as well as the fair value of the noncontrolling interest in Progressive Care at the acquisition date (in thousands):

Business Acquisition

On March 25, 2024, the Company entered into a Stock Purchase Agreement with James T.

McKinley, pursuant to which the Company agreed to purchase all of the issued and outstanding shares of common stock of Outfitter.

The closing of the transaction occurred on April 1, 2024.

Outfitter provides consumers, commercial, and government customers with advanced satellite-based connectivity solutions from leading brands, including Iridium, Inmarsat and Globalstar.

The following table summarizes the consideration transferred to acquire Outfitter and the amounts of identified assets acquired and liabilities assumed at the acquisition date (in thousands):

Purchase Price Allocation

Total purchase consideration

Fair value of non-controlling interest

Total consideration

Identifiable net assets acquired:

Accounts receivable, net

Accounts receivable, other

Prepaid expenses

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Intangible assets, net:

Development technology

Pharmacy records

Trade name (1)

Customer records (2)

Accounts payable and accrued expenses

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Lease liabilities - current portion

Notes payable - long term

Lease liabilities - long term

Deferred tax liability (3)

Net assets acquired

( 1 ) 10 -year amortization period

( 2 ) 5 -year amortization period

( 3 ) Under federal tax law, previously unidentified finite lived intangible assets recognized from a business combination have no tax basis and therefore are not amortized for tax purposes.

This tax position created a book/tax basis difference that was previously not recognized at July 1, 2023, the date of the business combination transaction.

Therefore, an approximate $ 4.0 million deferred tax liability measurement period adjustment was recorded at December 31, 2023 as a result of the book/tax basis difference for the finite lived intangible assets.

In addition the Company determined that the acquired deferred tax liability could be utilized to offset preexisting deferred tax assets.

Therefore, in accordance with ASC 805 - 740 - 45 - 2, the Company released the deferred tax asset valuation allowance as a reduction to goodwill in the amount of approximately $ 4.0 million during the measurement period.

The total consideration is based on the fair value of the Company’s common stock outstanding at July 1, 2023, which was 7,662,343 total implied shares outstanding and a fair market value of $ 4.45 per share, plus the fair value of warrants and options outstanding at July 1, 2023 of approximately $ 5.8 million.

Total implied shares outstanding at July 1, 2023 consisted of 6,162,343 common shares outstanding and 1,500,000 Preferred Stock, Series B as converted on July 1, 2023.

As a result of NextPlat obtaining control over Progressive Care, NextPlat’s previously held equity interest in Progressive Care was remeasured to fair value, resulting in a gain of approximately $ 11.4 million , which has been recognized in the line item “Gain on remeasurement of fair value of equity interest in affiliate prior to acquisition” on the condensed consolidated statements of comprehensive income (loss).

The fair value of the noncontrolling interest of approximately $ 23.2 million and the fair value of the previously held equity interest of approximately $ 16.7 million in Progressive Care were estimated by applying a market approach and an income approach, respectively.

These fair value measurements of the noncontrolling interest and the previously held equity interest are based on significant inputs not observable in the market, and thus represent Level 3 measurements.

The fair value estimates for the noncontrolling interest and the previously held equity interest are based on ( 1 ) an assumed discount rate range of 10 % to 11 %, ( 2 ) an assumed terminal value based on long-term sustainable growth rates of 3.0 %,( 3 ) assumed financial multiples of reporting entities deemed to be similar to Progressive Care, and ( 4 ) assumed adjustments because of the lack of control or lack of marketability, as relevant, that market participants would consider when estimating the fair value of the noncontrolling interest and the previously held equity interest in Progressive Care.

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after NextPlat’s acquisition of a controlling interest in Progressive Care.

This tax position created a book/tax basis difference at April 1, 2024, the date of the business combination transaction.

Therefore, an approximate $ 0.1 million deferred tax liability was recorded at April 1, 2024 as a result of the book/tax basis difference for the finite lived intangible assets.

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after NextPlat’s acquisition of Outfitter.

The goodwill is not deductible for tax purposes.

The initial recognition of the Progressive Care's identifiable intangible assets, resulting from the acquisition on July 1, 2023 and the application of push-down accounting, were measured using Level 3 inputs.

The fair value at the date of acquisition was approximately $ 15.7 million.

The initial recognition of Outfitter's identifiable intangible assets, resulting from the acquisition on April 1, 2024, were measured using Level 3 inputs.

The fair value at the date of acquisition was approximately $ 0.6 million and were estimated by applying an income approach.

The fair value estimates for the identifiable intangible assets are based on ( 1 ) an assumed discount rate of 37.3 % ( 2 ) an assumed capitalization rate of 34.3 % ( 3 ) assumed long-term growth rate of 3.0 % ( 4 ) an assumed royalty rate of 1.8 % ( 5 ) an assumed tax rate of 26.3 % ( 6 ) an assumed risk free rate of 4.5 % ( 7 ) an assumed equity risk premium of 6.5 % ( 8 ) an assumed company specific risk premium rate of 22.5 % ( 9 ) an assumed beta of 0.82 .

NEXTPLAT CORP AND SUBSIDIARIES

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Cash, accounts receivable, and accounts payable and accrued liabilities:

The amounts reported in the accompanying Condensed Consolidated Balance Sheets approximate fair value due to their short-term nature.

The amounts reported in the accompanying Consolidated Balance Sheets approximate fair value due to their short-term nature.

Notes payable and lease liabilities:

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The carrying value of lease liabilities approximated fair value due to the implicit rate in the lease in relation to the Company’s borrowing rate and the duration of the leases (Level 2 inputs).

Identifiable Intangible Assets

The initial recognition of Progressive Care’s identifiable intangible assets, resulting from the acquisition on July 1, 2023 and the application of push-down accounting, were measured using Level 3 inputs.

The fair value at the date of acquisition was approximately $ 14.7 million.

The initial recognition of the Outfitter identifiable intangible assets, resulting from the acquisition on April 1, 2024, were measured using Level 3 inputs.

The fair value at the date of acquisition was approximately $ 0.6 million.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

e-Commerce revenue:

The Company recognizes revenue from satellite services when earned, as services are rendered or delivered to customers.

Equipment sales revenue is recognized when the equipment is delivered to and accepted by the customer.

Only equipment sales are subject to warranty.

Historically, the Company has not incurred significant expenses for warranties.

Equipment sales which have been prepaid, before the goods are shipped are recorded as contract liabilities and once shipped and accepted by the customer is recognized as revenue.

The Company also records as contract liabilities, certain annual plans for airtime, which are paid in advance.

Once airtime services are incurred, they are recognized as revenue.

Unbilled revenue is recognized for airtime plans whereby the customer is invoiced for its data usage the following month after services are incurred.

Healthcare revenue:

The Company recognizes pharmacy revenue and 340B contract revenue from dispensing prescription drugs at the time the drugs are physically delivered to a customer or when a customer picks up their prescription or purchases merchandise at the store, which is the point in time when control transfers to the customer.

Each prescription claim is considered an arrangement with the customer and is a separate performance obligation.

Payments are received directly from the customer at the point of sale, or the customers’ insurance provider is billed electronically.

For third -party medical insurance and other claims, authorization is obtained to ensure payment from the customer’s insurance provider before the medication is dispensed to the customer.

Authorization is obtained for these sales electronically and a corresponding authorization number is issued by the customers’ insurance provider.

The Company accrues an estimate of pharmacy benefit manager (“PBM”) fees, including direct and indirect remuneration (“DIR”) fees, which are assessed or expected to be assessed by payers at some point after adjudication of a claim, as a reduction of revenue at the time revenue is recognized.

Changes in the estimate of such fees are recorded as an adjustment to revenue when the change becomes known.

The Company recognizes COVID- 19 testing revenue when the tests are performed and results are delivered to the customer.

Each test is considered an arrangement with the customer and is a separate performance obligation.

Payment is generally received in advance from the customer.

The following table disaggregates net revenues by categories (in thousands):

For the Twelve Months Ended December 31, 2023

Year Ended December 31, 2024

e-Commerce Operations

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Sales of products, net

Prescription revenue, net of PBM fees

$ - $ 21,412 $ 21,412

e-Commerce revenue

$ 13,791 $ — $ 13,791

Pharmacy prescription and other revenue, net of PBM fees

— 41,308 41,308

13,791 41,308 55,099

Revenues from services:

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$ 13,791 $ 51,692 $ 65,483

For the Twelve Months Ended December 31, 2022

Year Ended December 31, 2023

e-Commerce Operations

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Sales of products, net

Prescription revenue, net of PBM fees

e-Commerce revenue

$ 10,977 $ — $ 10,977

Pharmacy prescription and other revenue, net of PBM fees

— 21,412 21,412

10,977 21,412 32,389

Revenues from services:

Pharmacy 340B contract revenue

— 5,367 5,367

Revenues, net

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Earnings (Loss) per Share

Net income (loss) per common share is calculated in accordance with Accounting Standards Codification (“ASC”) Topic 260:

Net income (loss) per common share is calculated in accordance with ASC Topic 260:

Earnings per Share (“ASC 260” ).

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The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive.

In periods where the Company has a net loss, all dilutive securities are excluded.

The components of basic and diluted EPS were as follows (in thousands, except per share data).

Year Ended December 31,

For all periods presented, the Company incurred a net loss causing inclusion of any potentially dilutive securities to have an anti-dilutive effect, resulting in diluted loss per common share and basic loss per common share being equivalent.

Years Ended December 31,

Net loss attributable to NextPlat Corp common shareholders

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Basic weighted average common shares outstanding

20,614 17,494

Potentially dilutive common shares

Diluted weighted average common shares outstanding

Basic weighted average earnings (loss) per common share

20,614 17,494

Diluted weighted average earnings (loss) per common share

Basic weighted average loss per common share

$ ( 0.68 ) $ ( 0.22 )

Diluted weighted average loss per common share

$ ( 0.68 ) $ ( 0.22 )

Potentially dilutive common shares excluded from the calculation of diluted weighted average loss per common share:

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At December 31, 2024 and 2023 , accounts receivable consisted of the following (in thousands):

Year Ended December 31,

December 31, 2024

December 31, 2023

Gross accounts receivable – trade

$ 5,036 $ 9,195

allowance for doubtful accounts

allowance for credit losses

( 141 ) ( 272 )

Accounts receivable – trade, net

$ 4,895 $ 8,923

Bad debt expense was approximately $ 47,000 and $ 0 for the twelve months ended December 31, 2023 and 2022 , respectively.

The increase in accounts receivable was attributable to the consolidation of Progressive Care at July 1, 2023.

Accounts Receivable - Other, net

At December 31, 2023 and 2022 , accounts receivable - other, net consisted of the following (in thousands):

Year Ended December 31,

The Company decreased the allowance for credit losses in the amount of approximately $ 0.1 million and $ 47,000 for the year ended December 31, 2024 and 2023, respectively.

Accounts receivable - trade, net for the Company as of January 1, 2023 was approximately $ 0.4 million.

Receivables - Other, net

At December 31, 2024 and 2023 , receivables - other, net consisted of the following (in thousands):

December 31, 2024

December 31, 2023

Performance bonuses

$ 588 $ 1,602

$ 732 $ 1,846

Performance bonuses, paid annually by PBMs, are estimated based on historical pharmacy performance and prior payments received.

Other receivables are loans to employees.

The increase in accounts receivable - other was attributable to the consolidation of Progressive Care at July 1, 2023.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

At December 31, 2024 and 2023 , inventories consisted of the following (in thousands):

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( 439 ) ( 60 )

The increase in inventory was attributable to the consolidation of Progressive Care as of July 1, 2023.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

VAT Receivable

On January 1, 2021, VAT rules relating to imports and exports between the UK and EU changed as a result of the UK’s departure from the EU.

As of December 31, 2023 and 2022 , the Company recorded a receivable in the amount of approximately $ 342,000 and $433,000 , respectively, for amounts available to reclaim against the tax liability from UK and EU countries.

Prepaid Expenses

Prepaid expenses current and long term amounted to approximately $ 640,000 and $ 61,000 , respectively at December 31, 2023 , as compared to $46,000 and $49,000 , respectively at December 31, 2022 .

Prepaid expenses include prepayments in cash for accounting fees, public company expenses, insurance, which are being amortized over the terms of their respective agreements, as well as cost associated with certain contract liabilities.

The current portion consists of costs paid for future services which will occur within a year.

The increase in prepaid expenses was attributable to the consolidation of Progressive Care as of July 1, 2023.

$ 4,881 $ 5,135

During the year ended December 31, 2024, the Company increased the inventory reserve by approximately $ 0.4 million.

Property and Equipment, net

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December 31, 2023

Website development

Office furniture and fixtures

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Rental equipment

Website development

Construction in progress

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$ 3,407 $ 3,989

Depreciation expense was approximately $ 758,000 and $ 465,000 for the twelve months ended December 31, 2023 and 2022 , respectively.

The increase in property and equipment was attributable to the consolidation of Progressive Care as of July 1, 2023.

Depreciation expense was approximately $ 0.8 million and $ 0.8 million for the years ended December 31, 2024 and 2023 , respectively.

NEXTPLAT CORP AND SUBSIDIARIES

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Goodwill and Intangible Assets, net

During the year ended December 31, 2024, the Company concluded that the carrying amount of the Healthcare Operations reporting segment exceeded its fair value, resulting in the recognition of a non-cash goodwill impairment charge of approximately $ 0.7 million.

Interim impairment assessments were considered necessary as a result of the sustained decline in the Healthcare Operations stock price and related market capitalization.

The goodwill impairment charge is reflected in Impairment loss in the Consolidated Statements of Comprehensive Loss.

With the assistance of a third -party valuation firm, the fair value of the Healthcare Operations reporting segment was determined using an income approach whereby the fair value was calculated utilizing discounted estimated future cash flows (level 3 nonrecurring fair value measurement).

The income approach requires several assumptions including estimation of future cash flows, which is dependent on internally-developed forecasts of revenue and profitability, estimation of the long-term rate of growth for the business, estimation of the useful life over which cash flows will occur, and determination of the weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit.

The long-term growth rate used in the impairment was 3.0 % and the weighted average cost of capital used in the impairment was 13.5 %.

The following table reflects changes in the carrying amount of goodwill during the periods presented by reportable segments (in thousands):

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Healthcare Operations

Balances as of December 31, 2021

Accumulated impairment losses

Goodwill, net as of December 31, 2022

1 unchanged sentence

Goodwill acquired

— 14,626 14,626

Impairment losses

— ( 13,895 ) ( 13,895 )

Balances as of December 31, 2023

— 14,626 14,626

Accumulated impairment losses

— ( 13,895 ) ( 13,895 )

Goodwill, net as of December 31, 2023

Changes in Goodwill during the year ended December 31, 2024:

Goodwill acquired

- 14,626 14,626

Goodwill acquired - Outfitter acquisition

Deferred tax effect of intangible basis difference (1)

Impairment losses

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$ 156 $ — $ 156

Increase related to book tax difference of intangible assets arising from the business combination without transfer of consideration.

The initial recognition of goodwill resulting from the acquisition of Progressive Care on July 1, 2023.

The Company performed an annual impairment test for goodwill as of December 31, 2023.

The Company performed an annual impairment test as of December 31, 2023, for our healthcare operations reporting segments.

The fair value of each reporting unit was estimated using the income valuation approach.

The income approach applied a fair value methodology to each reporting unit based on discounted cash flows.

The various inputs to this fair value model are considered Level 3.

This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internally-developed forecasts of revenue and profitability, estimation of the long-term rate of growth for the business, estimation of the useful life over which cash flows will occur, and determination of the weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested.

The weighted average cost of capital used in the impairment test ranged from 11% to 13.5%.

As a result of the 2023 annual impairment test, the Company concluded that the carrying amount of the Pharmacy Operations reporting unit goodwill exceeded its fair value by 95% and recorded a non-cash goodwill impairment charge of approximately $ 13.9 million for the year ended December 31, 2023.

This was included in goodwill impairment charge on the Consolidated Statements of Operations for the year ended December 31, 2023.

( 1 ) Decrease related to book tax difference of intangible assets arising for the business acquisition of Outfitter.

NEXTPLAT CORP AND SUBSIDIARIES

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Intangible Assets

During the year ended December 31, 2024, the Company performed an impairment assessment of long-lived assets as it relates to the Healthcare Operations reporting segment due to the decline in future projected revenues and cash flows.

As a result, the Company completed a recoverability test and concluded that the asset groups were not fully recoverable as the undiscounted expected future cash flows did not exceed their carrying amounts.

The Company, with the assistance of a third -party valuation firm, determined the fair value of the asset groups using an income approach utilizing undiscounted estimated future cash flows (level 3 nonrecurring fair value measurement).

The carrying amount of certain assets in the asset group exceeded the fair value, resulting in the recognition of a non-cash impairment charge to intangible assets of approximately $ 12.8 million for the year ended December 31, 2024 ( reflected in Impairment loss in the Consolidated Statements of Comprehensive Loss).

Intangible assets, net consisted of the following (in thousands):

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Accumulated amortization

Pharmacy records

$ 8,130 $ ( 807 ) $ 7,323

4,700 ( 224 ) 4,476

Developed technology

2,880 ( 281 ) 2,599

Customer Contracts

665 ( 312 ) 353

185 ( 14 ) 171

Total intangible assets

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Pharmacy records

$ 8,130 $ ( 807 ) $ 7,323

4,700 ( 224 ) 4,476

Developed technology

2,880 ( 281 ) 2,599

Customer Contracts

2 unchanged sentences

$ 15,960 $ ( 1,537 ) $ 14,423

Amortization of pharmacy records, trade names, developed technology, and customer contracts is included in depreciation and amortization in the accompanying Consolidated Statements of Comprehensive Income Loss.

For the twelve months ended December 31, 2023 and 2022 , the Company recognized amortization expense of approximately $ 1.3 million and $ 25,000 , respectively.

Future amortization of intangible assets is as follows (in thousands):

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

A summary of the changes to the gross carrying amount, accumulated amortization, and net book value of total intangible assets by reporting unit during the year ended December 31, 2024 is as follows (in thousands):

e-Commerce Operations

Healthcare Operations

Balances as December 31, 2023:

$ 250 $ 15,710 $ 15,960

Accumulated amortization

( 225 ) ( 1,312 ) ( 1,537 )

25 14,398 14,423

Changes during the year ended December 31, 2024:

Outfitter acquisition

Accumulated amortization expense

( 101 ) ( 1,608 ) ( 1,709 )

Impairment - gross amount

— ( 15,710 ) ( 15,710 )

Impairment - accumulated amortization

— 2,920 2,920

499 ( 14,398 ) ( 13,899 )

Balances at December 31, 2024:

Accumulated amortization

( 326 ) — ( 326 )

$ 524 $ — $ 524

For the year ended December 31, 2024 and 2023, the Company recognized amortization expense of approximately $ 1.7 million and $ 1.3 million, respectively.

The following table represents the total estimate for future amortization of intangible assets for the five succeeding years and thereafter as of December 31, 2024 ( in thousands):

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Equity Method Investment

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On December 29, 2022, Progressive Care filed a Certificate of Amendment to Articles of Incorporation (the “Amendment to Articles”) with the Secretary of State of the State of Delaware.

Pursuant to the Amendment to Articles, each 200 shares of Progressive Care’s common stock outstanding was converted into one share of common stock (the “Reverse Stock Split”) and the number of shares of common stock that Progressive Care is authorized to issue was reduced to 100 million (the “Reduction in Authorized Stock”).

Pursuant to the Amendment to Articles, each 200 shares of Progressive Care’s common stock outstanding were converted into one share of common stock (the “Reverse Stock Split”) and the number of shares of common stock that Progressive Care is authorized to issue was reduced to 100 million (the “Reduction in Authorized Stock”).

The Reverse Stock Split and the Reduction in Authorized Stock were approved by the Progressive Care Board of Directors and the shareholders.

3 unchanged sentences

On May 9, 2023, NextPlat and Progressive Care closed the transactions contemplated in the SPA.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Simultaneous with the closing of the Unit Purchase on May 9, 2023, Progressive Care entered into a Debt Conversion Agreement (the “DCA”) with NextPlat and the other holders (the “Holders”) of that certain Amended and Restated Secured Convertible Promissory Note, dated as of September 2, 2022, made by Progressive Care in the original face amount of approximately $ 2.8 million (the “Note”).

11 unchanged sentences

Therefore, Progressive Care became a consolidated subsidiary of the Company on July 1, 2023.

The result of which being that Progressive Care would become a wholly-owned subsidiary of NextPlat.

On September 13, 2024, the shareholders of each of NextPlat and Progressive Care approved the Merger Agreement and the transactions contemplated thereby.

On October 1, 2024, at 12:01 Eastern time, the Merger became effective and Progressive Care merged with and into Mergers Sub and thereby became a wholly owned subsidiary of NextPlat.

NEXTPLAT CORP AND SUBSIDIARIES

14 unchanged sentences

December 31, 2023, carrying amount

The following summarizes the Company’s consolidated statements of operations and comprehensive loss description equity in net loss of affiliate for the year ended December 31, 2023 as follows (in thousands):

The following summarizes the Company’s consolidated statements of comprehensive loss description Equity in net loss of affiliate for the year ended December 31, 2023 as follows (in thousands):

For the Year Ended December 31, 2023

7 unchanged sentences

( 1 ) NextPlat records depreciation expense on its estimated cost basis difference which is subject to change.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Accounts Payable and Accrued Expenses

5 unchanged sentences

Accrued wages and payroll liabilities

Accrued PBM fees

Customer deposits payable

Accrued legal fees

Pre-merger accrued other liabilities

Accrued other liabilities

Customer deposits payable

Accrued PBM fees

$ 7,230 $ 13,176

The increase in accounts payable and accrued expenses was attributable to the consolidation of Progressive Care at July 1, 2023.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Notes Payable

3 unchanged sentences

Mortgage note payable - commercial bank - collateralized

$ 1,050 $ 1,140

Note payable - uncollateralized

6 unchanged sentences

(A) Mortgage Note Payable – collateralized

In 2018, Progressive Care closed on the purchase of land and building located at 400 Ansin Boulevard, Hallandale Beach, Florida.

In 2018, Pharmco closed on the purchase of land and building located at 400 Ansin Boulevard, Hallandale Beach, Florida.

The purchase price was financed in part through a mortgage note and security agreement entered into with a commercial lender in the amount of $ 1,530,000 .

1 unchanged sentence

Principal and interest will be repaid through 119 regular payments of $ 11,901 that began in January 2019, with the final payment of all principal and accrued interest not yet paid on December 14, 2028.

Note repayment is guaranteed by Progressive Care Inc.

Note repayment is guaranteed by Progressive Care.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(B) Note Payable – Uncollateralized

4 unchanged sentences

The Debenture bears interest beginning July 16, 2021, at a rate of 4.0 % per annum over the Bank of England Base Rate ( 0.1 % as of July 16, 2020), payable monthly on the outstanding principal amount of the Debenture.

The Debenture has a term of 6 years from the date of drawdown, July 15, 2026, the “Maturity Date”.

The first repayment of £4,166.67 (exclusive of interest) was made 13 month(s) after July 16, 2020.

Voluntary prepayments are allowed with 5 business days’ written notice and the amount of the prepayment is equal to 10 % or more of the limit or, if less, the balance of the debenture.

The Debenture has a term of six years from the date of drawdown, July 15, 2026, the “Maturity Date”.

Voluntary prepayments are allowed with five business days’ written notice and the amount of the prepayment is equal to 10 % or more of the limit or, if less, the balance of the debenture.

The Debenture is secured by all GTC’s assets as well as a guarantee by the UK government.

The proceeds from the Debenture were used for general corporate and working capital purposes.

The Debenture includes customary events of default, including, among others:

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The amended promissory note payable requires 46 monthly payments of $ 331 , including interest at 6.9 %.

The balance outstanding as of December 31, 2023 on the note payable was approximately $ 6,000 .

The balance outstanding as of December 31, 2024 and 2023 on the note payable was approximately $ 2,000 and $ 6,000 , respectively.

In July 2022, Progressive Care entered into a note obligation with a commercial lender, the proceeds from which were used to purchase pharmacy equipment in the amount of approximately $ 90,000 .

The terms of the promissory note payable require 60 monthly payments of $ 1,859 , including interest at 8.78 % starting January 2023.

The balance outstanding on the note payable was approximately $ 71,000 as of December 31, 2023 .

The balance outstanding on the note payable was approximately $ 58,000 and $ 71,000 as of December 31, 2024 and 2023, respectively.

In September 2022, Progressive Care entered into a note obligation with a commercial lender, the proceeds from which were used to purchase a vehicle in the amount of approximately $ 25,000 .

The terms of the promissory note payable require 24 monthly payments of $ 1,143 , including interest at 8.29 % starting October 2022.

The note was paid in full in September 2024.

The balance outstanding on the note payable was approximately $ 10,000 as of December 31, 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Preferred Stock

We have authorized 3,333,333 shares of $ 0.0001 par value of preferred stock.

No preferred stock was outstanding for any year presented.

We have authorized 50,000,000 shares of $ 0.0001 par value common stock.

As of December 31, 2024 and 2023 , 25,963,051 and 18,724,596 shares, respectively, were issued and outstanding.

Capital Structure

On May 28, 2021, the Company effected a reverse stock split of its common stock at a ratio of 1 -for- 5 (the “Reverse Split”).

No fractional shares of common stock were issued as a result of the Reverse Split.

Stockholders of record who were otherwise entitled to receive a fractional share received a whole share.

The conversion or exercise prices of Company’s issued and outstanding convertible securities, stock options and warrants were adjusted accordingly.

All information presented, assumes a 1 -for- 5 reverse stock split of Company’s outstanding shares of common stock, and unless otherwise indicated, all such amounts and corresponding conversion price or exercise price data set forth have been adjusted to give effect to such assumed reverse stock split.

On October 1, 2024, at 12:01 Eastern time, the Merger became effective and Progressive Care, Inc.

merged with and into Progressive Care, LLC, a wholly owned subsidiary of NextPlat.

Listing on the Nasdaq Capital Market

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Accordingly, the Common Stock has not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.

December 2022 Private Placement of Common Stock ( “ December Offering ” )

The offering price of the units was $ 1.75 per unit.

The warrants included in the units are exercisable at a price of $ 1.75 per share and expire three years from the date of issuance.

The offering closed on December 14, 2022, and the Company received gross proceeds of approximately $ 8.0 million for the units.

The Company intends to use the proceeds from the offering for working capital needs, potential acquisitions, joint ventures, and ongoing business transition activities.

On December 9, 2022, the Company entered into placement agency agreement (the “Placement Agency Agreement”) with Dawson James Securities, Inc.

(“Dawson James”) pursuant to which Dawson James agreed to serve as lead or managing placement agent on a best efforts, agency basis in connection with the private placement of the Units.

The Placement Agent Warrants are exercisable at any time and from time to time during the three -year period commencing on the six month anniversary of the closing date.

January 2022 Private Placement of Common Stock ( “ January Offering ” )

On January 2, 2022, the Company finalized and closed a securities purchase agreement (the “Purchase Agreement”) in connection with the sale in a private placement by the Company of 2,229,950 shares of the Company’s common stock The purchase price for the common stock sold in the offering was $ 3.24 per share.

The Company received gross proceeds from the sale of the common stock of $ 7,225,038 .

Legal and registration fees amounted to $ 220,000 , resulting in net proceeds of approximately $ 7.0 million.

Prior to the private placement close, proceeds of approximately $ 1.4 million, were received and recorded as a stock subscription payable, for the year ended December 31, 2022 .

The Company intended to use the proceeds from the offering for general corporate purposes, including potential acquisitions and joint ventures.

Approximately 73 % of funds raised were secured from existing shareholders and from the members of the Company’s senior management and Board of Directors.

NEXTPLAT CORP AND SUBSIDIARIES

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Underwriter Warrants

In addition to, but separate from, the registered warrants included in the units sold in the June Offering, the Company issued 144,000 warrants to Maxim Group LLC, the underwriter (the “Underwriter Warrants”) in connection with the June Offering.

In June 2021, the Company issued 144,000 warrants to Maxim Group LLC, the underwriter (the “Underwriter Warrants”) in connection with the June 2021 Public Offering ( “June Offering”).

The Underwriter Warrants expire five years from the effective date of the June Offering and are exercisable at a per share price equal to $ 5.50 per share, or 110 % of the public offering price per unit in the June Offering.

1 unchanged sentence

Placement Agent Warrants

On December 9, 2022, pursuant to the December Offering, the Company issued warrants to purchase 4,575,429 shares of common stock in an offering, at an exercise price of $ 1.75 and a term of 3 years.

In December 2022, pursuant to the December 2021 Offering, the Company issued warrants to purchase 4,575,429 shares of common stock in an offering, at an exercise price of $ 1.75 and a term of 3 years.

In addition to, but separate from, the unregistered warrants included in the units sold in the December 2021 Offering, the Company issued 549,051 warrants to purchase shares of Common Stock with an exercise price of $ 1.75 per share, to its Placement Agent Dawson James Securities Inc.

1 unchanged sentence

As of December 31, 2024 and 2023 , there were 1,187,035 and 549,051 Placement Agent Warrants issued and outstanding, respectively.

Progressive Care Merger W arrants

On October 1, 2024, as a result of the Progressive Care merger with NextPlat, each warrant to purchase Progressive Care common stock that was outstanding and unexercised immediately prior to the effective time of the Merger automatically converted into a warrant to purchase shares of NextPlat common stock with each such warrant having and being subject to the same terms and conditions (including vesting and exercisability terms) as were applicable to such Progressive Care warrant immediately before the effective time.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Stock-Based Compensation Warrants

There were no stock-based compensation warrants issued for the year ended December 31, 2024.

For the year ended December 31, 2023, the Company granted warrants as stock-based compensations valued at approximately $ 1.60 per warrant, using a Black-Scholes option pricing model with the following assumptions:

stock price of $ 1.60 per share (based on closing price of the Company’s common stock on the date of grant), volatility of 507 %, expected term of 3 years and a risk free interest rate of 4.47 %.

stock price of $ 1.60 per share (based on closing price of the Company’s common stock on the date of grant), volatility of 507 %, expected term of three years, and a risk free interest rate of 4.47 %.

As of December 31, 2024 and 2023 , there were 20,000 and 20,000 Stock-Based Compensation Warrants issued and outstanding, respectively.

6 unchanged sentences

20,000 1.65 3.00

( 105,000 ) 1.75 —

Balance outstanding and exercisable at December 31, 2023

6 unchanged sentences

8,809,520 $ 2.73 1.26

( 1 ) Warrants issued related to the Progressive Care Merger on October 1, 2024.

As of December 31, 2024 , and December 31, 2023 , there were 8,809,520 and 7,569,572 warrants outstanding, respectively.

5 unchanged sentences

Stock-Based compensation

For the years ended December 31, 2023 and 2022 , stock-based compensation expense recognized in SG&A expenses was approximately $ 5.4 million and $ 3.0 million, respectively.

Stock-based compensation expense is recorded in selling, general and administrative expenses in the Consolidated Statements of Comprehensive Loss.

For the years ended December 31, 2024 and 2023 , stock-based compensation expense was approximately $ 1.6 million and $ 5.4 million, respectively.

There were no income tax benefits recognized from stock-based compensation during the years ended December 31, 2024 and 2023 due to cumulative losses and valuation allowances.

Stock Award Plans

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( 220,000 ) 5.03

Outstanding as of December 31, 2023

( 5,000 ) 5.37

As of December 31, 2022 , there was approximately $ 2.3 million of net unrecognized compensation cost related to unvested stock-based compensation to be recognized over the remaining weighted average period of 1.40 years.

Outstanding as of December 31, 2024

As of December 31, 2023 , there was approximately $ 1.1 million of net unrecognized compensation cost related to unvested stock-based compensation to be recognized over the remaining weighted average period of 1.58 years.

As of December 31, 2024 , there was no unrecognized compensation cost related to unvested stock-based compensation to be recognized as there were no outstanding awards.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Stock Options

Stock options outstanding at December 31, 2023 and 2022 , as disclosed in the below table, have approximately ($ 4.4 million) and ($ 6.1 million) of intrinsic value, respectively.

Stock options outstanding at December 31, 2024 and 2023 , as disclosed in the below table, have approximately $ 3,000 and $ 0.2 million of intrinsic value, respectively.

A summary of the status of the Company’s outstanding stock options and changes during the years ended December 31, 2024 and 2023 , is as follows:

16 unchanged sentences

(250,000 ) 5.35 — —

( 3,084 ) $ - $ - -

Balance outstanding at December 31, 2024

2 unchanged sentences

2,453,752 $ 3.11 $ 2.55 4.36

( 1 ) Stock options granted as a result of the Progressive Care Merger on October 1, 2024.

On October 1, 2024, at 12:01 Eastern time, the Merger became effective and Progressive Care merged with and into Merger Sub and thereby became a wholly owned subsidiary of NextPlat.

For the year ended December 31, 2024 , the Company granted 480,088 stock options valued at approximately $ 1.30 per option, using a Black-Scholes option pricing model with the following assumptions:

stock price of $ 1.30 per share (based on closing price of the Company’s common stock on the date of grant), volatility of 236 % - 240 %, expected term of 7 to 8 years and a risk free interest rate of 3.61 % to 3.64 %.

As of December 31, 2024 , there was approximately $ 44,000 of net unrecognized compensation cost related to unvested stock options to be recognized over the remaining weighted average period of 3.27 years.

For the year ended December 31, 2023 , the Company granted 395,000 stock options valued at approximately $ 1.98 - $ 2.64 per option, using a Black-Scholes option pricing model with the following assumptions:

stock price of $ 1.98 -$ 2.64 per share (based on closing price of the Company’s common stock on the date of grant), volatility of 502 %- 504 %, expected term of 2 - 5 years, and a risk free interest rate of 3.31 %- 3.71 %.

As of December 31, 2022 , there was approximately $ 1.4 million of net unrecognized compensation cost related to unvested stock options to be recognized over the remaining weighted average period of 3.73 years.

stock price of $ 1.98 - $ 2.64 per share (based on closing price of the Company’s common stock on the date of grant), volatility of 502 % - 504 %, expected term of 2 to 5 years and a risk free interest rate of 3.31 % to 3.71 %.

As of December 31, 2023 , there was approximately $ 1.4 million of net unrecognized compensation cost related to unvested stock options to be recognized over the remaining weighted average period of 2.88 years.

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ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.

The tax reform bill that Congress voted to approve December 20, 2017, also known as the “Tax Cuts and Jobs Act”, made sweeping modifications to the Internal Revenue Code, including a much lower corporate tax rate, changes to credits and deductions, and a move to a territorial system for corporations that have overseas earnings.

The act replaced the prior-law graduated corporate tax rate, which taxed income over $10.0 million at 35%, with a flat rate of 21%.

Due to the continuing loss position of the Company, such changes should not be material.

purposes, the Company has not completed its evaluation of NOL utilization limitations under Internal Revenue Code, as amended (the “Code”) Section 382, change of ownership rules.

If the Company has had a change in ownership, the NOL’s would be limited as to the amount that could be utilized each year, or possibly eliminated, based on the Code.

The Company has also, not completed its review of NOL’s pertaining to years the Company was known as “Silver Horn Mining Ltd.” and “Great West Resources, Inc.”, which may not be available due to IRC Section 382 and because of a change in business line that may eliminate NOL’s associated with ““Silver Horn Mining Ltd.” and “Great West Resources, Inc.” The company has also not reviewed the impact relating to “Recent Events” for its IRC Section 382 possible NOL’s limitation.

The components of earnings before income taxes for the years ended December 31, 2024 and 2023 were as follows (in thousands):

Years Ended December 31,

Net loss after loss in equity method investment and before income taxes:

1 unchanged sentence

$ ( 23,054 ) $ ( 12,379 )

Income tax provision (benefit) consists of the following for the years ended December 31, 2023 and 2022 (in thousands):

Income tax (benefit) provision:

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Income tax provision consisted of the following for the years ended December 31, 2024 and 2023 (in thousands):

Years Ended December 31,

Income tax provision:

Total current

Total deferred

Total income tax (benefit) provision

Total income tax provision

The Company’s wholly owned subsidiary, GTC, is a United Kingdom (“UK”) Limited Company and files tax returns in the UK.

Its estimated tax liability for December 31, 2024 and 2023 is approximately $ 56,000 and $ 60,000 , respectively.

Progressive Care's estimated tax liability for December 31, 2023 is approximately $ 0 .

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

A reconciliation of the income tax provision (benefit) by applying the statutory United States federal income tax rate to income (loss) before income taxes is as follows (in thousands):

Year Ended December 31,

Federal income tax (benefit) provision at statutory rate

Years Ended December 31,

Federal income tax provision at statutory rate

$ ( 1,666 ) $ ( 2,655 )

State tax expense net of federal tax benefit

State tax expense federal impact

Deferred state income taxes, net

Provision true-up adjustments

State rate change adjustment

Foreign taxes at rate different than US Taxes

3 unchanged sentences

Change in valuation allowance

Income tax (benefit) provision

Income tax provision

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Deferred tax assets and liabilities are provided for significant income and expense items recognized in different years for tax and financial reporting purposes.

7 unchanged sentences

Equity method investment loss

Accounts receivable

Right-of-use assets

Other tax carry-overs

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Stock-based compensation

Interest limitation

Total deferred tax assets

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Book basis of intangible assets in excess of tax basis

Lease liabilities

Total deferred tax liabilities

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Net deferred tax asset

Nextplat Corp's net operating loss carryforward increased from approximately $ 14.8 million at December 31, 2022 to $ 17.8 million at December 31, 2023 .

After consideration of all the evidence, both positive and negative, management has recorded a full valuation allowance at December 31, 2023 and 2022 , due to the uncertainty of realizing the deferred income tax assets.

The change in the valuation allowance for 2023 was approximately $ 2.2 million.

Out of the approximately $17.8 million net operating losses carry forward, approximately $ 2.9 million will begin to expire in 2036 and approximately $ 14.9 million will have an indefinite life.

Progressive Care's net operating loss carryforward decreased from approximately $ 14.4 million at December 31, 2022 to $ 14.1 million at December 31, 2023.

Nextplat Corp’s net operating loss carryforward (“NOL carryforward”) increased from approximately $ 17.8 million at December 31, 2023 to $ 21.7 million at December 31, 2024 .

Out of the approximately $ 21.7 million NOL carryforward, approximately $ 2.9 million will begin to expire in 2032 and approximately $ 18.8 million will have an indefinite life.

Progressive Care, LLC has an NOL carryforward of approximately $ 16.4 million.

However, the Company has not performed an IRC Section 382 analysis of the Progressive Care NOL carryforward, so it is not known as this time the amount of the NOL carryforward available to offset NextPlat future taxable income.

IRC Section 382 imposes a limitation on a company to use historical NOLs and certain other tax attributes in the event of an ownership change.

After consideration of all the evidence, both positive and negative, management has recorded a full valuation allowance at December 31, 2024 and 2023 , due to the uncertainty of realizing the deferred income tax assets.

The change in the valuation allowance for 2023 was an increase of approximately $ 1.7 million, exclusive of the approximate $ 4.0 million reversal of the valuation allowance attributable to the business combination.

Out of the approximately $13.8 million net operating losses carry forward, approximately $ 2.8 million will begin to expire in 2032 and approximately $ 11.0 million will have an indefinite life.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Internal Revenue Code includes a provision, referred to as Global Intangible Low-Taxed Income (“GILTI”), which provides for a 10.5% tax on certain income of controlled foreign corporations.

We have elected to account for GILTI as a period cost if and when occurred, rather than recognizing deferred taxes for basis differences expected to reverse.

The change in the valuation allowance for 2024 was an increase of approximately $ 5.4 million.

The Company is subject to taxation in the U.S.

1 unchanged sentence

federal income tax returns for 2021 and after remain open to examination.

We and our subsidiaries are also subject to income tax in multiple states and foreign jurisdictions.

Generally, foreign income tax returns after 2020 remain open to examination.

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For the years ended December 31, 2024 and 2023 , there were no penalties or interest recorded in income tax expense.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company has entered into a number of lease arrangements under which the Company is the lessee.

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The terms of the lease agreement require monthly payments of approximately $ 1,700 plus applicable tax over 84 months ending March 2025 including interest at the rate of 6 %.

In December 2020, Progressive Care entered into an interest-free finance lease obligation to purchase computer servers with a cost of approximately $ 51,000 .

The terms of the lease agreement require monthly payments of approximately $ 1,400 plus applicable tax over 36 months ending November 2023.

Operating Lease Agreements

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The Poole lease was renewed on October 6, 2022, and expired October 31, 2023 and renewed for an additional twelve months.

On August 1, 2024 we relocated from our previous location in Poole, England to a new facility in Poole and entered into a new lease for office and warehouse space.

This is a three -year lease and expires on July 31, 2027.

The annual rent is approximately £14,000 through July 31, 2025, approximately £30,000 through July 31, 2026, and approximately £26,000 through July 31, 2027.

Outfitter rents office space at 2727 Old Elm Hill Pike, Nashville, Tennessee.

The lease was entered into and commenced in April 2024 with an expiration date of April 2026.

The lease agreement calls for monthly payments of approximately $ 4,800 .

Progressive Care entered into a lease agreement for its Orlando pharmacy in August 2020.

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The rent increases 3 % annually.

The lease commenced on June 7, 2023, and will expire on June 6, 2026.

The lease commenced on June 7, 2023.

In June 2024, NextPlat terminated the lease and paid a lease termination fee in the amount of $ 0.1 million.

The remaining carrying value, net of the ROU asset and liability in the amount of $ 0.1 million, was written off and recorded in asset write-off on the Consolidated Statements of Comprehensive Loss.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Variable expenses generally represent the Company’s share of the landlord’s operating expenses.

1 unchanged sentence

We use the long-lived assets impairment guidance in ASC Subtopic 360 - 10, Property, Plant, and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.

As of December 31, 2023 and 2022 , we have not recognized any impairment losses for our ROU assets.

We monitor for events or changes in circumstances that require a reassessment of one of our leases.

The Company recorded approximately

$ 0.1 million of impairment loss related to the write-down of a right-of-use asset as a result of taking the leased equipment out of service and

not returning to service in the future.

This was recorded to the Healthcare Operations reporting segment for the year ended

December 31, 2024.

We monitor for events or changes in circumstances that require a reassessment of

one of our leases.

When a reassessment results in the re-measurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero.

In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

We recognized lease costs associated with all leases as follows (in thousands):

For the Year Ended December 31,

Years Ended December 31,

Operating lease cost:

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Total Lease Costs

Supplemental cash flow information related to leases was as follows (in thousand):

For the Year Ended December 31,

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Supplemental cash flow information related to leases was as follows (in thousands):

Years Ended December 31,

Cash paid for amounts included in the measurement of lease liabilities:

22 unchanged sentences

Weighted average discount rate

6.00 % 6.00 %

NEXTPLAT CORP AND SUBSIDIARIES

7 unchanged sentences

Total lease payments to be paid

24 1,545 1,569

future interest expense

1 unchanged sentence

Lease liabilities

23 1,461 1,484

current maturities

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(i) e-Commerce Operations, which involves acquiring and leasing, primarily an 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, and other related businesses and (ii) Healthcare Operations, which provides TPA, data management, COVID- 19 related diagnostics and vaccinations, prescription pharmaceuticals, compounded medications, telepharmacy services, anti-retroviral medications, medication therapy management, the supply of prescription medications to long-term care facilities, medication adherence packaging, contracted pharmacy services for 340B covered entities under the 340B Drug Discount Pricing Program, and health practice risk management.

The Company evaluates the performance of each of the segments based on profit or loss after general and administrative expenses.

This organizational structure aligns with how the Company’s CODMs manage the business, including resource allocation and performance assessment, and further aligns with the Company’s product categories and the key markets the Company serves.

The CODMs include the Company’s Chief Executive Officer and Chief Financial Officer.

Additionally, the e-Commerce Operations reportable segment CODM includes the President of Global Operations and the Healthcare Operations reportable segment CODM includes the Pharmacy Chief Operating Officer.

The CODMs do not review segment assets and segment expenses at a level different than what is reported in the Company’s Consolidated Balance Sheets and Consolidated Statements of Comprehensive Loss.

While the Company believes there are synergies between the two business segments, the segments are managed separately because each requires different business strategies.

The following tables present a summary of the reportable segments (in thousands):

For the Twelve Months Ended December 31, 2023

Accounting policies associated with our operating segments are generally the same as those described in Note 1.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following tables provide information about the Company’s reportable segments (in thousands):

Year Ended December 31, 2024

e-Commerce Operations

Healthcare Operations

Pharmacy prescription and other revenue, net of PBM fees

$ - $ 21,412 $ - $ 21,412

e-Commerce revenue

$ 13,791 $ — $ — $ 13,791

Pharmacy prescription and other revenue, net of PBM fees

— 41,308 — 41,308

Pharmacy 340B contract revenue

8 unchanged sentences

2,372 9,069 — 11,441

Goodwill impairment

Impairment loss

— 13,653 — 13,653

5 unchanged sentences

20,301 69,046 ( 240 ) 89,107

Loss before other (income) expense

Operating loss

( 6,510 ) ( 17,354 ) 240 ( 23,624 )

For the Twelve Months Ended December 31, 2022

Interest expense

Other (income) expense

( 647 ) ( 244 ) 240 ( 651 )

Loss before income taxes

( 5,876 ) ( 17,178 ) — ( 23,054 )

( 71 ) — — ( 71 )

$ ( 5,947 ) $ ( 17,178 ) $ — $ ( 23,125 )

Year Ended December 31, 2023

e-Commerce Operations

Healthcare Operations

Pharmacy prescription and other revenue, net of PBM fees

$ - $ - $ - $ -

e-Commerce revenue

$ 10,977 $ — $ — $ 10,977

Pharmacy prescription and other revenue, net of PBM fees

— 21,412 — 21,412

Pharmacy 340B contract revenue

— 5,367 — 5,367

Revenues, net

6 unchanged sentences

2,670 3,973 — 6,643

Impairment loss

— 13,895 — 13,895

Professional fees

1 unchanged sentence

Depreciation and amortization

647 1,463 — 2,110

Total expenses

19,667 41,437 ( 120 ) 60,984

Loss before other (income) expense

Operating loss

( 8,690 ) ( 14,658 ) 120 ( 23,228 )

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Interest expense

Other (income) expense

( 1,072 ) ( 64 ) 120 ( 1,016 )

Loss before income taxes

( 7,643 ) ( 14,648 ) — ( 22,291 )

( 28 ) — — ( 28 )

$ ( 7,671 ) $ ( 14,648 ) $ — $ ( 22,319 )

e-Commerce Operations

5 unchanged sentences

Capital expenditures for the year ended December 31, 2024 were approximately $ 50,000 for e-Commerce Operations and $ 139,000 for Healthcare Operations.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Commitments and Contingencies

On June 22, 2021, Thomas Seifert’s employment as the Company’s Chief Financial Officer was terminated for cause.

Seifert asserts that the termination was not for cause and that he is owed compensation payable under his June 2, 2021 employment agreement.

The Company’s position is that Mr.

Seifert is not owed any additional compensation relating to his prior service with the Company or arising under any employment agreement.

The Company and Mr.

Seifert are currently engaged in litigation over the matter of his employment and termination.

The Company believes it has adequate defenses to Mr.

Seifert’s claims and has asserted affirmative claims for relief against Mr.

Seifert including, but not limited to, breach of the employment agreement, breach of his fiduciary duties, fraud in the inducement in connection with the employment agreement, fraudulent misrepresentation, and constructive fraud.

A detailed recitation of the Company’s factual allegations supporting these claims can be found in the Company’s Second Amended Complaint, filed June 21, 2022.

The Company does not expect to seek substantial monetary relief in the litigation.

This dispute is pending before the District Court for the Southern District of Florida under Case No.

1:21 -cv- 22436 -DPG.

On July 5, 2022, Mr.

Seifert moved to dismiss NextPlat’s Second Amended Complaint, and filed a Counterclaim against the Company and its Chief Executive Officer, Charles M.

In his Counterclaim, Mr.

Seifert seeks legal remedies in connection with the Company’s June 22, 2021, termination of his employment.

Seifert also claims Retaliatory Discharge under Florida’s Private Whistleblower Act, Defamation, and Negligent Misrepresentation.

A jury trial is set to occur during the trial court's two -week trial calendar, starting August 21, 2024.

On October 28, 2024, Alan Jay Weisberg, the former Chief Executive Officer and Chairman of Progressive Care Inc.

(“RXMD”), filed a putative class action suit on behalf of himself and all other former RXMD stockholders against NextPlat, Charles M.

Fernandez, the Chief Executive Officer and a director of NextPlat, and Rodney Barreto, a director of NextPlat.

The complaint purports to allege a breach of fiduciary duty by NextPlat and Messrs.

Fernandez and Barreto in connection with the merger of RXMD with and into a wholly-owned subsidiary of NextPlat (the “Merger”), which Merger was completed on October 1, 2024 following approval by the stockholders of each of NextPlat and RXMD in stockholder meetings held on September 13, 2024 by NextPlat and RXMD, respectively.

Among other things, the complaint asserts that the consideration paid to Mr.

Weisberg and the other RXMD stockholders in connection with the Merger was insufficient.

The monetary relief requested in the complaint includes compensatory and rescissory damages in an unspecified dollar amount.

The complaint is pending in the Court of Chancery of the State of Delaware.

The caption is Alan Jay Weisberg v.

Fernandez, Rodney Barreto and Nextplat Corp., and the case number is C.A.

24 - 1097 -MTZ.

The Company’s management does not believe that the Weisberg’s claim is meritorious and plans to vigorously defend against the suit.

The Company is in the process of preparing a response to the complaint and has filed a motion to dismiss the complaint.

On October 15, 2024, the Company settled its ongoing lawsuit with Mr.

Thomas Seifert, the Company’s former Chief Financial Officer.

Under the terms of the settlement, the Company agreed to pay to Mr.

Seifert $ 150,000 and to reimburse him for legal costs in the amount of $ 600,000 .

In exchange, the Company and Mr.

Seifert each agreed to dismiss the lawsuit with prejudice and to release the other party from all claims.

On June 17, 2024, Progressive Care was notified of a potential claim that a former employee allegedly suffered a loss due to an alleged breach by Progressive Care of an employment contract with the former employee.

Management believes, based on discussions with its legal counsel, that Progressive Care has meritorious defenses against the former employee’s claim.

Since receipt of the notice of claim, Progressive Care filed a petition for arbitration against the former employee, asserting that it was the employee who breached the employment contract.

Progressive Care will prosecute its claims and will defend any counterclaims vigorously as Progressive Care believes it will prevail on the merits.

At this time, we cannot reasonably estimate the amount of the loss.

From time to time, the Company may become involved in litigation relating to claims arising out of our operations in the normal course of business.

The Company is not currently involved in any pending legal proceeding or litigation, and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which the Company is a party or to which any of the Company’s properties is subject, which would reasonably be likely to have a material adverse effect on the Company’s business, financial condition and operating results.

Other than the matter described above, the Company is not currently involved in any pending legal proceeding or litigation, and to the best of our knowledge, no governmental authority is contemplating any proceeding to which the Company is a party or to which any of the Company’s properties is subject, which would reasonably be likely to have a material adverse effect on the Company’s business, financial condition and operating results.

Related Party Transactions

As of December 31, 2024 , the accounts payable due to related party includes amounts due to David Phipps.

Total related party payments due as of December 31, 2023 and December 31, 2022 are $ 8,000 and $ 720 respectively.

Total related party payments due as of December 31, 2024 and December 31, 2023 were $ 18,000 and $ 8,000 , respectively.

Those related party payables are non-interest bearing and due on demand.

The Company uses an American Express account for Orbital Satcom Corp and an American Express account for GTC, both in the name of David Phipps who personally guarantees the balance owed.

For the year ended December 31, 2023 and 2022 , the Company employed two individuals related to Mr.

Phipps with gross wages totaling approximately $ 78,000 and $ 56,000 , respectively.

On July 12, 2022, the Company hired Lauren Sturges Fernandez, the spouse of Mr.

Fernandez, as Manager of Digital Assets.

Fernandez is an at-will employee with an annual salary of $ 95,000 .

On September 22, 2022, Mrs.

Fernandez’s title was changed to Chief of Staff and Special Assistant to the Chairman of the Board, with no change to her salary.

Previously Mrs.

Fernandez was a consultant and earned compensation for her services of $ 10,995 for the year ended December 31, 2022.

In April 2023, Mrs.

Fernandez’s annual salary increased to $ 125,000 , which was approved by the Board of Directors.

During the years ended December 31, 2024 and 2023 , the Company employed two individuals related to Mr.

Phipps with gross wages totaling approximately $ 130,000

$ 78,000 , respectively.

During the years ended December 31, 2024 and 2023, the Company employed two individuals related to Dr.

Pamela Roberts, Progressive Care’s Chief Operating Officer, with gross wages totaling approximately $ 89,000 and $ 72,000 , respectively.

During the years ended December 31, 2024 and 2023, the Company paid an annual salary of $ 125,000 to Lauren Sturges Fernandez, the spouse of Mr.

Fernandez, as Chief of Staff and Special Assistant to the Chairman of the Board.

During the year ended December 31, 2024, the Company’s majority owned subsidiary, Florida Sunshine, paid approximately $ 28,000 for inventory to a vendor to which Anthony Armas, a Director of the Company, has an ownership interest.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

January Offering.

The Company received gross proceeds from the sale of the Common Stock in the January Offering of approximately $ 7.2 million, which closed on January 5, 2022.

Approximately 73 % of funds raised in the Offering were secured from existing shareholders, and from members of the Company’s senior management and Board of Directors.

The following table represents the related party investment:

Position held at NextPlat

Shares of Common Stock Purchased

Aggregate Purchase Price

Executive Chairman and Chief Executive Officer

679,013 $ 2,200,002

Director and President of Orbsat.

Chief Executive Officer of Global Operations

46,297 $ 150,002

Douglas Ellenoff

Vice Chairman and Chief Business Development Strategist

46,297 $ 150,002

Shares are deemed to be indirectly beneficially owned through Sabrina Allan, Mr.

Ellenoff’s wife.

Ellenoff has the power to vote and dispose of the shares.

Louis Cusimano

15,433 $ 50,003

Senior Vice President – Mergers, Acquisitions and Special Projects

15,433 $ 50,003

On January 20, 2022, the Company appointed Rodney Barreto, to its Board.

Barreto was a participant of the January offering and purchased 370,701 shares of common stock for $ 3.24 per share or approximately $ 1.2 million.

Barreto’s investment represented 17 % of the total.

Progressive Care Inc .

15 unchanged sentences

In consideration of the concessions in the Debt Modification Agreement, Progressive Care issued 105,000 shares of its common stock to the purchasers of the Note, of which NextPlat, Charles Fernandez and Rodney Barreto, received 45,653 , 18,261 , and 18,261 shares, respectively, in each case after giving effect to a 1 -for- 200 reverse stock split enacted by Progressive Care on December 30, 2022.

On February 1, 2023, the Company entered into a Management Services Agreement with Progressive Care Inc.

(“Progressive Care”) to provide certain management and administrative services to Progressive Care for a $ 25,000 per month fee.

On February 1, 2023, the Company entered into a Management Services Agreement with Progressive Care to provide certain management and administrative services to Progressive Care for a $ 25,000 per month fee.

During May 2023 the management fee was reduced to $ 20,000 per month.

During the twelve months ended December 31, 2023 , the Company received $ 235,000 from Progressive Care as management fees.

The management fees in the amount of $ 120,000 for the six months ended December 31, 2023 are eliminated as a result of the Progressive Care consolidation as of July 1, 2023.

During the years ended December 31, 2024 and 2023, the Company received approximately $ 180,000 and $ 235,000 , respectively from Progressive Care as management fees.

On May 5, 2023, the Company entered into an SPA with Progressive Care Inc., pursuant to which the Company agreed to purchase 455,000 newly issued Units of securities from Progressive Care at a price per Unit of $ 2.20 for an aggregate purchase price of $ 1.0 million (the “Unit Purchase”).

18 unchanged sentences

The voting agreement is irrevocable and perpetual in term.

On October 1, 2024, at 12:01 Eastern time, the Merger became effective and Progressive Care merged with and into Mergers Sub and thereby became a wholly owned subsidiary of NextPlat.

Next Borough Capital Fund, LP.

1 unchanged sentence

The note bears interest at an annual rate of 7 %.

The outstanding principal balance of the note plus all accrued unpaid interest is due and payable on July 7, 2024, the Maturity Date.

The outstanding principal balance of the note plus all accrued unpaid interest was due and payable on July 7, 2024, the Maturity Date.

The Maturity Date was extended until November 8, 2024, which the note was paid in full at the net realizable value of approximately $ 206,000 , net of an allowance of approximately $ 63,000 .

Each of the Company, Charles M.

1 unchanged sentence

Keyser, Jr., eAperion Partners, LLC and a revocable trust of Rodney Barreto are members of the Borrower.

The balance outstanding on the note as of December 31, 2023 was approximately $ 256,000 .

The note is recorded in Notes Receivable Due From Related Party on the Balance Sheets.

December Offering.

On December 14, 2022, the Company closed a private placement for the sale of 4,575,429 units (each, a “Unit”), each Unit consisting of (i) one share of the Company’s common stock, $ 0.0001 par value per share (the “Common Stock”), and (ii) one warrant to purchase one share of Common Stock (each, a “Warrant”).

The offering price of the Units was $ 1.75 per Unit.

The Warrants included in the Units are exercisable at a price of $ 1.75 per share and expire three years from the date of issuance.

Related party investment represented 48 %, of the approximately $ 8.0 million of the funds raised.

Position held at NextPlat

Shares of Common Stock Purchased

Warrants to purchase Common Stock

Aggregate Purchase Price

eAperion Partners LLC, principal Charles M.

Executive Chairman and Chief Executive Officer

1,085,714 1,085,714 $ 1,900,000

Director and President of NextPlat.

Chief Executive Officer of Global Operations

28,500 28,500 $ 49,875

RLB Market Investments LLC, principal, Rodney Barreto

1,085,714 1,085,714 $ 1,900,000

The note was recorded in Notes Receivable Due From Related Party on the Balance Sheets.

NEXTPLAT CORP AND SUBSIDIARIES

5 unchanged sentences

The following table sets forth information as to each supplier that accounted for 10% or more of the Company’s purchases for the years ended December 31, 2024 and 2023 (in thousands):

December 31, 2023

December 31, 2022

$ 1,921 22.4 % $ 1,821 20.9 %

Globalstar Europe

$ 958 11.2 % $ 635 7.3 %

Network Innovations

$ 935 10.7 % $ 980 11.2 %

For the Years Ended December 31,

% of Total Purchases

Iridium Satellite

$ 1,602 16.8 % $ 913 10.9 %

Satcom Global

$ 1,242 13.0 % $ 1,921 22.4 %

Globalstar Europe

$ 975 10.2 % $ 958 11.2 %

The following table sets forth revenue as to each geographic location, for the years ended December 31, 2024 and 2023 (in thousands):

December 31, 2023

December 31, 2022

Years Ended December 31,

$ 6,812 49.4 % $ 6,687 60.9 %

1 unchanged sentence

4,529 32.8 % 2,575 23.4 %

South America

62 0.6 % 45 0.4 %

Asia and Pacific

1 unchanged sentence

683 5.0 % 143 1.3 %

South America

47 0.3 % 62 0.6 %

$ 13,791 100.0 % $ 10,977 100.0 %

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Healthcare Operations concentrations:

Progressive Care had significant concentrations with one vendor.

The purchases from this significant vendor were approximately 99.0 % of total vendor purchases for the six months ended December 31, 2023 .

The purchases from this significant vendor were approximately 98.0 % of total vendor purchases for the year ended December 31, 2024 .

Progressive Care’s trade receivables are primarily from prescription medications billed to various insurance providers.

Ultimately, the insured is responsible for payment should the insurance company not reimburse Progressive Care.

Progressive Care generated reimbursements from three significant PBMs for the six months ended December 31, 2023 :

Subsequent Events

On March 25, 2024, the Company entered into a Stock Purchase Agreement with James T.

McKinley to purchase all of the issued and outstanding shares of common stock of Outfitter Satellite, Inc., a Tennessee corporation ("Outfitter"), for aggregate consideration of $ 760,000 subject to adjustment (the "Outfitter Acquisition").

The closing of the Outfitter Acquisition occurred on April 1, 2024.

Outfitter provides consumers, commercial and government customers, with advanced satellite-based connectivity solutions from leading brands, including Iridium, Inmarsat and Globalstar.

Progressive Care generated reimbursements from three significant PBMs for the year ended December 31, 2024 :

Year Ended December 31, 2024

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 9A. Controls and Procedures