NextPlat Corp 10-K

ITEM 9A. CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures. 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 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. (c) Management ’ s Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. 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: (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of assets; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and Board of Directors; 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. 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. 48 Table of Contents Material Weakness in Internal Control Over Financial Reporting 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. 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. 49 Table of Contents 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. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules from the SEC that permit us to provide only management’s report in this annual report. (d) Changes in 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. 50 Table of Contents ITEM 9B. OTHER INFORMATION 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. 51 Table of Contents 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. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 52 Table of Contents PART III ITEM 10. 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 . Our Board of Directors has adopted a written Code of Conduct and Ethics applicable to all officers, directors and employees, which is available on our website (www.nextplat.com) under “Governance Documents” within the “Corporate Governance” section. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8 -K regarding amendment to, or waiver from, a provision of this Code and by posting such information on the website address and location specified above. ITEM 11. EXECUTIVE COMPENSATION 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 . ITEM 12. 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. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 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. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 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. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Documents filed as part of this Annual Report on Form 10-K. (1) Financial Statements. See Index to Consolidated Financial Statements, which appears on page F-1 hereof. The financial statements listed in the accompanying Index to Consolidated Financial Statements are filed herewith in response to this Item. (2) Financial Statements Schedules. None. (3) Exhibits 53 Table of Contents Exhibit No. Description 3.1 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). 3.2 Certificate of Amendment to Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014). 3.3 Certificate of Amendment to Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 8, 2016). 3.4 Certificate of Change to the Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.7 to the Company’ s Current Report on Form 8-K filed with the SEC on May 28, 2021). 3.5 Certificate of Amendment of the Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’ s Current Report on Form 8-K filed with the SEC on January 20, 2022). 3.6 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’ s Current Report on Form 8-K filed with the SEC on January 20, 2022). 4.1 Description of NextPlat Corp’ s Securities Registered Under Section 12 of the Exchange Act. (Incorporated by reference to Exhibit 4.1 to the Company ’ s Annual Report on Form 10-K filed with the SEC on March 31, 2022). 4.2 Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to the Company’ s Registration Statement on Form S-1/A filed with the SEC on April 7, 2021). 4.3 Form of Warrant Agent Agreement (incorporated by reference to Exhibit 4.2 to the Company’ s Registration Statement on Form S-1/A filed with the SEC on April 7, 2021). 4.4 Form of Underwriter’ s Warrant (incorporated by reference to Exhibit 4.3 to the Company ’ s Registration Statement on Form S-1/A filed with the SEC on April 7, 2021). 4.5 Form of Warrant Agreement issued in offering (incorporated by reference to Exhibit 4.1 to the Company’ s Current Report on Form 8-K filed with the Commission on December 13, 2022) 4.6 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) 4.7 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). 10.1 + David Phipps Employment Agreement (Incorporated by reference from the Current Report on Form 8-K filed with the SEC on March 11, 2021). 10.2 + 2020 Equity Incentive Plan (Incorporated by reference from the Current Report on Form 8-K filed with the SEC on December 31, 2021). 10.3 Debenture by and among Global Telesat Communications LTD and HSBC UK BANK PLC, dated July 16, 2020 (Incorporated by reference from the Company’ s Current Report on Form 8-K filed on July 21,2020). 10.4 Coronavirus Business Interruption Loan Agreement by and among Global Telesat Communications LTD and HSBC UK BANK PLC, dated July 16, 2020 (Incorporated by reference from the Company’ s Current Report on Form 8-K filed on July 21, 2020). 10.5 + 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). 54 Table of Contents 10.6 + 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). 10.7 + Hector Delgado Independent Director Agreement (incorporated by reference to Exhibit 10.21 to the Company’ s Current Report on Form 8-K filed with the SEC on June 7, 2021). 10.8 + Louis Cusimano Independent Director Agreement (incorporated by reference to Exhibit 10.22 to the Company’ s Current Report on Form 8-K filed with the SEC on June 7, 2021). 10.9 + David Phipps Employment Agreement (incorporated by reference to Exhibit 10.25 to the Company’ s Current Report on Form 8-K filed with the SEC on June 7, 2021). 10.10 Alibaba.com Supplemental Services Agreement (incorporated by reference to Exhibit 10.29 to the Company’ s Current Report on Form 8-K filed with the SEC on July 13, 2021). 10.11 Alibaba.com Transaction Services Agreement (incorporated by reference to Exhibit 10.30 to the Company’ s Current Report on Form 8-K filed with the SEC on July 13, 2021). 10.12 Alibaba.com Terms of Use (incorporated by reference to Exhibit 10.31 to the Company’ s Current Report on Form 8-K filed with the SEC on July 13, 2021). 10.13 + Amended and Restated 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’ s Current Report on Form 8-K filed with the SEC on October 1, 2021). 10.14 + Director Services Agreement, dated January 11, 2022, between Orbsat Corp and Rodney Barreto (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on January 11, 2022). 10.15 + Orbsat Corp Amended and Restated 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the SEC on December 22, 2021). 10.16 + 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). 10.17 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). 10.18 + 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). 55 Table of Contents 10.19 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) 10.20 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 to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2023) . 10.21 Distribution Agreement, dated as of October 12, 2023, by and between OPKO Health Spain, S.L.U. 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) . 10.22+ 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). 10.23+ 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) . 10.24+ 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). 10.25+ 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). 10.26+ 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). 10.27† 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. 10.28+ 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) . 10.29+ 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). 10.30+ 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). 10.31+ 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). 19.1 Insider Trading Policy 21.1 Subsidiaries of NextPlat Corp. 23.1 Consent of RBSM LLP. 31.1 Certification of Principal Executive Officer, pursuant to Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Principal Financial Officer, pursuant to Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 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). 101.INS 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. 101 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 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. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). (1) Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however that the Company may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any schedule or exhibit so furnished. + 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. 56 Table of Contents ITEM 16. FORM 10-K SUMMARY None. SIGNATURES 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. Dated: March 31, 2026 NEXTPLAT CORP By: /s/ David Phipps David Phipps Chief Executive Officer and President (Principal Executive Officer) By: /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 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. Signature Title Date /s/ David Phipps Chief Executive Officer and President, Director March 31, 2026 David Phipps (Principal Executive Officer) /s/ Amanda Ferrio Chief Financial Officer March 31, 2026 Amanda Ferrio (Principal Financial and Accounting Officer) /s/ Rodney Barreto Chairman March 31, 2026 Rodney Barreto /s/ Douglas S. Ellenoff Vice Chairman March 31, 2026 Douglas Ellenoff /s/ Hector Delgado Director March 31, 2026 Hector Delgado /s/ Anthony Armas Director March 31, 2026 Anthony Armas /s/ Lauren Sturges Fernandez Director March 31, 2026 Lauren Sturges Fernandez 57 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES Report of Independent Registered Public Accounting Firm RBSM LLP, New York, NY, (PCAOB ID. 587) F-2 Consolidated Balance Sheets as of December 31, 2025 and 2024 F-3 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2025 and 2024 F-4 Consolidated Statements of Equity for the Years Ended December 31, 2025 and 2024 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 F-6 Notes to Consolidated Financial Statements F-7 F-1 Table of Contents New York Office: 805 Third Avenue New York, NY 10022 212.838-5100 www.rbsmllp.com REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of NextPlat Corp and Subsidiaries 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, 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. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters 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. /s/ RBSM LLP We have served as the Company’s auditor since 2014. New York, NY March 31, 2026 PCAOB ID Number 587 F-2 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except shares and par value data) December 31, 2025 December 31, 2024 ASSETS Current Assets Cash $ 13,709 $ 19,960 Accounts receivable, net 4,014 4,895 Receivables - other 1,930 1,331 Inventory, net 3,396 4,881 Unbilled revenue 292 237 VAT receivable 352 371 Prepaid expenses 463 404 Total Current Assets 24,156 32,079 Property and equipment, net 2,505 3,407 Goodwill 156 156 Intangible assets, net 422 524 Operating right-of-use assets, net 189 812 Finance right-of-use assets, net — 5 Deposits 37 94 Total Other Assets 804 1,591 Total Assets $ 27,465 $ 37,077 LIABILITIES AND EQUITY Current Liabilities Accounts payable and accrued expenses $ 8,265 $ 7,230 Contract liabilities 193 89 Notes payable 416 380 Due to related party 82 48 Operating lease liabilities 158 404 Finance lease liabilities — 5 Income taxes payable 12 54 Total Current Liabilities 9,126 8,210 Long Term Liabilities Notes payable, net of current portion 876 1,032 Operating lease liabilities, net of current portion 41 438 Total Liabilities 10,043 9,680 Commitments and Contingencies — — Equity Preferred stock ($ 0.0001 par value; 3,333,333 shares authorized; no shares issued or outstanding) — — Common stock ($ 0.0001 par value; 50,000,000 shares authorized; 26,767,882 and 25,963,051 shares issued and outstanding as of December 31, 2025 and 2024, respectively) 3 3 Additional paid-in capital 77,586 75,697 Accumulated deficit ( 60,063 ) ( 48,351 ) Accumulated other comprehensive loss ( 118 ) ( 66 ) Treasury stock (at cost, 130,549 shares at December 31, 2025 and no shares at December 31, 2024, respectively) ( 100 ) — Equity attributable to common stockholders 17,308 27,283 Equity attributable to noncontrolling interests 114 114 Total Equity 17,422 27,397 Total Liabilities and Equity $ 27,465 $ 37,077 See accompanying notes to consolidated financial statements. F-3 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except per share data ) Years Ended December 31, 2025 2024 Sales of products, net $ 49,665 $ 55,540 Revenues from services 4,657 10,542 Revenue, net 54,322 66,082 Cost of products 43,374 49,033 Cost of services 42 41 Cost of revenue 43,416 49,074 Gross profit 10,906 17,008 Operating expenses: Selling, general and administrative 6,043 6,179 Salaries, wages and payroll taxes 10,707 13,303 Impairment loss — 13,653 Professional fees 2,264 4,401 Depreciation and amortization 540 788 Intangible asset amortization 102 1,709 Loss on settlement of litigation 250 — Total operating expenses 19,906 40,033 Loss before other (income) expense ( 9,000 ) ( 23,025 ) Other (income) expense: Loss (gain) on sale or disposal of property and equipment 213 ( 94 ) Interest expense 64 81 Interest earned ( 358 ) ( 731 ) Contingent loss on settlement of litigation 1,750 — Asset write-off — 111 Other income — ( 2 ) Foreign currency exchange rate variance ( 206 ) 65 Total other expense (income) 1,463 ( 570 ) Loss before income taxes ( 10,463 ) ( 22,455 ) Income taxes — ( 71 ) Net loss ( 10,463 ) ( 22,526 ) Deemed dividend ( 1,249 ) — Net loss attributable to non-controlling interest — 9,100 Net loss attributable to common stockholders $ ( 11,712 ) $ ( 13,426 ) Comprehensive loss: Net loss $ ( 10,463 ) $ ( 22,526 ) Foreign currency loss ( 52 ) ( 3 ) 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. F-4 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUI TY YEARS ENDED December 31, 2025 AND 2024 (In thousands, except par value ) Accumulated Common Stock Additional Other Treasury Stock $0.0001 Par Value Paid-in Accumulated Comprehensive Cost Stockholders' Noncontrolling Total Shares Amount Capital Deficit Loss Shares Amount Equity Interests Equity 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 ) Net loss — — — ( 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 ) — — — — — — Net loss — — — ( 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. F-5 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands ) Years Ended December 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: 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 358 987 Cash received from other sources 245 94 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 ( 35 ) ( 156 ) Net cash used in operating activities ( 6,130 ) ( 5,464 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment ( 71 ) ( 189 ) Proceeds from sale or disposal of property and equipment 234 94 Cash acquired in acquisition of Outfitter Satellite subsidiary — 236 Cash paid in acquisition of Outfitter Satellite subsidiary — ( 1,094 ) Net cash provided by (used in) investing activities 163 ( 953 ) CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of notes payable ( 120 ) ( 111 ) Acquisition of issued common stock held in treasury ( 100 ) — Payments on finance lease liabilities ( 5 ) ( 24 ) Proceeds from exercise of warrants — 85 Capital contribution of non-controlling interest — 122 Net cash (used in) provided by financing activities ( 225 ) 72 Effect of exchange rate on cash ( 59 ) ( 2 ) 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 Net loss $ ( 10,463 ) $ ( 22,526 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 535 768 Change in allowance for credit losses ( 101 ) ( 131 ) Change in inventory reserve 21 379 Amortization of intangible assets 102 1,709 Amortization of right-of-use assets - operating leases 396 325 Amortization of right-of-use assets - finance leases 5 20 Write-off of right-of-use asset — 111 Impairment loss — 13,653 Stock-based compensation 640 1,632 Loss (gain) on sale or disposal of property and equipment 213 ( 94 ) Change in operating assets and liabilities: Accounts receivable 383 4,745 Inventories 1,464 12 Unbilled revenue ( 55 ) ( 48 ) Prepaid expense ( 59 ) 309 Other assets — 256 Deposits 57 ( 55 ) VAT receivable 19 ( 29 ) Accounts payable and accrued expenses 1,173 ( 6,035 ) Operating lease liabilities ( 522 ) ( 427 ) Income taxes payable ( 42 ) ( 85 ) Contract liabilities 104 47 Net cash used in operating activities $ ( 6,130 ) $ ( 5,464 ) See accompanying notes to consolidated financial statements F-6 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Unless the context requires otherwise, references to the “Company”, “we”, “us”, “our”, “our Company”, or “our business” refer to NextPlat Corp and its subsidiaries. Note 1. 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. 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. 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. 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. 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. F- 7 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 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. ClearMetrX also provides data analytics and reporting services to support and improve care management for health care organizations. RXMD Therapeutics was formed on October 1, 2019. RXMD Therapeutics has had no operating activity to date. F- 8 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 2. Basis of Presentation and Principles of Consolidation 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. The closing of the transaction occurred on April 1, 2024. Outfitter is a wholly-owned subsidiary of NextPlat Corp. Outfitter provides consumers, commercial, and government customers with advanced satellite-based connectivity solutions from leading brands, including Iridium, Inmarsat and Globalstar. 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. F- 9 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 3. Summary of Significant Accounting Policies The significant accounting policies of the Company are described below. Segment Reporting 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. These two operating segments also represent our two reportable segments: (i) e-Commerce Operations and (ii) Healthcare Operations. Business acquisitions The Company records business acquisitions using the acquisition method of accounting. All of the assets acquired, liabilities assumed, and contractual contingencies are recognized at their fair value on the acquisition date. The application of the acquisition method of accounting for business combinations requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration between assets that are depreciated and amortized and goodwill. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses and restructuring costs are recognized separately from the business combination and are expensed as incurred. The Company uses a measurement period following the acquisition date to gather information that existed as of the acquisition date that is needed to determine the fair value of the assets acquired, liabilities assumed and equity interests. The measurement period ends once all information is obtained, but no later than one year from the acquisition date. Cash 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 $ 1.1 million, are uninsured. The Company has a deposit placement agreement for Insured Cash Sweep Service (“ICS”). This service is a secure and convenient way to access FDIC protection on large deposits, earn a return, and enjoy flexibility. The Company believes that the ICS agreement will mitigate its credit risk as it relates to uninsured FDIC amounts in excess of $250,000. F- 10 Table of Contents 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. Inventory Inventories are valued at the lower of cost or net realizable value, using the first -in first -out cost method. The Company assesses the valuation of its inventories and reduces the carrying value of those inventories that are obsolete or in excess of the Company’s forecasted usage to their estimated net realizable value. The Company estimates the net realizable value of such inventories based on analysis and assumptions including, but not limited to, historical usage, expected future demand and market requirements. A change to the carrying value of inventories is recorded to cost of products. Foreign Currency Translation The Company’s reporting currency is U.S. Dollars. 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. Dollars at balance sheet date, shareholders’ equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. 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 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 F- 11 Table of Contents 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 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 are recognized as revenue. The Company also records as contract liabilities, certain annual plans for airtime, which are paid in advance. Once airtime services are incurred, they are recognized as revenue. Unbilled revenue is recognized for airtime plans whereby the customer is invoiced for its data usage the following month after services are incurred. The Company’s customers generally purchase a combination of our products and services as part of a multiple element arrangement. The Company’s assessment of which revenue recognition guidance is appropriate to account for each element in an arrangement can involve significant judgment. This assessment has a significant impact on the amount and timing of revenue recognition. 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, Revenue from Contracts with Customers (“ASC 606” ), we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. The five -step model is applied to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services transferred to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct. We then recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Contract liabilities are shown separately in the consolidated balance sheets as current liabilities. 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. F- 12 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Healthcare Operations: The Company provides prescription pharmaceuticals, virus related diagnostics and vaccinations, TPA services, and contracted pharmacy services for 340B covered entities under the 340B Drug Discount Pricing Program. Under the terms of the contracted pharmacy services for 340B covered entities, the Company acts as a pass-through for reimbursements on prescription claims adjudicated on behalf of the 340B covered entities in exchange for a dispensing fee per prescription. 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. Each prescription claim is considered an arrangement with the customer and is a separate performance obligation. Payments are received directly from the customer at the point of sale, or the customers’ insurance provider is billed electronically. For third -party medical insurance and other claims, authorization is obtained to ensure payment from the customer’s insurance provider before the medication is dispensed to the customer. Authorization is obtained 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. Billings for most prescription orders are with third -party payers, including Medicare, Medicaid, and insurance carriers. Customer returns are nominal. The Company recognizes revenue from TPA services as it satisfies the performance obligations under the TPA contract with a 340B covered entity. TPA services provided to covered entities include consulting services, accounting and reconciliation of contract pharmacy billings, and various compliance services. The covered entity simultaneously receives and consumes benefits as the Company performs services under the TPA contract. These services are capable of being distinct from one another, e.g., the covered entity may receive benefit from each separate service, but in the context of a TPA contract, the services are not distinct with the context of the TPA contract. Instead, the Company provides a significant service of integrating the services into a combined output that benefits the covered entity. Therefore, the Company considers the combined services to be a single performance obligation in each TPA contract. As stated in the TPA agreements, the Company receives a fixed percentage which is applied to the gross pharmacy service billings over the contract period. The gross pharmacy service billings are estimated based on the number of prescriptions filled by the Pharmacy Service contractor multiplied by the reimbursement rates set by the insurance providers. The Company invoices the covered entities for TPA services on a semi-monthly basis and collections are within 24 - 45 days of invoicing. ASC 606 provides a practical expedient wherein an entity may recognize revenue in the amount to which it has a right to invoice a customer if the entity has a right to consideration from the customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date. This expedient could be available, for example, for a service contract in which an entity bills a fixed amount for each hour of service provided. The Company believes that this practical expedient applies to its TPA contracts and we have elected this method in measuring revenue over the TPA contract term. F- 13 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 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. Advertising Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Advertising expense was approximately $ 0.2 million and $ 0.2 million for the years ended December 31, 2025 and 2024 , respectively. Goodwill Goodwill represents the excess of the purchase price over the value assigned to net tangible and identifiable intangible assets. Valuation techniques consistent with the market approach, income approach, and/or cost approach are used to measure fair value. Goodwill and other indefinite-lived intangible assets are assessed annually for impairment in the fourth fiscal quarter and in interim periods if events or changes in circumstances indicate that the assets may be impaired. Intangible Assets Acquired intangible assets with finite lives other than goodwill are amortized over their useful lives. For intangible assets acquired in a business combination, the estimated fair values of the assets received are used to establish their recorded values. Acquired intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite. Valuation techniques consistent with the market approach, income approach, and/or cost approach are used to measure fair value. Intangible assets subject to amortization represent the fair value of tradenames and customer contracts acquired. In valuing these assets, the Company makes assumptions regarding useful lives and projected growth rates, and significant judgment is required. The Company periodically reviews its identifiable intangible assets for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the carrying amounts of those assets exceed their respective fair values, additional impairment tests are performed to measure the amount of the impairment losses, if any. Tradenames and customer contracts are amortized over 10 years. Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable. F- 14 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Property and Equipment Property and equipment are carried at historical cost less accumulated depreciation. Depreciation is based on the estimated service lives of the depreciable assets and is calculated using the straight-line method. Expenditures that increase the value or productive capacity of assets are capitalized. Fully depreciated assets are retained in the property and equipment, and accumulated depreciation accounts until they are removed from service. When property and equipment are retired, sold or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Repairs and maintenance are expensed as incurred. The estimated useful lives of property and equipment are generally as follows: Years Building 40 Building improvements Remaining life of the building Leasehold improvements Lessor of the estimated useful life or life of the lease Office furniture and fixtures 4 - 5 Computer equipment 3 - 4 Rental equipment 4 Vehicles 3 - 5 Appliques 10 Website development 2 Impairment of Long-lived Assets The Company reviews its long-lived assets, comprised of property and equipment, right-of-use assets, and intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and consider market participants in accordance with ASC Topic 360 - 10, Accounting for the Impairment or Disposal of Long-Lived Assets . The Company evaluates the long-lived assets of the reporting units for impairment at the lowest asset group level for which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, the carrying amount of the asset group is compared to the estimated future undiscounted cash flows. The impairment loss calculation compares the carrying amount of the assets to the fair value based on estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value. 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. F- 15 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Stock-based Compensation 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. The Company estimated the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The Company’s determination of the fair value using the option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables. Income Taxes The Company accounts for income taxes pursuant to the provision of ASC Topic 740 - 10, Accounting for Income Taxes (“ASC 740 - 10” ), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provision of ASC 740 - 10 related to Accounting for Uncertain Income Tax Positions. 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. In accordance with the guidance of ASC 740 - 10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. 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. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. The Company has adopted ASC Topic 740 - 10 - 25, “Definition of Settlement,” which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed. F- 16 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Leases Effective January 1, 2019, the Company accounts for its leases under ASC Topic 842, Leases. 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. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right of use asset and lease liability, the Company has elected to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) includes net income (loss) for the period and unrealized income (losses) from foreign currency translation adjustments. Earnings per Common Share Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. In periods where the Company has a net loss, all dilutive securities are excluded. See Note 7 for more information on the computation of earnings per share. Related Party Transactions A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party - see Note 22. F- 17 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted 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 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. 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 primarily relating to the rate reconciliation and income taxes paid. 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 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. F- 18 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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. Note 4. 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. F- 19 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 5. Fair Value Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments: ● 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. ● Notes payable and lease liabilities: The carrying amount of notes payable approximated fair value due to variable interest rates at customary terms and rates the Company could obtain in current financing. The carrying value of lease liabilities approximated fair value due to the implicit rate in the lease in relation to the Company’s borrowing rate and the duration of the leases (Level 2 inputs). Identifiable Intangible Assets The initial recognition of the Outfitter identifiable intangible assets, resulting from the acquisition on April 1, 2024, were measured using Level 3 inputs. The fair value at the date of acquisition was approximately $ 0.6 million. F- 20 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 6. Revenue The following table disaggregates net revenues by categories (in thousands): Year Ended December 31, 2025 e-Commerce Operations Healthcare Operations Total e-Commerce revenue $ 14,608 $ — $ 14,608 Pharmacy prescription and other revenue, net of PBM fees — 35,704 35,704 Pharmacy 340B contract revenue — 4,010 4,010 Revenues, net $ 14,608 $ 39,714 $ 54,322 Year Ended December 31, 2024 e-Commerce Operations Healthcare Operations Total e-Commerce revenue $ 13,791 $ — $ 13,791 Pharmacy prescription and other revenue, net of PBM fees — 41,907 41,907 Pharmacy 340B contract revenue — 10,384 10,384 Revenues, net $ 13,791 $ 52,291 $ 66,082 F- 21 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 7. Earnings (Loss) per Share Net income (loss) per common share is calculated in accordance with ASC Topic 260: Earnings per Share (“ASC 260” ). Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. The components of basic and diluted EPS were as follows (in thousands, except per share data). For all periods presented, the Company incurred a net loss causing inclusion of any potentially dilutive securities to have an anti-dilutive effect, resulting in diluted loss per common share and basic loss per common share being equivalent. Years Ended December 31, 2025 2024 Net loss attributable to common stockholders $ ( 11,712 ) $ ( 13,426 ) Basic weighted average common shares outstanding 26,535 20,614 Potentially dilutive common shares — — Diluted weighted average common shares outstanding 26,535 20,614 Basic weighted average loss per common share $ ( 0.44 ) $ ( 0.65 ) Diluted weighted average loss per common share $ ( 0.44 ) $ ( 0.65 ) Potentially dilutive common shares excluded from the calculation of diluted weighted average loss per common share: Stock options — 13 Common stock purchase warrants — — — 13 F- 22 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 8. Accounts Receivable, net Accounts receivable, net consisted of the following (in thousands): December 31, 2025 December 31, 2024 Gross accounts receivable – trade $ 4,054 $ 5,036 Less: allowance for credit losses ( 40 ) ( 141 ) Accounts receivable – trade, net $ 4,014 $ 4,895 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. Note 9. Receivables - Other Receivables - other consisted of the following (in thousands): December 31, 2025 December 31, 2024 Performance bonuses $ 1,369 $ 1,187 Customers 472 115 Other 89 29 $ 1,930 $ 1,331 F- 23 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 10. Inventory Inventory, net consisted of the following (in thousands): December 31, 2025 December 31, 2024 Finished goods $ 3,814 $ 5,320 Less reserve for obsolete inventory ( 418 ) ( 439 ) Total $ 3,396 $ 4,881 Note 11. Property and Equipment, net Property and equipment consisted of the following (in thousands): December 31, 2025 December 31, 2024 Appliques $ 2,160 $ 2,160 Building 2,116 2,116 Website development 618 615 Office furniture and fixtures 575 564 Land 184 184 Leasehold improvements 129 177 Rental equipment 128 87 Computer equipment 122 119 Vehicles — 645 Property and equipment gross 6,032 6,667 Less: accumulated depreciation ( 3,527 ) ( 3,260 ) Property and equipment, net $ 2,505 $ 3,407 Depreciation expense was approximately $ 0.5 million and $ 0.8 million for the years ended December 31, 2025 and 2024 , respectively. F- 24 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 12. Goodwill and Intangible Assets, net Goodwill 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 Intangible assets, net as of December 31, 2025 and 2024 related to Outfitter and consisted of the following (in thousands): December 31, 2025 Gross amount Accumulated amortization Net Amount Customer Contracts $ 665 $ ( 395 ) $ 270 Trade names 185 ( 33 ) 152 Total intangible assets $ 850 $ ( 428 ) $ 422 December 31, 2024 Gross amount Accumulated amortization Net Amount Customer Contracts $ 665 $ ( 312 ) $ 353 Trade names 185 ( 14 ) 171 Total intangible assets $ 850 $ ( 326 ) $ 524 F- 25 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) A summary of the changes to the gross carrying amount, accumulated amortization, and net book value of total intangible assets by reporting unit during the periods presented is as follows (in thousands): e-Commerce Operations Healthcare Operations Total Balances as December 31, 2024: Gross amount $ 850 $ — $ 850 Accumulated amortization ( 326 ) — ( 326 ) Net amount 524 — 524 Changes during the year ended December 31, 2025: Amortization expense ( 102 ) — ( 102 ) Net amount ( 102 ) — ( 102 ) Balances at December 31, 2025: Gross amount 850 — 850 Accumulated amortization ( 428 ) — ( 428 ) Net amount $ 422 $ — $ 422 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): Year Amount 2026 $ 102 2027 102 2028 102 2029 39 2030 18 Thereafter 59 Total $ 422 F- 26 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 13. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following (in thousands): December 31, 2025 December 31, 2024 Accounts payable $ 5,812 $ 6,596 Accrued litigation 1,750 — Accrued wages and payroll liabilities 340 269 Customer deposits payable 72 96 Accrued other liabilities 291 269 Total $ 8,265 $ 7,230 Note 14. Notes Payable Notes payable consisted of the following (in thousands): December 31, 2025 December 31, 2024 A. Mortgage note payable - commercial bank - collateralized $ 956 $ 1,050 B. Note payable - uncollateralized 25 25 C. Notes payable - collateralized 78 234 Insurance premiums financing 233 103 Subtotal 1,292 1,412 Less: current portion of notes payable ( 416 ) ( 380 ) Long-term portion of notes payable $ 876 $ 1,032 (A) Mortgage Note Payable – collateralized In 2018, Pharmco closed on the purchase of land and building located at 400 Ansin Boulevard, Hallandale Beach, Florida. The purchase price was financed in part through a mortgage note and security agreement entered into with a commercial lender in the amount of $ 1,530,000 . 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 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. F- 27 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (B) Note Payable – Uncollateralized As of December 31, 2025 , the uncollateralized note payable represents a non-interest-bearing loan that is due on demand from an investor. (C) Notes Payable – Collateralized On July 16, 2020 ( the “Issue Date”), GTC, entered into a Coronavirus Interruption Loan Agreement (“Debenture”) by and among the Company and HSBC UK Bank PLC (the “Lender”) for an amount of £250,000, or USD $ 338,343 at an exchange rate of GBP: USD of 1.3533720 . 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 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. The Debenture is secured by all GTC’s assets as well as a guarantee by the UK government. The Debenture includes customary events of default, including, among others: (i) non-payment of amounts due thereunder, (ii) non-compliance with covenants thereunder, (iii) bankruptcy or insolvency (each, an “Event of Default”). Upon the occurrence of an Event of Default, the Debenture becomes payable upon demand. 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 . The terms of the promissory note payable require 60 monthly payments of $ 1,859 , including interest at 8.78 % starting January 2023. The balance outstanding on the note payable was approximately $ 39,000 and $ 58,000 as of December 31, 2025 and 2024 , respectively. Principal outstanding as of December 31, 2025 , is expected to be repayable as follows (in thousands): Year Amount 2026 $ 416 2027 123 2028 753 Thereafter — Total $ 1,292 F- 28 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 15. Equity Common Stock We have authorized 50,000,000 shares of $ 0.0001 par value common stock. As of December 31, 2025 and 2024 , 26,767,882 and 25,963,051 shares, respectively, were issued and outstanding. 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. 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. Listing on the Nasdaq Capital Market Our common stock and warrants have been trading on the Nasdaq Capital Market under the symbols “NXPL” and “NXPLW,” respectively, since January 21, 2022. Prior to January 21, 2022, our common stock and warrants were traded on the Nasdaq Capital Market under the symbols “OSAT” and “OSATW,” respectively. Note 16. Warrants 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 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. F- 29 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Underwriter Warrants In June 2021, the Company issued 144,000 warrants to Maxim Group LLC, the underwriter (the “Underwriter Warrants”) in connection with the June 2021 Public Offering ( “June Offering”). The Underwriter Warrants expire five years from the effective date of the June Offering and are exercisable at a per share price equal to $ 5.50 per share, or 110 % of the public offering price per unit in the June Offering. 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 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. 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. F- 30 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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. As of December 31, 2025 and 2024 , there were 70,000 and 20,000 Stock-Based Compensation Warrants issued and outstanding, respectively. A summary of the status of the Company’s total outstanding warrants and changes during the year ended December 31, 2025 is as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at January 1, 2024 7,569,572 $ 2.85 2.15 Granted (1) 1,288,498 2.01 1.93 Exercised ( 48,550 ) 1.75 — Balance outstanding and exercisable at December 31, 2024 8,809,520 $ 2.73 1.26 Balance at January 1, 2025 8,809,520 $ 2.73 1.26 Granted 50,000 0.88 6.86 Exercised — — — Balance outstanding and exercisable at December 31, 2025 8,859,520 $ 2.89 1.34 ( 1 ) Warrants issued related to the Progressive Care Merger on October 1, 2024. As of December 31, 2025 , and December 31, 2024 , there were 8,859,520 and 8,809,520 warrants outstanding, respectively. As of December 31, 2024 , the Company had registered warrants of 2,386,092 of the 8,809,520 warrants issued and outstanding. As of December 31, 2025 , the Company had registered warrants of 2,386,092 of the 8,859,520 warrants issued and outstanding. The Company determined that the warrants do not meet the definition of liability under FASB ASC Topic 480 and therefore classified the warrants as equity instruments. F- 31 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 17. Stock-Based compensation 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. There were no income tax benefits recognized from stock-based compensation during the years ended December 31, 2024 and 2023 due to cumulative losses and valuation allowances. Stock Award Plans The Company maintains stock incentive plans to attract, motivate and retain management, key employees, directors, and consultants. These plans provide for discretionary awards of, among others, stock options, stock awards, stock unit awards, and stock appreciation rights to participants (collectively, share-based awards). Restricted Stock Awards The following table summarizes our restricted stock awards activity: Number of Units Weighted Average Grant Date Fair Value Outstanding as of December 31, 2023 225,000 $ 4.33 Vested ( 220,000 ) 5.03 Forfeited ( 5,000 ) 5.37 Outstanding as of December 31, 2024 — — Granted 1,086,581 0.71 Vested ( 804,831 ) 0.73 Forfeited — — Outstanding as of December 31, 2025 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. F- 32 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Stock Options 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: Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Life (Years) Balance at January 1, 2024 2,245,333 $ 3.63 $ 2.88 4.26 Granted (1) 480,088 1.78 1.30 7.60 Cancelled ( 250,000 ) 5.35 — — Balance outstanding at December 31, 2024 2,475,421 $ 3.10 $ 2.54 4.35 Options exercisable at December 31, 2024 2,453,752 $ 3.11 $ 2.55 4.36 Balance at January 1, 2025 2,475,421 $ 3.10 $ 2.54 4.35 Granted — — — — Exercised — — — — Cancelled — — — — Expired ( 30,000 ) 2.46 2.46 — Balance outstanding at December 31, 2025 2,445,421 $ 3.10 $ 2.54 3.40 Options exercisable at December 31, 2025 2,445,421 $ 3.10 $ 2.54 3.40 ( 1 ) Stock options granted as a result of the Progressive Care Merger on October 1, 2024. 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. 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. 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: 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 %. F- 33 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 18. Income Taxes The Company accounts for income taxes under ASC Topic 740: Income Taxes which requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry forwards. 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 (loss) before income taxes for the years ended December 31, 2025 and 2024 were as follows (in thousands): Years Ended December 31, 2025 2024 Net loss before income taxes: Domestic $ ( 10,584 ) $ ( 22,681 ) Foreign 121 226 $ ( 10,463 ) $ ( 22,455 ) Income tax provision consisted of the following for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Income tax provision: Current: Federal $ — $ — State — — Foreign 71 Total current — 71 Deferred: Federal — — State — — Foreign — — Total deferred — — Total income tax provision $ — $ 71 The Company’s wholly owned subsidiary, GTC, is a United Kingdom (“UK”) Limited Company and files tax returns in the UK. Its estimated tax liability for December 31, 2025 and 2024 is approximately $ 0 and $ 56,000 , respectively. 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. F- 34 Table of Contents 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 Amount Rate U.S. federal statutory tax rate $ ( 2,223 ) 21 % State tax rate, net of federal effect ( 445 ) 4 % Change in valuation allowance 2,551 ( 24 )% Nontaxable or nondeductible items 38 ( 0 )% Other adjustments 79 ( 1 )% 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 $ ( 1,666 ) Deferred state income taxes, net ( 293 ) Provision true-up adjustments 72 Foreign taxes at rate different than US Taxes 71 Permanent differences 142 Other true-ups 4 Change in valuation allowance 1,741 Income tax provision $ 71 F- 35 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Deferred tax assets and liabilities are provided for significant income and expense items recognized in different years for tax and financial reporting purposes. Temporary differences, which give rise to a net deferred tax asset is as follows (in thousands): December 31, 2025 December 31, 2024 Deferred tax assets: Net operating loss carryforward $ 11,741 $ 9,625 Property plant and equipment and intangibles asset 313 280 Equity method investment loss 806 806 Accounts receivable 26 33 Inventory 27 17 Right-of-use assets 35 171 Accrued loss contingency 444 — Stock-based compensation 4,181 4,177 Interest limitation 619 619 Total deferred tax assets 18,192 15,728 Deferred tax liabilities: Book basis of intangible assets in excess of tax basis 208 150 Lease liabilities 36 181 Total deferred tax liabilities 244 331 Net deferred tax asset before valuation allowance 17,948 15,397 Less: valuation allowance ( 17,948 ) ( 15,397 ) Net deferred tax asset $ — $ — 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. The Company has not performed an IRC Section 382 analysis of the Progressive Care NOL carryforward, so it is not known as this time the amount of the NOL carryforward available to offset NextPlat future taxable income. IRC Section 382 imposes a limitation on a company to use historical NOLs and certain other tax attributes in the event of an ownership change. After consideration of all the evidence, both positive and negative, management has recorded a full valuation allowance at December 31, 2025 and 2024 , due to the uncertainty of realizing the deferred income tax assets. The change in the valuation allowance for 2025 was an increase of approximately $ 2.6 million. The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. U.S. federal income tax returns for 2022 and after remain open to examination. Generally, foreign income tax returns after 2021 remain open to examination. No income tax returns are currently under examination. As of December 31, 2025 and 2024 , the Company does not have any unrecognized tax benefits, and continues to monitor its current and prior tax positions for any changes. The Company recognizes penalties and interest related to unrecognized tax benefits as income tax expense. 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. F- 36 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 19. Leases The Company has entered into a number of lease arrangements under which the Company is the lessee. These leases are classified as operating leases. In addition, the Company has elected the short-term lease practical expedient in ASC Topic 842 related to real estate leases with terms of one year. The following is a summary of the Company’s lease arrangements. Finance Lease Agreements In May 2018, Progressive Care entered into a finance lease obligation to purchase pharmacy equipment with a cost of approximately $ 115,000 . The terms of the lease agreement require monthly payments of approximately $ 1,700 plus applicable tax over 84 months ending March 2025 including interest at the rate of 6 %. Operating Lease Agreements 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. F- 37 Table of Contents 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. The term of the lease is 66 months with a termination date of February 2026. The lease agreement calls for monthly payments that began in February 2021, of $ 4,310 , with an escalating payment schedule each year thereafter. Progressive Care leases its North Miami Beach pharmacy location under an operating lease agreement with a lease commencement date in September 2021. The term of the lease is 60 months with a termination date in August 2026. The lease calls for monthly payments of $ 5,237 , with an escalating payment schedule each year thereafter. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. Right-of-use assets for operating leases are periodically reduced by impairment losses. 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. 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 one of our leases. When a reassessment results in the re-measurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss. We recognized lease costs associated with all leases as follows (in thousands): Years Ended December 31, 2025 2024 Operating lease cost: Fixed rent expense $ 486 $ 603 Variable rent expense 182 65 Finance lease cost: Amortization of right-of-use assets 5 20 Interest expense — 1 Total Lease Costs $ 673 $ 689 F- 38 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Supplemental cash flow information related to leases was as follows (in thousands): Years Ended December 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 522 $ 427 Financing cash flows from finance leases 5 24 Total cash paid for lease liabilities $ 527 $ 451 Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2025 December 31, 2024 Operating leases: Operating lease right-of-use assets, net $ 189 $ 812 Operating lease liabilities: Current portion 158 404 Long-term portion 41 438 $ 199 $ 842 Weighted average remaining lease term (years) 1.14 2.25 Weighted average discount rate 5 % 4 % Finance leases: Finance lease right-of-use assets, net $ — $ 5 Finance lease liabilities: Current portion — 5 Long-term portion — — $ — $ 5 Weighted average remaining lease term (years) — 0.24 Weighted average discount rate — 6 % F- 39 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Future minimum lease payments are as follows (in thousands): Years Ending December 31, Finance Lease Operating Lease Total Future Lease Commitments 2026 $ — $ 163 $ 163 2027 — 40 40 2028 — — — 2029 — — — 2030 — — — Total lease payments to be paid — 203 203 Less: future interest expense — ( 4 ) ( 4 ) Lease liabilities — 199 199 Less: current maturities — ( 158 ) ( 158 ) Long-term portion of lease liabilities $ — $ 41 $ 41 Note 20. Reportable Segments The Company has two reportable segments: (i) e-Commerce Operations, which involves acquiring and leasing, primarily an e-commerce platform to collaborate with businesses to optimize their ability to sell their goods online, domestically, and internationally, and enabling customers and partners to optimize their e-commerce presence and revenue, and other related businesses and (ii) Healthcare Operations, which provides TPA, data management, COVID- 19 related diagnostics and vaccinations, prescription pharmaceuticals, compounded medications, telepharmacy services, anti-retroviral medications, medication therapy management, the supply of prescription medications to long-term care facilities, medication adherence packaging, contracted pharmacy services for 340B covered entities under the 340B Drug Discount Pricing Program, and health practice risk management. This organizational structure aligns with how the Company’s CODMs manage the business, including resource allocation and performance assessment, and further aligns with the Company’s product categories and the key markets the Company serves. The CODMs include the Company’s Chief Executive Officer and Chief Financial Officer. 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 Operations and Comprehensive Loss. 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. F- 40 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The following tables provide information about the Company’s reportable segments (in thousands): Year Ended December 31, 2025 e-Commerce Operations Healthcare Operations Eliminations Total e-Commerce revenue $ 14,608 $ — $ — $ 14,608 Pharmacy prescription and other revenue, net of PBM fees — 35,704 — 35,704 Pharmacy 340B contract revenue — 4,010 — 4,010 Revenues, net 14,608 39,714 — 54,322 Expenses: Cost of revenue 11,251 32,165 — 43,416 Selling, general and administrative 2,958 3,085 — 6,043 Salaries, wages and payroll taxes 2,905 7,802 — 10,707 Professional fees 1,510 754 — 2,264 Depreciation and amortization 278 262 — 540 Intangible asset amortization 102 — — 102 Loss on settlement of litigation — 250 — 250 Total expenses 19,004 44,318 — 63,322 Operating loss ( 4,396 ) ( 4,604 ) — ( 9,000 ) Interest expense 7 57 — 64 Other expense 434 965 — 1,399 Loss before income taxes ( 4,837 ) ( 5,626 ) — ( 10,463 ) Income taxes — — — - Net loss $ ( 4,837 ) $ ( 5,626 ) $ — $ ( 10,463 ) Year Ended December 31, 2024 e-Commerce Operations Healthcare Operations Eliminations Total e-Commerce revenue $ 13,791 $ — $ — $ 13,791 Pharmacy prescription and other revenue, net of PBM fees — 41,907 — 41,907 Pharmacy 340B contract revenue — 10,384 — 10,384 Revenues, net 13,791 52,291 — 66,082 Expenses: Cost of revenue 10,356 38,718 — 49,074 Selling, general and administrative 2,907 3,272 — 6,179 Salaries, wages and payroll taxes 3,599 9,704 — 13,303 Impairment loss — 13,653 — 13,653 Professional fees 2,900 1,741 ( 240 ) 4,401 Depreciation and amortization 438 350 — 788 Intangible asset amortization 101 1,608 — 1,709 Total expenses 20,301 69,046 ( 240 ) 89,107 Operating loss ( 6,510 ) ( 16,755 ) 240 ( 23,025 ) Interest expense 13 68 — 81 Other (income) expense ( 647 ) ( 244 ) 240 ( 651 ) Loss before income taxes ( 5,876 ) ( 16,579 ) — ( 22,455 ) Income taxes ( 71 ) — — ( 71 ) Net loss $ ( 5,947 ) $ ( 16,579 ) $ — $ ( 22,526 ) e-Commerce Operations Healthcare Operations Eliminations Total Total assets as of December 31, 2025 $ 12,748 $ 14,717 $ — $ 27,465 Total assets as of December 31, 2024 $ 19,044 $ 18,033 $ — $ 37,077 F- 41 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 21. Commitments and Contingencies Litigation 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 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. Fernandez and Barreto in connection with the merger of RXMD with and into a wholly owned subsidiary of NextPlat (the “Merger”), which Merger was completed on October 1, 2024 following approval by the stockholders of each of NextPlat and RXMD in stockholder meetings held on September 13, 2024 by NextPlat and RXMD, respectively. Among other things, the complaint asserts that the consideration paid to Mr. Weisberg and the other RXMD stockholders in connection with the Merger was insufficient. The monetary relief requested in the complaint includes compensatory and rescissory damages in an unspecified dollar amount. The complaint is pending in the Court of Chancery of the State of Delaware. The caption is Alan Jay Weisberg v. Charles M. Fernandez, Rodney Barreto and Nextplat Corp., and the case number is C.A. No. 20. 24 - 1097 -MTZ. 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. 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 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, 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. F- 42 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 22. Related Party Transactions 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. 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. The Company terminated Mrs. Fernandez’s employment with the Company on August 13, 2025. Note 23. Concentrations e-Commerce Operations concentrations: Customers: 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. Suppliers: 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): For the Years Ended December 31, 2025 2024 Amount % of Total Purchases Amount % of Total Purchases Iridium Satellite $ 2,738 22 % $ 1,602 17 % Garmin $ 1,882 15 % $ 1,242 13 % Globalstar Europe $ 1,373 11 % $ 975 10 % F- 43 Table of Contents NEXTPLAT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Geographic : 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, 2025 2024 Amount % of Total Amount % of Total Europe $ 7,451 51 % $ 6,812 49 % North America 4,683 32 % 4,529 33 % Asia and Pacific 1,968 13 % 1,720 12 % Africa 462 3 % 683 5 % South America 44 nm 47 nm $ 14,608 100 % $ 13,791 100 % Healthcare Operations concentrations: Suppliers: 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 . Customers: 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. Reimbursements from the top three significant PBMs were as follows: Year Ended December 31, 2025 A 31 % B 18 % C 15 % Year Ended December 31, 2024 A 29 % B 23 % C 20 % F-44