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Item 9A. Controls and Procedures

2026-03-31 compared with 2025-03-24 · 464 added, 685 removed, 995 unchanged (54% of the section changed)

1 unchanged sentence

(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.

Our management, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), as of December 31, 2025.

Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of December 31, 2025 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.

This conclusion was primarily due to the material weaknesses in our internal control over financial reporting described below.

(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.

Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met.

Further, no evaluation of controls can provide absolute assurance that misstatements due to errors or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

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

Any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that its objectives will be met.

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.

Accordingly, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to errors or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

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.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

generally accepted accounting principles.

Our internal control over financial reporting includes policies and procedures that:

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and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

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.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the Internal Control — Integrated Framework (2013) .

Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of December 31, 2025 due to the material weaknesses described below.

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.

Previously Identified Material Weakness - Inventory Valuation (Remediated)

As previously disclosed, we identified a material weakness related to controls over the valuation of inventory during 2024.

This material weakness resulted from deficiencies in the design and operations of controls over net realizable value (“NRV”) assessments, including insufficient formal policies, inadequate review controls, and limitation in the accuracy and completeness of data used in valuation analyses.

During the year ended December 31, 2025, we implemented enhances controls including (i) formalized policies and procedures to perform comprehensive NRV assessments for inventory at each reporting period;

(ii) quarterly documented review controls performed by senior management to evaluate the accuracy and completeness of NRV calculations;

and (iii) improvements to the accuracy and reliability of pricing and cost data used in NRV calculations by integrating reliable internal tracking mechanisms.

Based on management’s evaluation, including the operations of these controls for a sufficient period of time, management concluded that this material weakness was remediated as of December 31, 2025.

Material Weakness - Accounting Estimate of PBM Performance Bonus Receivable (Unremediated)

As of December 31, 2025, management identified a material weakness related to the accounting for the estimation and recording of a performance-based bonus receivable recorded at December 31, 2024 in connection with incentive arrangements with pharmacy benefit managers (“PBMs”).

This material weakness resulted from deficiencies in the design and operations of controls over significant accounting estimates, including the development and review of assumptions and inputs used to estimate performance-based receivables.

Material Weakness - PIPE Warrant Modification (Unremediated)

As of December 31, 2025, management identified a material weakness related to the accounting for the valuation of the modification of certain PIPE warrants.

This material weakness resulted from deficiencies in the design and operation of controls over the identification, evaluation, and accounting for modifications of equity-linked financial instruments.

Specifically, the Company did not maintain effective controls to ensure (i) timely identification of warrant modifications, (ii) appropriate evaluation of the accounting implications of such modifications, including the determination of whether the modification should be accounted for as an equity or liability transaction, and (iii) accurate valuation of the modified warrants using appropriate valuation techniques and assumptions.

In addition, the Company lacked sufficient technical accounting expertise to appropriately evaluate complex and non-routine transactions involving equity-linked instruments.

Remediation Plans

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

Management has outlined a remediation plan to ensure that the control deficiencies are remediated.

Management will continue to evaluate the design and operating effectiveness of the controls.

The material weaknesses will not be considered remediated until the controls have operated effectively for a sufficient period of time and management has completed testing to conclude that the controls are effective.

Accounting Estimate of PBM Performance Bonus Receivable

To address the material weakness related to the estimation of performance-based bonus receivables, management has initiated the following actions:

(i) establishing a standardized quarterly process for estimating performance-based bonus receivables, including documented estimates retrieved timely from third-party adherence data and performance metrics and (ii) designing and implementing documented review controls performed by senior management to evaluate the reasonableness of the estimate.

PIPE Warrant Modification

To address the material weakness related to the accounting for the valuation of the modification of certain PIPE warrants, specifically the extension of expiration dates, management has initiated the following actions:

(i) establishing controls to ensure timely identification of modifications to outstanding warrants, including enhanced coordination and communication protocols between finance, legal, and executive management when contractual terms are amended;

(ii) implementing valuation controls requiring the preparation of detailed valuation analyses for modified warrants;

(iii) engaging qualified third-party valuation specialists to assist in the valuation of warrant modifications and to support management’s accounting conclusions for complex or non-routine transactions;

and (iv) designing and implementing documented review controls performed by individuals with appropriate technical expertise to evaluate classification conclusions, valuation methodologies and assumptions, and the completeness and accuracy of financial statement impacts.

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.

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(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 than the material weaknesses and the remediation plans described above, there were no other changes in our internal control over financial reporting during our fourth fiscal quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

Rule 10b5 - 1 Trading Arrangement

Amendment to PIPE Warrants

On November 5, 2025, the Company entered into a Universal Amendment to PIPE Warrants (the “Amendment”) with holders of the Company’s Common Stock Purchase Warrants (the “Warrants”) representing greater than fifty percent of the outstanding Warrants (based on the number of underlying warrant shares).

The Warrants were originally issued pursuant to a Securities Purchase Agreement dated December 8, 2022, and provided for an exercise period ending on December 14, 2025.

Pursuant to the Amendment, the exercise period of each Warrant was extended by twenty-four ( 24 ) months, such that the Warrants will now expire on December 14, 2027, instead of December 14, 2025.

All other terms and conditions of the Warrants remain unchanged and in full force and effect.

The Company determined the modification resulted in an incremental increase in fair value of the warrants of approximately $1.2 million, calculated using the Black-Scholes model immediately before and after the change.

As the modification was considered an inducement to holders to retain their investment, the incremental value of $1.2 million was recognized as a reduction of additional paid-in capital and recorded as a deemed dividend, impacting net income attributable to common stockholders for the year ended December 31, 2025.

The modified warrants remain classified as equity instruments in stockholders’ equity.

As consideration for the extension of the exercise period of the Warrants, each holder agreed to a release in favor of the Company and its related persons.

Specifically, each holder released and waived any and all claims, demands, obligations, liabilities, and causes of action, whether known or unknown, arising prior to the execution of the Amendment and relating to the Securities Purchase Agreement, the Registration Rights Agreement, the Warrants, any other transaction document, and the administration thereof.

The release extends to the Company and its parents, affiliates, participants, and their respective officers, directors, employees, agents, attorneys, accountants, consultants, successors, and assigns.

Settlement of Arbitration Proceeding

As previously disclosed, on June 17, 2024, Progressive Care was notified of a potential claim that a former employee (the “Claimant”) allegedly suffered a loss due to an alleged breach by Progressive Care of an employment contract with the Claimant.

Following receipt of the notice of claim, Progressive Care filed a petition for arbitration against the Claimant, asserting that it was the Claimant who breached the employment contract.

On November 7, 2025, Progressive Care entered into a Settlement Agreement (the “Settlement Agreement”) with the Claimant to resolve all disputes related to the employment and the arbitration proceeding.

Pursuant to the Settlement Agreement, Progressive Care paid the Claimant a total sum of $150,000 within seven days of execution.

In addition, Progressive Care transferred to the Claimant 128,205 shares of NextPlat common stock valued at $100,000.

The Settlement Agreement provides the Claimant with a one -time reverse stock-split protection mechanism, whereby, if the aggregate value of the transferred shares declines by more than 20% within sixty calendar days following a reverse stock split, Progressive Care will issue additional shares of NextPlat common stock to the Claimant to restore the aggregate value to the pre-split level, with such shares to be issued within ten days after the sixty -day period.

The Settlement Agreement includes mutual releases of all claims between the parties related to the arbitration and underlying disputes, with each party denying any admission of liability.

Within three days of execution, the parties will file a joint stipulation of dismissal of the arbitration with prejudice, with each party bearing its own fees and costs.

The Settlement Agreement contains mutual confidentiality and non-disparagement provisions, limiting disclosure of the Settlement Agreement and related information except as required by law or regulatory authorities.

The Settlement Agreement also includes standard provisions regarding amendments, venue, waiver of jury trial, severability, execution in counterparts, binding effect on successors, and a requirement for good faith cooperation.

In addition, the Settlement Agreement provides that simultaneously with the execution of the Settlement Agreement, the parties entered into a one year Consulting Agreement pursuant to which Progressive Care engaged the Claimant as a consultant with an annual base fee of $150,000.

Pursuant to the Consulting Agreement, the Claimant will also be eligible for incentive compensation for a percentage of new gross revenue with positive gross margins generated by the pharmacy’s long-term care business and gross collections from 340B eligible business generated by the Claimant.

A copy of the Settlement Agreement is filed with this Form 10 -K as Exhibit 10.40 and is incorporated herein by reference.

The foregoing description of the Settlement Agreement is qualified in its entirety by reference to the full text thereof.

Rule 10b5 - 1 Trading Arrangements

During the three months ended December 31, 2025 , 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 JURISDICATIONS THAT PREVENT INSPECTIONS

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

DIRECTORS, EXECUTIVE OFFICES AND CORPORATE GOVERNANCE

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2025 .

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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.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information in Item 5 of this Form 10-K regarding our Equity Compensation Plans is incorporated herein by reference.

The remainder of the information required by this item is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2025.

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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Documents filed as part of this report.

Documents filed as part of this Annual Report on Form 10-K.

Financial Statements.

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Financial Statements Schedules.

Placement Agency Agreement dated December 9, 2022, by and between the Company and Dawson James Securities, Inc.

(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).

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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 of Universal Amendment to PIPE Warrants, dated as of November 5, 2025, by and among the Company and various holders of the PIPE Warrants (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed on November 13, 2025).

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

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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).

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.

Fernandez Employment Agreement, dated May 23, 2021 (incorporated by reference to Exhibit 10.20 to Amendment No.4 to the Company’ s Registration Statement on Form S-1 filed with the SEC on May 25, 2021, File No.

Fernandez Employment Agreement, dated June 2, 2021 (incorporated by reference to Exhibit 10.3 to the Company’ s Quarterly Report filed with the SEC on August 17, 2021).

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).

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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).

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).

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).

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 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).

Stock Option Agreement dated December 5, 2022, and effective as of November 7, 2022, by and between the Company and Robert Bedwell (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K Filed on December 5, 2022).

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).

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)

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.

(incorporated by reference from Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2023) .

First Amendment to Employment Agreement, dated as of June 29, 2023, by and between NextPlat Corp and Cecile Munnik (incorporated by reference from Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2023) .

(incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2023) .

Distribution Agreement, dated as of October 12, 2023, by and between OPKO Health Spain, S.L.U.

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.

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

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

Amended Director Agreement, dated as of October 1, 2024, by and between the Company and Hector Delgado (incorporated by reference to Exhibit 10.36 to the Company's Annual Report on Form 10-K filed on March 24, 2025) .

Independent Director Agreement, dated as of October 1, 2024, by and between the Company and Douglas Ellenoff (incorporated by reference to Exhibit 10.37 to the Company's Annual Report on Form 10-K filed on March 24, 2025).

Independent Director Agreement, dated as of October 1, 2024, by and between the Company and Anthony Armas (incorporated by reference to Exhibit 10.38 to the Company's Annual Report on Form 10-K filed on March 24, 2025).

Director Agreement, dated as of August 13, 2025, by and between the Company and Lauren Sturges Fernandez (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2025).

Settlement Agreement, dated November 7, 2025, by and between Progressive Care, LLC and Claimant (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q filed on November 13, 2025.

Employment Agreement, dated as of January 9, 2026, between NextPlat Corp and Amanda Ferrio (incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K/A filed on January 13, 2026) .

David Phipps Stock Award Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K/A filed with the Commission on October 3, 2024).

Amendment No.

1 to David Phipps Employment Agreement (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K/A filed with the Commission on October 3, 2024).

Consulting Agreement, dated as of December 1, 2025, by and between NextPlat Corp and Barreto Group, Inc.

(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 9, 2025).

Insider Trading Policy

Subsidiaries of NextPlat Corp.

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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.

Inline 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, 2025, 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.

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and 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).

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+ Management contract or compensatory plan or arrangement.

† Certain portions of this exhibit have been

redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

The Company hereby undertakes to furnish an unredacted copy of the exhibit upon request by the SEC.

FORM 10-K SUMMARY

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.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

March 31, 2026

NEXTPLAT CORP

/s/ Charles M.

Executive Chairman and Chief Executive Officer (Principal Executive Officer)

/s/ Cecile Munnik

Cecile Munnik

/s/ David Phipps

Chief Executive Officer and President (Principal Executive Officer)

/s/ Amanda Ferrio

Amanda Ferrio

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.

/s/ Charles M.

Chief Executive Officer and Executive Chairman

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.

/s/ David Phipps

Chief Executive Officer and President, Director

March 31, 2026

(Principal Executive Officer)

/s/ Cecile Munnik

/s/ Amanda Ferrio

Chief Financial Officer

March 31, 2026

Cecile Munnik

Amanda Ferrio

(Principal Financial and Accounting Officer)

/s/ David Phipps

President and Chief Executive Officer of Global Operations and Director

/s/ Rodney Barreto

March 31, 2026

Rodney Barreto

/s/ Douglas S.

Vice Chairman and Chief Business Development Strategist and Director

Vice Chairman

March 31, 2026

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Hector Delgado

/s/ Elizabeth Alcaine

March 21, 2025

Elizabeth Alcaine

/s/ Louis Cusimano

March 21, 2025

Louis Cusimano

/s/ Jervis Bennett Hough

March 21, 2025

Jervis Bennett Hough

/s/ Rodney Barreto

March 21, 2025

Rodney Barreto

/s/ Anthony Armas

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Anthony Armas

/s/ Lauren Sturges Fernandez

March 31, 2026

Lauren Sturges Fernandez

NEXTPLAT CORP AND SUBSIDIARIES

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Consolidated Balance Sheets as of December 31, 2025 and 2024

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

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2025 and 2024

Consolidated Statements of Equity for the Years Ended December 31, 2025 and 2024

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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, 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).

We have audited the accompanying consolidated balance sheets of NextPlat Corp and Subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, equity and cash flows for each of the two years in the period ended December 31, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

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.

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

Critical Audit Matter Description

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 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;

(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.

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.

The critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved especially challenging, subjective, or complex auditor judgments.

We determined that there are no critical audit matters.

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

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CONSOLIDATED BALANCE SHEETS

(In thousands, except shares and par data)

(In thousands, except shares and par value data)

December 31, 2025

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Accounts receivable, net

Receivables - other, net

Receivables - other

Inventory, net

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Prepaid expenses

Notes receivable due from related party

Total Current Assets

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Finance right-of-use assets, net

Prepaid expenses, net of current portion

Total Other Assets

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Operating lease liabilities, net of current portion

Finance lease liabilities, net of current portion

Total Liabilities

Commitments and Contingencies

Preferred stock ($ 0.0001 par value;

3,333,333 shares authorized;

no shares issued or outstanding)

Common stock ($ 0.0001 par value;

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( 118 ) ( 66 )

Equity attributable to NextPlat Corp stockholders

Treasury stock (at cost, 130,549 shares at December 31, 2025 and no shares at December 31, 2024, respectively)

Equity attributable to common stockholders

17,308 27,283

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NEXTPLAT CORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands, except per shares data)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data )

Years Ended December 31,

Sales of products, net

$ 49,665 $ 55,540

Revenues from services

54,322 66,082

Cost of products

43,374 49,033

Cost of services

Cost of revenue

43,416 49,074

10,906 17,008

Operating expenses:

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Salaries, wages and payroll taxes

10,707 13,303

Impairment loss

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Depreciation and amortization

Intangible asset amortization

Loss on settlement of litigation

Total operating expenses

19,906 40,033

Loss before other (income) expense

( 9,000 ) ( 23,025 )

Other (income) expense:

Gain on sale or disposal of property and equipment

Loss (gain) on sale or disposal of property and equipment

Interest expense

Interest earned

( 358 ) ( 731 )

Contingent loss on settlement of litigation

Asset write-off

Foreign currency exchange rate variance

Total other (income) expense

Total other expense (income)

1,463 ( 570 )

Loss before income taxes

Loss before equity in net loss of affiliate

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

Equity in net loss of affiliate

( 10,463 ) ( 22,455 )

( 10,463 ) ( 22,526 )

Deemed dividend

Net loss attributable to non-controlling interest

Net loss attributable to NextPlat Corp

Net loss attributable to common stockholders

$ ( 11,712 ) $ ( 13,426 )

Comprehensive loss:

$ ( 10,463 ) $ ( 22,526 )

Foreign currency loss

Comprehensive loss

$ ( 10,515 ) $ ( 22,529 )

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

$ ( 11,712 ) $ ( 13,426 )

Weighted number of common shares outstanding – basic and diluted

26,535 20,614

Basic and diluted loss per share

$ ( 0.44 ) $ ( 0.65 )

See accompanying notes to consolidated financial statements.

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YEARS ENDED December 31, 2025 AND 2024

(In thousands )

Stockholders’

(In thousands, except par value )

Treasury Stock

$0.0001 Par Value

Comprehensive

Stockholders'

Noncontrolling

Income (Loss)

NextPlat Corp

Balance, December 31, 2023

Issuance of common stock related to April offering

Issuance of common stock related to exercise of warrants

Issuance of common stock related to restricted stock award

Stock-based compensation in connection with options granted

Stock-based compensation in connection with warrants granted

Acquisition of subsidiary and noncontrolling interests

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

— — 455 — — — — 455 — 455

Stock-based compensation in connection with restricted stock awards

220 — 772 — — — — 772 405 1,177

Capital contribution of noncontrolling interests

- — — — — — — — 122 122

Issuance of common stock related to exercise of warrants

48 — 85 — — — — 85 — 85

Issuance of common stock related to Progressive Care Merger

6,970 1 7,215 — — — — 7,216 ( 7,216 ) -

Comprehensive loss

— — — — ( 3 ) — — ( 3 ) — ( 3 )

— — — ( 13,426 ) — — — ( 13,426 ) ( 9,100 ) ( 22,526 )

Balance, December 31, 2024

25,963 3 75,697 ( 48,351 ) ( 66 ) — — 27,283 114 27,397

Stock-based compensation in connection with options granted

— — 11 — — — — 11 — 11

Stock-based compensation in connection with warrants granted

— — 44 — — — — 44 — 44

Stock-based compensation in connection with restricted stock awards

805 — 585 — — — — 585 — 585

Shares repurchased

— — — — — ( 131 ) ( 100 ) ( 100 ) — ( 100 )

Comprehensive loss

— — — — ( 52 ) — — ( 52 ) — ( 52 )

Deemed dividend

— — 1,249 ( 1,249 ) — — — — — —

— — — ( 10,463 ) — — — ( 10,463 ) — ( 10,463 )

Balance, December 31, 2025

26,768 $ 3 $ 77,586 $ ( 60,063 ) $ ( 118 ) ( 131 ) $ ( 100 ) $ 17,308 $ 114 $ 17,422

See accompanying notes to consolidated financial statements.

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Cash received from e-Commerce Operations revenue

$ 18,813 $ 13,544

Cash received from Healthcare Operations revenue

39,638 57,282

Cash received from interest income

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Cash paid for inventory purchases and other costs of revenue

( 47,017 ) ( 48,863 )

Cash paid for salaries and related expenses

( 10,310 ) ( 11,441 )

Cash paid for other recurring operating expenses

( 6,919 ) ( 13,412 )

Cash paid for other non-recurring expenses and merger costs

( 839 ) ( 3,418 )

Cash paid for interest expense

( 64 ) ( 81 )

Cash paid for income taxes

Cash paid for merger costs and other non-recurring expenses

( 35 ) ( 156 )

Net cash used in operating activities

( 6,130 ) ( 5,464 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

Capital contributions to equity method investee

( 71 ) ( 189 )

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

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayments of note payable, related party, net

Issuance of common stock for PIPE transaction

Repayments of notes payable

( 120 ) ( 111 )

Acquisition of issued common stock held in treasury

Payments on finance lease liabilities

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

Net cash (used in) provided by financing activities

Effect of exchange rate on cash

Net (decrease) increase in cash

Net decrease in cash

( 6,251 ) ( 6,347 )

Cash beginning of year

19,960 26,307

Cash end of year

$ 13,709 $ 19,960

Reconciliation of net loss to cash flow used by operating activities

$ ( 10,463 ) $ ( 22,526 )

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

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Change in allowance for credit losses

( 101 ) ( 131 )

Change in inventory reserve

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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

Loss (gain) on sale or disposal of property and equipment

Change in operating assets and liabilities:

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Unbilled revenue

( 55 ) ( 48 )

Prepaid expense

Notes receivable

VAT receivable

Accounts payable and accrued expenses

1,173 ( 6,035 )

Operating lease liabilities

( 522 ) ( 427 )

Income taxes payable

( 42 ) ( 85 )

Contract liabilities

Liabilities from discontinued operations

Net cash used in operating activities

$ ( 6,130 ) $ ( 5,464 )

See accompanying notes to consolidated financial statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Organization and Nature of Operations.

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, 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.

Organization and Nature of Operations.

NextPlat Corp is a Nevada corporation (the “Company”, “NextPlat”, “we”) reporting on the Nasdaq Capital Market exchange that has business segments operating in the e-Commerce and Healthcare sectors.

It was incorporated in 1997 with executive offices located in Hallandale Beach, Florida.

e-Commerce Operations:

The Company operates three main e-Commerce websites as well as 25 third -party e-Commerce storefronts on platforms such as Alibaba, Amazon, Mercado Libre, and Walmart.

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

NextPlat has announced its intention to broaden its e-commerce platform and is implementing a comprehensive system upgrade to support this initiative.

We provide a comprehensive array of Satellite Industry communication services and related equipment sales.

Additionally, we provide a comprehensive array of satellite enabled communication services and related equipment sales.

Our wholly owned subsidiary, Global Telesat Communications Limited (“GTC”), was formed under the laws of England and Wales in 2008.

On February 19, 2015, we entered into a share exchange agreement with GTC and all of the holders of the outstanding equity of GTC pursuant to which we acquired all of the outstanding equity in GTC.

GTC provides e-Commerce and satellite-enabled communication services on a global basis.

Our wholly owned subsidiary, Orbital Satcom Corp.

(“Orbital Satcom”), a Nevada corporation, was formed on November 14, 2014.

On June 22, 2022, NextPlat B.V.

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

NXPLBV was liquidated on December 28, 2023.

Orbital Satcom provides e-Commerce and satellite enabled communication services to customers in the U.S.

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.

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.

The Outfitter acquisition was completed to expand the Company’s satellite enabled communication services in the U.S.

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

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

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.

Healthcare Operations:

The Company’s Healthcare segment operates through a wholly owned entity, Progressive Care, LLC, (“Progressive”) a Nevada Limited Liability Company, which includes 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.

(“ClearMetrX”).

ClearMetrX is a personalized healthcare services and technology company that provides prescription pharmaceuticals and risk and data management services to healthcare organizations and providers.

Pharmco 901 was formed on November 29, 2005 as a Florida Limited Liability Company and is a 100 % owned subsidiary of Progressive Care.

Pharmco 901 was acquired by Progressive on October 21, 2010.

Progressive currently delivers prescriptions to Florida’s diverse population and ships medications to patients in states where they hold non-resident pharmacy licenses as well.

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

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

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

Pharmco 1103 is a pharmacy with locations in North Miami Beach and Orlando, Florida that provides Pharmco’s pharmacy services to Miami-Dade County, Broward County, the Orlando/Tampa corridor, and the Treasure Coast of Florida.

Progressive acquired all the ownership interests in Pharmco 1103 in a purchase agreement entered into on June 1, 2019.

Pharmco 1002 is a pharmacy located in Palm Springs, Florida that provides Pharmco’s pharmacy services to Palm Beach, St.

Pharmco pharmacies deliver prescriptions to Florida’s diverse population and currently holds Florida Community Pharmacy Permits at all Florida pharmacy locations.

Pharmco 901 is a pharmacy located in Hallandale Beach, Florida, and is licensed as a non-resident pharmacy in the following states:

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

Pharmco 1002 is a pharmacy located in Palm Springs, Florida that provides pharmacy services to Palm Beach, St.

Lucie and Martin Counties, Florida.

Progressive acquired all the ownership interests in Pharmco 1002 in a purchase agreement entered into on July 1, 2018.

FPRX is a pharmacy with locations in North Miami Beach and Orlando, Florida that provides pharmacy services to Miami-Dade County, Broward County, the Orlando/Tampa corridor, and the Treasure Coast of Florida.

Progressive acquired all the ownership interests in FPRX in a purchase agreement entered into on June 1, 2019.

ClearMetrX was formed on June 10, 2020 and provides third -party administration (“TPA”) services to 340B covered entities.

2 unchanged sentences

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

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.

Fernandez, Executive Chairman and Chief Executive Officer of the Company, and Rodney Barreto, Director of the Company, exercised common stock purchase warrants issued by Progressive Care (the “RXMD Warrants”) and were issued shares of Progressive Care common stock.

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

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

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

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 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 Progressive Care common stock and equivalents.

The voting agreement is irrevocable and perpetual in term.

The exercise of the stock options, along with the entry into the voting agreement, resulted in a change in control of Progressive Care under the voting interest model in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combination, and was accounted for as a business acquisition.

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

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

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.

The accompanying Consolidated Financial Statements of the Company 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 subsidiaries.

Intercompany transactions and balances have been eliminated in consolidation.

Reclassifications

Effective January 1, 2025, the Company early adopted Accounting Standards Update (“ASU”) 2024 - 03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses”, on a retrospective basis, which resulted in reclassifications of certain expenses in the prior year period to conform to the current year presentation within cost of services, selling, general and administrative, salaries, wages and payroll taxes, and depreciation and amortization on the Consolidated Statements of Operations and Comprehensive Loss.

The reclassification of these certain expenses did not impact net loss for the prior year period.

Correction of Immaterial Misstatement

During the year ended December 31, 2025, the Company recorded an adjustment to correct an error in estimate to its previously issued financial statements regarding performance bonus revenue in the amount of approximately $ 0.6 million.

As of December 31, 2024, the Company understated receivables - other and sales of products by approximately $ 0.6 million.

Although the Company revised the financial statements for the period ended December 31, 2024, based on an analysis of ASC 250 “Accounting Changes and Error Corrections”, Staff Accounting Bulletin 99 “Materiality”, and Staff Accounting Bulletin 108 “Considering the Effects of Prior Year Misstatements in Current Year Financial Statements”, the Company has determined that this error was not material to the previously issued financial statements.

Any corrections from the 2024 period that were made in the year ended December 31, 2025 were not material.

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”).

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.

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

Use of Estimates

In preparing the Consolidated Financial Statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the periods then ended.

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 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, assumptions used in determining the potential impairment of long-lived assets, including intangible assets and goodwill, the estimate of the fair value of the lease liability and related right-of-use assets, inventory reserve estimates, and the estimates of the valuation allowance on deferred tax assets and corporate income taxes.

NEXTPLAT CORP AND SUBSIDIARIES

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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

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 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

Certain prior year amounts have been reclassified for consistency with the current year presentation.

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

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

On April 5, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an accredited investor (the “Investor”) for the sale by the Company in a private placement of 3,428,571 shares of the Company’s common stock, $ 0.0001 par value per share (the “Common Stock”).

The offering price of the Common Stock was $ 1.75 per share, the closing price of the Common Stock on April 4, 2023.

On April 11, 2023, the Private Placement closed.

Upon the closing of the Private Placement, the Company received gross proceeds of approximately $ 6.0 million.

The Company sold the Common Stock to the Investor in reliance on the exemption from registration afforded by Section 4 (a)( 2 ) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act and corresponding provisions of state securities or “blue sky” laws.

As of the date of this report, the Company’s existing cash resources and existing borrowing availability are sufficient to support planned operations for the next 12 months.

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.

The Company evaluated segment reporting in accordance with Accounting Standards Codification (“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.

1 unchanged sentence

(i) e-Commerce Operations and (ii) Healthcare Operations.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Business acquisitions

6 unchanged sentences

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 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.

All cash amounts in excess of $ 250,000 , approximately $ 1.1 million, are uninsured.

The Company has a deposit placement agreement for Insured Cash Sweep Service (“ICS”).

1 unchanged sentence

The Company believes that the ICS agreement will mitigate its credit risk as it relates to uninsured FDIC amounts in excess of $250,000.

Accounts Receivable and Allowance for Doubtful Accounts

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 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, 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.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Accounts Receivable and Allowance for Credit Losses

Trade accounts receivable are stated at amounts expected to be collected and primarily consist of amounts due from invoiced sales and reimbursements from third -party PBMs, insurance providers, and contracted facilities, based on contracted prices.

Trade accounts receivable are unsecured and require no collateral.

The Company maintains an allowance for credit losses based on its estimate of expected credit losses.

The estimate is based on historical loss experience, current economic conditions, and reasonable and supportable forecasts, and considers factors such as the aging of receivables, payor mix, and specific customer credit risk characteristics.

The Company periodically reviews the adequacy of the allowance through review of past due accounts and other relevant factors.

Accounts receivable balances are written off against the allowance for credit losses when they are deemed uncollectible and all reasonable collection efforts have been exhausted.

Inventories are valued at the lower of cost or net realizable value, using the first -in first -out cost method.

2 unchanged sentences

A change to the carrying value of inventories is recorded to cost of products.

Prepaid Expenses

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.

Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions.

The carrying value of our equity method investment is reported as “equity method investment” on the consolidated balance sheets.

The Company’s equity method investment is reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any.

The Company’s proportionate share of the net loss resulting from these investments is reported under the line item captioned “equity in net loss of affiliate” in the consolidated statements of operations and comprehensive loss.

Note 13 contains additional information on the equity method investment.

The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.

Foreign Currency Translation

The Company’s reporting currency is U.S.

The accounts of one of the Company’s subsidiaries, GTC, are 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 (“GBP”), 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 consolidated statements of comprehensive loss.

The relevant translation rates are as follows:

for the year ended December 31, 2024 , closing rate at $ 1.26 US$:

GBP, yearly average rate at $ 1.28 US$:

GBP, for the year ended December 31, 2023 closing rate at $ 1.27 US$:

GBP, yearly average rate at $ 1.24 US$:

Revenue Recognition and Unearned Revenue

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 Operations and Comprehensive Loss.

As of December 31, 2025

As of December 31, 2024

Closing rate $USD to GBP

$ 1.35 $ 1.26

Quarterly average rate $USD to GBP

$ 1.33 $ 1.28

Yearly average rate $USD to GBP

$ 1.32 $ 1.28

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Revenue Recognition, Unbilled Revenue, and Contract Liabilities

e-Commerce Operations:

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.

Equipment sales revenue is recognized when the equipment is delivered to 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 delivered 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 are 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 Topic 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, Revenue from Contracts with Customers (“ASC 606” ), we perform the following five steps:

(i) identify the contract(s) with a customer;

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Contract liabilities are shown separately in the consolidated balance sheets as current liabilities.

At December 31, 2024 , we had contract liabilities of approximately $ 89,000 .

At December 31, 2023 , we had contract liabilities of approximately $ 42,000 .

At December 31, 2025 , we had contract liabilities of approximately $ 0.2 million.

At December 31, 2024 , we had contract liabilities of approximately $ 0.1 million.

NEXTPLAT CORP AND SUBSIDIARIES

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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.

The Company recognizes product sales from prescriptions dispensed to patients (customers) at the time the drugs are physically delivered to a customer or when a customer picks up their prescription, which is the point in time when control transfers to the customer.

The Company recognizes product revenue from prescriptions dispensed to patients (customers) at the time the drugs are physically delivered to a customer or when a customer picks up their prescription, which is the point in time when control transfers to the customer.

340B dispensing fees are a component of 340B contract revenue, which are recognized at the time the drugs are received by the patient, by either delivery or customer pick up.

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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 customer’s insurance provider.

Authorization is obtained electronically and a corresponding authorization number is issued by the customer’s insurance provider.

The Company is the agent in all of the 340B pharmacy dispensing service agreements transactions with 340B covered entities and not the principal in the transactions.

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.

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.

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 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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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.

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.

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Cost of Product Sales and Services

Cost of sales consists primarily of materials, airtime and overhead costs incurred internally and amounts incurred to contract manufacturers to produce our products, airtime and other implementation costs incurred to install our products and train customer personnel, and customer service and third -party original equipment manufacturer costs to provide continuing support to our customers.

Cost of Products and Services

Cost of revenue consists primarily of materials, airtime and overhead costs incurred internally and amounts incurred to contract manufacturers to produce our products, airtime and other implementation costs incurred to install our products and train customer personnel, and customer service and third -party original equipment manufacturer costs to provide continuing support to our customers.

There are certain costs which are deferred and recorded as prepaids, until such revenue is recognized.

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 comprehensive loss 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 in the Company’s Consolidated Statements of Operations and 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.

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Website development

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

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As of December 31, 2025 , there were no indications that the carrying amounts of our long-lived assets exceeded their respective fair values.

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

Derivatives are required to be recorded on the balance sheet at fair value.

These derivatives, including embedded derivatives in the Company’s structured borrowings, are separately valued and accounted for on the Company’s balance sheet.

Fair values for exchange traded securities and derivatives are based on quoted market prices.

Where market prices are not readily available, fair values are determined using market-based pricing models incorporating readily observable market data and requiring judgment and estimates.

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 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

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Stock-based Compensation

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).

Stock-based compensation is accounted for based on the requirements of ASC Topic 718, Compensation - Stock Compensation, 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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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 Topic 740 - 10 related to Accounting for Uncertain Income Tax Positions.

The Company follows the provision of ASC 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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Tax positions taken are not offset or aggregated with other positions.

Tax positions that meet the more likely than not recognition threshold is measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority.

Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority.

The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

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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.

Under this guidance, the Company determines 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.

Arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate.

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Accounting Pronouncements Recently Adopted

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.

In July 2023, the FASB issued ASU 2023 - 03, “Presentation of Financial Statement (Topic 205 ), Income Statement - Reporting Comprehensive Income (Topic 220 ), Distinguishing Liabilities from Equity (Topic 480 ), Equity (Topic 505 ), and Compensation - Stock Compensation (Topic 718 )”, to amend various SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin No.

120, among other things.

The Company adopted this conforming guidance upon issuance and the adoption had no material impact on our consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016 - 13, “Financial Instruments – Credit Losses (Topic 326 ) Measurement of Credit Losses on Financial Instruments” (“ASU 2016 - 13” ), which introduces an impairment model based on expected, rather than incurred, losses.

Additionally, it requires expanded disclosures regarding (a) credit risk inherent in a portfolio and how management monitors the portfolio’s credit quality;

(b) management’s estimate of expected credit losses;

and (c) changes in estimates of expected credit losses that have taken place during the period.

In November 2018, the FASB issued ASU 2018 - 19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses.” This ASU clarifies receivables from operating leases are accounted for using the lease guidance and not as financial instruments.

In April 2019, the FASB issued ASU 2019 - 04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” This ASU clarifies various scoping and other issues arising from ASU 2016 - 13.

In March 2020, the FASB issued ASU 2020 - 03, “Codification Improvements to Financial Instruments.” This ASU improves the Codification and amends the interaction of Topic 842 and Topic 326.

ASU 2016 - 13 and related amendments are effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

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 ):

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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.

The amendments to Subtopic 220 - 40 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 Company early adopted this ASU, effective January 1, 2025, on a retrospective basis.

The amendments are presentation matter revisions and did not have an impact on the Company’s financial condition, results of operations, or cash flows.

This includes a tabular reconciliation using both percentages and reporting currency amounts, covering various tax and reconciling items, and disaggregated summaries of income taxes paid during the period.

ASU 2023 - 09 is required to be adopted for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company will adopt this accounting standard update effective January 1, 2025.

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.

The Company adopted this accounting standard update effective January 1, 2025 and did not have an impact on the Company’s financial condition, results of operations, or cash flows.

Accounting Pronouncements Issued but not yet Adopted

In December 2025, the FASB issued ASU 2025 - 11, “Interim Reporting (Topic 270 ):

Narrow-Scope Improvements,” which is intended to clarify and improve the guidance in Topic 270, Interim Reporting.

The amendments clarify the applicability of interim reporting guidance, the types of interim reporting, the form and content of interim financial statements and notes prepared in accordance with U.S.

GAAP, and establish a principle for disclosing events and changes since the end of the last annual reporting period that have a material impact on the entity.

The amendments are not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements.

ASU 2025 - 11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities, with early adoption permitted.

The Company has not yet adopted ASU 2025 - 11 and does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025 - 12, “Codification Improvements,” which includes numerous amendments across a broad range of Topics to clarify existing guidance, correct errors, and otherwise improve the usability and consistency of the Accounting Standards Codification.

Key areas addressed include clarifications to the diluted earnings per share calculation when a loss from continuing operations exists, clarification of disclosure requirements for lease receivables arising from certain leases, revisions to the reference amount for beneficial interests, and other technical improvements.

ASU 2025 - 12 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted.

The Company does not expect the adoption of ASU 2025 - 12 to have a material impact on its consolidated financial statements.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

Identifiable net assets acquired:

Accounts receivable, net

Prepaid expenses

Property and equipment, net

Right of use assets, net

Intangible assets, net:

Trade name (1)

Customer records (2)

Accounts payable and accrued expenses

Notes payable and accrued interest - current portion

Lease liabilities - current portion

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 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 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 .

Income Tax Legislation

On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (“OBBBA”), which included amendments to certain provisions of the Internal Revenue Code.

OBBBA included provisions that affect research and development expenditures, bonus depreciation, the Section 163 (j) business interest expense limitation, and the calculation of the Corporate Alternative Minimum Tax.

In addition, the OBBBA imposes a 1% excise tax on certain stock repurchases, which is accounted for as a non-income tax expense and recognized within operating expenses when incurred.

In accordance with ASC 740, Income Taxes, the Company evaluated at the enactment date the impact of the legislation on its income tax accounting, including the measurement of deferred tax assets and deferred tax liabilities and valuation allowance.

Because the Company maintains a full valuation allowance against its net deferred tax assets, the enactment of the OBBBA did not have a material effect on the Company’s consolidated financial statements for the year ended December 31, 2025.

Subsequent Events

The Company has evaluated subsequent events through the date of this filing, the date the consolidated financial statements were available to be issued.

Management has determined that there are no subsequent events that require recognition or disclosure in the consolidated financial statements.

Liquidity, Going Concern, and Management's Plans

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company has incurred recurring operating losses and historically generated negative operating cash flows.

These conditions initially raised substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the issuance of these consolidated financial statements.

Management has evaluated plans intended to mitigate these conditions, including expanding the Company’s long-term care pharmacy operations, increasing 340B contract pharmacy revenue, continuing the development of institutional medication fulfillment contracts, and optimizing operational efficiencies.

Based on management’s projections of operating results and cash flows, the Company’s current liquidity position, and management’s evaluation of its plans, management believes it is probable that these plans will be effectively implemented and will mitigate the conditions that initially raised substantial doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NEXTPLAT CORP AND SUBSIDIARIES

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The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments:

Cash, accounts receivable, and accounts payable and accrued liabilities:

Cash, accounts receivable, receivables other, accounts payable and accrued liabilities, and contract liabilities:

The amounts reported in the accompanying Consolidated Balance Sheets approximate fair value due to their short-term nature.

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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.

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Healthcare Operations

Sales of products, net

e-Commerce revenue

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— 35,704 35,704

13,791 41,308 55,099

Revenues from services:

Pharmacy 340B contract revenue

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Healthcare Operations

Sales of products, net

e-Commerce revenue

2 unchanged sentences

— 41,907 41,907

10,977 21,412 32,389

Revenues from services:

Pharmacy 340B contract revenue

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Years Ended December 31,

Net loss attributable to NextPlat Corp common shareholders

Net loss attributable to common stockholders

$ ( 11,712 ) $ ( 13,426 )

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Accounts Receivable

At December 31, 2024 and 2023 , accounts receivable consisted of the following (in thousands):

Accounts Receivable, net

Accounts receivable, net consisted of the following (in thousands):

December 31, 2025

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$ 4,014 $ 4,895

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.

The Company decreased the allowance for credit losses in the amount of approximately $ 0.1 million and $ 0.1 million for the years ended December 31, 2025 and 2024 , respectively.

Accounts receivable - trade, net for the Company as of January 1, 2024 was approximately $ 8.9 million.

Receivables - Other, net

At December 31, 2024 and 2023 , receivables - other, net consisted of the following (in thousands):

Receivables - Other

Receivables - other consisted of the following (in thousands):

December 31, 2025

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$ 1,930 $ 1,331

Performance bonuses, paid annually by PBMs, are estimated based on historical pharmacy performance and prior payments received.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

At December 31, 2024 and 2023 , inventories consisted of the following (in thousands):

Inventory, net consisted of the following (in thousands):

December 31, 2025

5 unchanged sentences

$ 3,396 $ 4,881

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, 2024

$ 2,160 $ 2,160

Website development

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Leasehold improvements

Computer equipment

Rental equipment

Construction in progress

Computer equipment

Property and equipment gross

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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):

e-Commerce Operations

Healthcare Operations

Goodwill, net as of December 31, 2022

Changes in Goodwill during the year ended December 31, 2023:

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 - Outfitter acquisition

Deferred tax effect of intangible basis difference (1)

Impairment losses

— ( 731 ) ( 731 )

Balances as of December 31, 2024

156 14,626 14,782

Accumulated impairment losses

— ( 14,626 ) ( 14,626 )

Goodwill, net as of December 31, 2024

$ 156 $ — $ 156

( 1 ) Decrease related to book tax difference of intangible assets arising for the business acquisition of Outfitter.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Goodwill was approximately $ 0.2 million at December 31, 2025 and December 31, 2024.

There were no changes in the carrying amount of goodwill during the year ended December 31, 2025.

The Company performed its goodwill impairment assessment during the year ended December 31, 2025 and determined that there were no indications of impairment.

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):

Intangible assets, net as of December 31, 2025 and 2024 related to Outfitter and consisted of the following (in thousands):

December 31, 2025

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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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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):

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 periods presented is as follows (in thousands):

e-Commerce Operations

4 unchanged sentences

( 326 ) — ( 326 )

25 14,398 14,423

Changes during the year ended December 31, 2025:

Outfitter acquisition

Accumulated amortization expense

( 101 ) ( 1,608 ) ( 1,709 )

Impairment - gross amount

— ( 15,710 ) ( 15,710 )

Impairment - accumulated amortization

Amortization expense

( 102 ) — ( 102 )

4 unchanged sentences

$ 422 $ — $ 422

For the year ended December 31, 2024 and 2023, the Company recognized amortization expense of approximately $ 1.7 million and $ 1.3 million, respectively.

For the years ended December 31, 2025 and 2024 , the Company recognized amortization expense of approximately $ 0.1 million and $ 1.7 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, 2025 (in thousands):

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Equity Method Investment

On August 30, 2022, NextPlat entered into a Securities Purchase Agreement (the “SPA”) between NextPlat and Progressive Care, under which NextPlat, its Executive Chairman and Chief Executive Officer, Charles M.

Fernandez, board member, Rodney Barreto, and certain other investors invested an aggregate of $ 8.3 million into Progressive Care.

In connection with the SPA, NextPlat purchased 3,000 newly issued Units of Progressive Care valued at $ 6 million, with each Unit comprised of one share of Progressive Care’s Series B Convertible Preferred Stock, $ 0.001 par value, and one Investor Warrant to purchase a share of Progressive Care Series B Convertible Preferred Stock at an exercise price of $ 2,000 The Investor Warrants may also be exercised, in whole or in part, by means of a cashless exercise.

The Progressive Care Series B Convertible Preferred Stock has a stated value of $ 2,000 per share and each share has the equivalent voting rights of 500 shares of Progressive Care common stock (after giving effect to the Reverse Stock Split described below).

Each share of Progressive Care Series B Convertible Preferred Stock is convertible at any time at the option of the holder into shares of Progressive Care common stock determined by dividing the stated value by the conversion price which is $ 4.00 (after giving effect to the Reverse Stock Split described below).

Also, pursuant to the SPA, Messrs.

Fernandez and Barreto were nominated for election to Progressive Care’s Board of Directors.

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

Fernandez and Barreto, and certain other investors (collectively, the “NextPlat Investors”) entered into a Modification Agreement wherein the terms were modified for an existing Secured Convertible Promissory Note (the “Note”) originally held by a third party note holder and sold to the NextPlat Investors.

The NextPlat Investors purchased the Note as part of a Confidential Note Purchase and Release Agreement between the former note holder and the NextPlat Investors.

As of the date of the SPA, the aggregate amount of principal and interest outstanding on the Note was approximately $ 2.8 million.

As part of the Modification Agreement, various terms of the Note were modified, among them, the Conversion Price for the Note was modified to a fixed price of $ 4.00 per share of common stock (after giving effect to the Reverse Stock Split described below).

In addition, the Note was modified to provide for mandatory conversion upon the later to occur of (a) the completion of the Company’s reverse stock split, and (b) the listing of the Company’s common stock on a national exchange, including the Nasdaq Capital Market, the Nasdaq Global Market, or the New York Stock Exchange.

On September 13, 2022, the Progressive Care Board of Directors appointed Charles M.

Fernandez as Chairman of the Board of Directors and Rodney Barreto as the Vice Chairman of the Board of Directors.

In connection with these appointments, Alan Jay Weisberg, Progressive Care’s current Chairman and Chief Executive Officer, was appointed to serve as a Vice Chairman.

On September 12, 2022, two of Progressive Care’s Directors, Birute Norkute and Oleg Firer, resigned as Directors.

On October 7, 2022, the Progressive Care Board of Directors unanimously voted to approve the appointment of Pedro Rodriguez, MD to the Board.

Rodriguez was nominated to the Progressive Care Board by NextPlat.

On November 11, 2022, Mr.

Weisberg resigned from his positions as Progressive Care’s Chief Executive Officer and co-Vice-Chairman of the Board of Directors.

On the same date, the Board appointed Mr.

Fernandez to serve as the new Chief Executive Officer immediately.

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 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.

On May 5, 2023, NextPlat entered into a Securities Purchase Agreement (the “SPA”) with Progressive Care, pursuant to which the Company 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 (“Common Stock”) 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 at $ 2.20 per share of Common Stock.

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”).

Pursuant to the DCA, NextPlat and the other Holders agreed to convert the total approximately $ 2.9 million of outstanding principal and accrued and unpaid interest to Common Stock at a conversion price of $ 2.20 per share.

NextPlat received 570,599 shares issued upon conversion of the Note.

In addition, NextPlat received a warrant to purchase one share of Common Stock for each share of Common Stock they received upon conversion of the Note (the “Conversion Warrants”).

The Conversion Warrants have a three -year term and are immediately exercisable at $ 2.20 per share of Common Stock.

At the same time, Progressive Care and NextPlat entered into a First Amendment (the “Amendment”) to that certain Securities Purchase Agreement dated November 16, 2022 ( the “Debenture Purchase Agreement”).

Under the Debenture Purchase Agreement, Progressive Care agreed to issue, and NextPlat Corp agreed to purchase, from time to time during the three -year term of the Debenture Purchase Agreement, up to an aggregate of $ 10 million of secured convertible debentures from Progressive Care (the “Debentures”).

Pursuant to the Amendment, NextPlat and Progressive Care agreed to amend the Debenture Purchase Agreement and the form of Debenture to have a conversion price of $ 2.20 per share.

At present, no Debentures have been purchased by NextPlat under the Debenture Purchase Agreement.

As a result of the common stock purchase warrant exercises and the entry into the voting agreement as described in Note 4, NextPlat 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.

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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following summarizes the Company’s consolidated balance sheet description equity method investment as follows as of December 31, 2023 ( in thousands):

Carrying Amount

December 31, 2022, beginning balance

Investment in Progressive Care Inc.

and Subsidiaries

Gain on equity method investment

Portion of loss from Progressive Care, Inc.

and Subsidiaries

Depreciation expense due to cost basis difference (1)

Interest earned from convertible note receivable

Interest earned from amortization of premium on convertible note receivable

Elimination of intercompany interest earned

Change in accounting method as of July 1, 2023

December 31, 2023, carrying amount

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

Portion of loss from Progressive Care, Inc.

and Subsidiaries

Depreciation expense due to cost basis difference (1)

Interest earned from convertible note receivable

Interest earned from amortization of premium on convertible note receivable

Elimination of intercompany interest earned

Equity in net loss of affiliate

( 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

4 unchanged sentences

$ 5,812 $ 6,596

Accrued litigation

Accrued wages and payroll liabilities

Accrued other liabilities

Customer deposits payable

Accrued PBM fees

Accrued other liabilities

$ 8,265 $ 7,230

16 unchanged sentences

The promissory note is collateralized by the land and building, bears interest at a fixed rate of 4.75 % per annum, matures on December 14, 2028 and is subject to a prepayment penalty.

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.

Principal and interest are 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.

The carrying value of the land and building was approximately $ 2.2 million as of December 31, 2025.

NEXTPLAT CORP AND SUBSIDIARIES

6 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 six years from the date of drawdown, July 15, 2026, the “Maturity Date”.

The Debenture has a term of six years from the drawdown date and is scheduled to mature on 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.

3 unchanged sentences

Upon the occurrence of an Event of Default, the Debenture becomes payable upon demand.

The balance outstanding as of December 31, 2024 on the note payable was approximately $ 132,000 .

In April 2021, 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 $ 30,000 .

During September 2021, pharmacy equipment was returned since the installation was cancelled and the note was amended.

The amended promissory note payable requires 46 monthly payments of $ 331 , including interest at 6.9 %.

The balance outstanding as of December 31, 2024 and 2023 on the note payable was approximately $ 2,000 and $ 6,000 , respectively.

The balance outstanding on the note payable was approximately $ 39,000 and $ 132,000 as of December 31, 2025 and 2024 , 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 .

1 unchanged sentence

The balance outstanding on the note payable was approximately $ 39,000 and $ 58,000 as of December 31, 2025 and 2024 , 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.

Principal outstanding as of December 31, 2025 , is expected to be repayable as follows (in thousands):

3 unchanged sentences

As of December 31, 2025 and 2024 , 26,767,882 and 25,963,051 shares, respectively, were issued and outstanding.

On October 1, 2024, at 12:01 Eastern time, the Merger became effective and Progressive Care, Inc.

On October 1, 2024, the Merger became effective and Progressive Care, Inc.

merged with and into Progressive Care, LLC, a wholly owned subsidiary of NextPlat.

3 unchanged sentences

Prior to January 21, 2022, our common stock and warrants were traded on the Nasdaq Capital Market under the symbols “OSAT” and “OSATW,” respectively.

April 2023 Private Placement of Common Stock

The offering price of the Common Stock was $ 1.75 per share, the closing price of the Common Stock on April 4, 2023.

On April 11, 2023, the Private Placement closed.

Upon the closing of the Private Placement, the Company received gross proceeds of approximately $ 6.0 million.

The Investor represented that it is acquiring the Common Stock for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof.

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.

Amendment to PIPE Warrants

The Warrants were originally issued pursuant to a Securities Purchase Agreement dated December 8, 2022, and provided for an exercise period ending on December 14, 2025.

Pursuant to the Amendment, the exercise period of each Warrant was extended by 24 months, such that the Warrants will now expire on December 14, 2027, instead of December 14, 2025.

All other terms and conditions of the Warrants remain unchanged and in full force and effect.

The 4,575,429 Warrants were originally classified as equity instruments within stockholders’ equity.

The Company modified 4,421,879 of the outstanding freestanding Warrants and determined the modification resulted in an incremental increase in fair value of approximately $ 1.2 million, calculated using the Black-Scholes model immediately before and after the modification.

As the modification was considered an inducement to holders to retain their investment, the incremental value of approximately $ 1.2 million was recognized as an increase of additional paid-in capital and recorded as a deemed dividend, impacting net income attributable to common stockholders for the period.

The modified warrants remain classified as equity instruments in stockholders’ equity.

NEXTPLAT CORP AND SUBSIDIARIES

3 unchanged sentences

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.

As of December 31, 2024 and 2023 , there were 144,000 and 144,000 Underwriter Warrants issued and outstanding, respectively.

As of December 31, 2025 and 2024 , there were 144,000 Underwriter Warrants issued and outstanding, respectively.

Progressive Care Merger W arrants

On October 1, 2024, as a result of the Progressive Care merger with NextPlat (the “Merger”), 650,515 warrants to purchase Progressive Care common stock were 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.

Placement Agent Warrants

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.

In December 2022, pursuant to 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.

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.

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.

Additionally, as a result of the Progressive Care merger with NextPlat, 637,984 placement agent warrants to purchase Progressive Care common stock were 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.

As of December 31, 2025 and 2024 , there were 1,187,035 Placement Agent Warrants issued and outstanding, respectively.

NEXTPLAT CORP AND SUBSIDIARIES

1 unchanged sentence

Stock-Based Compensation Warrants

During the year ended December 31, 2025, the Company granted 50,000 warrants as stock-based compensations valued at approximately $ 0.88 per warrant, using a Black-Scholes option pricing model with the following assumptions:

stock price of $ 0.88 per share (based on closing price of the Company’s common stock on the date of grant), volatility of 200 %, expected term of seven years, and a risk free interest rate of 3.88 %.

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 three years, and a risk free interest rate of 4.47 %.

As of December 31, 2025 and 2024 , there were 70,000 and 20,000 Stock-Based Compensation Warrants issued and outstanding, respectively.

12 unchanged sentences

50,000 0.88 6.86

( 48,550 ) 1.75 —

Balance outstanding and exercisable at December 31, 2025

8 unchanged sentences

Stock-Based compensation

Stock-based compensation expense is recorded in selling, general and administrative expenses in the Consolidated Statements of Comprehensive Loss.

Stock-based compensation expense is recorded in selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss.

For the years ended December 31, 2025 and 2024 , stock-based compensation expense was approximately $ 0.6 million and $ 1.6 million, respectively.

10 unchanged sentences

( 220,000 ) 5.03

( 5,000 ) 5.37

Outstanding as of December 31, 2024

2 unchanged sentences

Outstanding as of December 31, 2025

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.

281,750 $ 0.65

As of December 31, 2025 , there was approximately $ 0.3 million of net unrecognized compensation cost related to unvested stock-based compensation to be recognized over the remaining weighted average period of one year.

NEXTPLAT CORP AND SUBSIDIARIES

1 unchanged sentence

Stock Options

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.

Stock options outstanding at December 31, 2025 and 2024 , as disclosed in the below table, have approximately $ 0 and $ 3,000 of intrinsic value, respectively.

A summary of the status of the Company’s outstanding stock options and changes during the years ended December 31, 2025 and 2024 , is as follows:

7 unchanged sentences

( 250,000 ) 5.35 — —

(3,084 ) — — —

Balance outstanding at December 31, 2024

5 unchanged sentences

( 30,000 ) 2.46 2.46 —

(250,000 ) 5.35 — —

Balance outstanding at December 31, 2025

3 unchanged sentences

( 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.

On October 1, 2024, 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.

There were no stock options granted during the year ended December 31, 2025 .

As of December 31, 2025 , all stock options were fully vested.

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:

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.

NEXTPLAT CORP AND SUBSIDIARIES

3 unchanged sentences

ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.

The components of earnings before income taxes for the years ended December 31, 2024 and 2023 were as follows (in thousands):

The components of earnings (loss) before income taxes for the years ended December 31, 2025 and 2024 were as follows (in thousands):

Years Ended December 31,

Net loss after loss in equity method investment and before income taxes:

Net loss before income taxes:

$ ( 10,584 ) $ ( 22,681 )

$ ( 10,463 ) $ ( 22,455 )

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Income tax provision consisted of the following for the years ended December 31, 2025 and 2024 (in thousands):

6 unchanged sentences

Its estimated tax liability for December 31, 2025 and 2024 is approximately $ 0 and $ 56,000 , respectively.

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):

Years Ended December 31,

Federal income tax provision at statutory rate

The estimated tax liability of $ 56,000 differs from the estimated tax expense of approximately $ 71,000 due to true-up adjustments of approximately $ 15,000 that were recorded in 2024.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company adopted ASU 2023 - 09 for the year ended December 31, 2025.

A reconciliation of the income tax provision by applying the statutory United States federal income tax rate to loss before income taxes is as follows (dollars in thousands):

Year Ended December 31, 2025

federal statutory tax rate

$ ( 2,223 ) 21 %

State tax rate, net of federal effect

Change in valuation allowance

2,551 ( 24 )%

Nontaxable or nondeductible items

Other adjustments

Income tax provision

A reconciliation of the income tax provision by applying the statutory United States federal income tax rate to income loss before income taxes is as follows, prior to the adoption of ASU 2023 - 09:

Year Ended December 31, 2024

Federal income tax provision at statutory rate

Deferred state income taxes, net

1 unchanged sentence

Foreign taxes at rate different than US Taxes

Net operating loss deduction

Permanent differences

15 unchanged sentences

Right-of-use assets

Other tax carry-overs

Reserves and allowances

Accrued loss contingency

Stock-based compensation

11 unchanged sentences

Net deferred tax asset

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 .

The Company has a total net operating loss carryforward (“NOL carryforward”) of approximately $ 46.6 million at December 31, 2025 .

The NOL carryforward consists of approximately $ 30.1 million from NextPlat Corp and approximately $ 16.5 million from Progressive Care LLC.

Out of the approximately $ 46.6 million NOL carryforward, approximately $ 6.3 million will begin to expire in 2032 and approximately $ 40.3 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.

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.

9 unchanged sentences

For the years ended December 31, 2025 and 2024 , there were no penalties or interest recorded in income tax expense.

During the years ended December 31, 2025 and 2024, the Company made cash payments for foreign income taxes of approximately $ 35,000 and $ 0.2 million, respectively.

NEXTPLAT CORP AND SUBSIDIARIES

8 unchanged sentences

Operating Lease Agreements

On December 2, 2021, Nextplat entered into a 62 -month lease for 4,141 square feet of office space in Florida (“Florida lease”), for approximately $ 186,000 annually.

The rent increases 3 % annually.

The lease commenced upon occupancy on June 13, 2022, and will expire on August 31, 2027.

The Florida lease does not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees.

For our facilities in Poole, England, we rent office and warehouse space of approximately 2,660 square feet for £30,000 annually or approximately USD $ 37,100 , based on a yearly average exchange rate of 1.24 GBP:

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 .

On December 2, 2021, NextPlat Corp.

entered into a 62 -month operating lease for approximately 4,141 square feet of office space located in Florida (the “Florida Lease”).

The lease commenced upon occupancy on June 13, 2022 and was scheduled to expire on August 31, 2027.

Initial annual base rent was approximately $ 186,000 , subject to 3 % annual increases.

The Florida Lease did not require contingent rental payments, impose financial restrictions, or contain any residual value guarantees.

On November 11, 2025, the Company entered into a lease termination agreement with the landlord to terminate the Florida Lease prior to its contractual expiration date.

Pursuant to the termination agreement, the Company was required to pay an early termination fee of approximately $ 120,000 .

In accordance with ASC 842, the Company accounted for the termination agreement as a lease modification that resulted in termination of the lease.

Upon execution of the termination agreement, the Company remeasured the lease liability and derecognized the related ROU asset.

The difference between (i) the carrying amounts of the lease liability and ROU asset and (ii) the termination payment was recognized in the Consolidated Statements of Operations and Comprehensive Loss during the year ended December 31, 2025.

The $ 120,000 termination fee is included in operating expenses within the Consolidated Statements of Operations and Comprehensive Loss.

Following the termination, the Company has no remaining obligations under the Florida Lease.

The Company leases office and warehouse facilities located in Poole, England.

The Company previously leased approximately 2,660 square feet of office and warehouse space under a lease arrangement with annual rent of approximately £30,000 (approximately $ 37,100 based on an average exchange rate of 1.24 GBP to USD).

The lease was renewed on October 6, 2022 and expired on October 31, 2023, and was subsequently renewed for an additional twelve -month term.

On August 1, 2024, the Company relocated from its previous Poole, England facility and entered into a new operating lease for office and warehouse space at a new location in Poole, England (the “Poole Lease”).

The relocation resulted in termination of the prior lease agreement.

The Poole Lease has a three -year term commencing August 1, 2024 and expiring on July 31, 2027.

Annual base rent under the Poole Lease is approximately £14,000 through July 31, 2025, approximately £30,000 through July 31, 2026, and approximately £26,000 through July 31, 2027.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Outfitter leases office space located at 2727 Old Elm Hill Pike, Nashville, Tennessee (the “Nashville Lease”).

The lease commenced in April 2024 and originally had a contractual expiration date of April 2026.

The lease agreement required monthly lease payments of approximately $ 4,800 .

In December 2025, the Company executed a First Amendment to the lease agreement extending the lease term through April 1, 2027 and revising lease payments effective January 1, 2026.

In accordance with ASC 842, the amendment was evaluated as a lease modification.

As the modification extended the lease term and revised future lease payments without granting an additional right-of-use separate from the original lease, the Company accounted for the amendment as a modification of the existing operating lease.

Accordingly, the Company remeasured the operating lease liability as of the modification date using a revised discount rate, with a corresponding adjustment recorded to the related right-of-use asset.

Progressive Care entered into a lease agreement for its Orlando pharmacy in August 2020.

4 unchanged sentences

The lease calls for monthly payments of $ 5,237 , with an escalating payment schedule each year thereafter.

Progressive Care also leases its Palm Beach County pharmacy locations under operating lease agreements expiring in February 2025.

During June 2023 Nextplat entered into a 36 -months lease to le ase twenty-five ( 25 ) hours in a Phenom 300 aircraft, for approximately $ 200,650 annually.

The rent increases 3 % annually.

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.

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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.

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.

For the year ended December 31, 2024, 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.

There were no impairments related to the write-down of right-of-use assets for the year ended December 31, 2025.

We monitor for events or changes in circumstances that require a reassessment of

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Operating lease right-of-use assets, net

$ 812 $ 1,566

Operating lease liabilities:

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Long-term portion

$ 842 $ 1,461

Weighted average remaining lease term (years)

Weighted average discount rate

4.21 % 4.65 %

Finance leases:

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Weighted average discount rate

6.00 % 6.00 %

NEXTPLAT CORP AND SUBSIDIARIES

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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.

While the Company believes there are synergies between the two reportable segments, the segments are managed separately because each requires different business strategies.

Accounting policies associated with our operating segments are generally the same as those described in Note 1.

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2,905 7,802 — 10,707

Impairment loss

— 13,653 — 13,653

Professional fees

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278 262 — 540

Intangible asset amortization

Loss on settlement of litigation

Total expenses

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Interest expense

Other (income) expense

Other expense

434 965 — 1,399

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$ ( 4,837 ) $ ( 5,626 ) $ — $ ( 10,463 )

$ ( 5,947 ) $ ( 17,178 ) $ — $ ( 23,125 )

Year Ended December 31, 2024

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438 350 — 788

Intangible asset amortization

101 1,608 — 1,709

Total expenses

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$ 19,044 $ 18,033 $ — $ 37,077

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

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Commitments and Contingencies

On March 17, 2025, a former employee of Pharmco LLC, a wholly owned subsidiary of the Company, filed a lawsuit against Pharmco LLC, asserting claims under the Equal Employment Opportunity Commission (EEOC) regulations.

On October 14, 2025, the Company reached a Settlement Agreement with the plaintiff to resolve all claims.

The settlement was fully covered by the Company’s insurance policy, and the insurer remitted payment directly to the plaintiff on the Company’s behalf.

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.

Fernandez, the former Chief Executive Officer and director of NextPlat, and Rodney Barreto, a director of NextPlat.

The complaint purports to allege a breach of fiduciary duty by NextPlat and Messrs.

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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.

The Company believes the claims asserted in the action are without merit and intends to continue to vigorously defend against the lawsuit.

The Company has filed a motion to dismiss the complaint.

Although the parties have engaged in discussions regarding a potential resolution of the matter, no agreement has been reached and there can be no assurance that the matter will be resolved on acceptable terms or at all.

Based on currently available information and after consultation with legal counsel, management determined that a loss associated with this matter is probable and reasonably estimable in accordance with applicable accounting guidance.

Accordingly, as of December 31, 2025, the Company recorded an accrual of approximately $ 1.75 million, which represents management’s current estimate of loss exposure and corresponds to the Company’s applicable insurance retention under its directors’ and officers’ liability insurance coverage.

Due to the significant and unusual nature of the contingent loss accrual, the Company classified the associated expense within other (expense) income instead of operating expenses (as with other legal settlements) as to not distort operating losses.

The ultimate outcome of the matter remains uncertain, and the actual loss could differ materially from the amount accrued.

Any such difference could have a material effect on the Company’s consolidated financial condition, results of operations, or cash flows in the period in which the matter is resolved.

On June 17, 2024, Progressive Care was notified of a potential claim that a former employee (the “Claimant”) allegedly suffered a loss due to an alleged breach by Progressive Care of an employment contract with the Claimant.

Pursuant to the Settlement Agreement, Progressive Care paid the Claimant a total sum of $ 150,000 within seven days of execution.

In addition, Progressive Care transferred to the Claimant 128,205 shares of NextPlat common stock valued at $ 100,000 .

The settlement amount of $ 250,000 is included in “Loss on settlement of litigation” in the Consolidated Statements of Operations and Comprehensive 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.

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.

Other than the matter described above, the Company is not currently involved in any pending legal proceeding, claims 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, operating results, and cash flows.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Related Party Transactions

As of December 31, 2024 , the accounts payable due to related party includes amounts due to David Phipps.

The Company uses an American Express account for Orbital Satcom and an American Express account for GTC, both in the name of the Company’s Chief Executive Officer, who personally guarantees the balance owed.

As of December 31, 2025 , the accounts payable due to related party includes amounts due to the Company’s Chief Executive Officer.

Total related party payments due as of December 31, 2025 and December 31, 2024 were $ 11,000 and $ 18,000 , 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.

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.

During the year ended December 31, 2025 , the Company employed and paid wages to one employee related to the Company’s Chief Executive Officer and one employee related to the Company’s Chief Financial Officer.

During the year ended December 31, 2025, the Company employed and paid wages to the spouse of the Company’s late Chief Executive Officer, Charles M.

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)

Progressive Care Inc .

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 September 2, 2022, NextPlat, Messrs.

Fernandez and Barreto and certain other purchasers 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 $ 1.0 million and Messrs.

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

In connection with the Note Purchase, NextPlat, Messrs.

Fernandez and Barreto and the other purchasers of the Note entered into a Debt Modification Agreement with Progressive Care.

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 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 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”).

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

On May 9, 2023, pursuant to the DCA, the Company received 570,599 shares, Charles M.

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

To induce the approval of the debt conversion pursuant to the DCA, Messrs.

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

In addition, the Company and Messrs.

Fernandez and Barreto also received a common stock purchase warrant to purchase one share of Common Stock for each share of Common Stock they received upon conversion of the Note.

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

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

The Company exercised common stock purchase warrants on a cashless basis and was issued 402,269 common stock shares.

The Company also exercised common stock purchase warrants on a cash basis and paid consideration in the amount of $ 506,000 and was issued 230,000 common stock shares.

Fernandez exercised common stock purchase warrants on a cashless basis and was issued 211,470 common stock shares.

Barreto exercised common stock purchase warrants on a cashless basis and was issued 130,571 common stock shares.

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 and Messrs.

Fernandez and Barreto, entered into a voting agreement 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 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.

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.

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 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.

Fernandez, Robert D.

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

The note was recorded in Notes Receivable Due From Related Party on the Balance Sheets.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company terminated Mrs.

Fernandez’s employment with the Company on August 13, 2025.

Concentrations

e-Commerce Operations concentrations:

Amazon accounted for 32.8 % and 51.6 % of the Company’s revenues during the years ended December 31, 2024 and 2023 , respectively.

No other customer accounted for 10% or more of the Company’s revenues for either period.

Amazon accounted for 31.1 % and 32.8 % of the Company’s net revenues during the years ended December 31, 2025 and 2024 , respectively.

No other customer accounted for 10% or more of the Company’s net revenues for either period.

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, 2025 and 2024 (in thousands):

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$ 1,373 11 % $ 975 10 %

The following table sets forth revenue as to each geographic location, for the years ended December 31, 2024 and 2023 (in thousands):

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table sets forth net revenue as to each geographic location, for the years ended December 31, 2025 and 2024 (in thousands):

Years Ended December 31,

7 unchanged sentences

$ 14,608 100 % $ 13,791 100 %

$ 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.

Progressive had significant concentrations with one vendor, McKesson.

The purchases from this significant vendor were approximately 98.0 % of total vendor purchases for the year ended December 31, 2025 .

Progressive Care’s trade receivables are primarily from prescription medications billed to various insurance providers.

Progressive’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 year ended December 31, 2024 :

Reimbursements from the top three significant PBMs were as follows:

Year Ended December 31, 2025

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