What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-16 compared with 2020-08-14 · 1039 added, 631 removed, 1589 unchanged (51% of the section changed)

Financial Statements

Company’s unaudited financial statements for the six months ended June 30, 2020 and for comparable periods in the prior

year are included below.

The financial statements should be read in conjunction with the notes to financial statements that follow.

Company’s unaudited financial statements for the nine months ended September 30, 2020 and for comparable periods in the

prior year are included below.

The financial statements should be read in conjunction with the notes to financial statements that

CORP AND SUBSIDIARIES

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS AS OF

September 30, 2020

December 31, 2019

Current assets:

2 unchanged sentences

Prepaid expenses

Other current

Other current assets

Total current assets

Property and equipment, net

Intangible assets,

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’

9 unchanged sentences

Stock subscription payable

Liabilities from

discontinued operations

Total current

Liabilities from discontinued operations

Total current liabilities

Long term liabilities:

Convertible debt, net of discount, unamortized,

$775,892 and $635,333, respectively

Lease liabilities

Convertible debt, net of discount, unamortized, $1,051,382 and $635,333, respectively

Lease liabilities –

Total Liabilities

3 unchanged sentences

Common stock, ($0.0001 par value;

50,000,000 shares authorized,

255,329 shares issued and outstanding as of June 30, 2020 and 121,216 outstanding at December 31, 2019, respectively)

50,000,000 shares authorized, 3,564,299 shares issued and outstanding as of September 30, 2020 and 121,216 outstanding at December 31, 2019, respectively)

Additional paid-in capital

2 unchanged sentences

(11,115,178 )

Accumulated other

comprehensive (income) loss

Accumulated other comprehensive (income) loss

Total stockholders’

Total liabilities

and stockholders’

Total liabilities and stockholders’

the accompanying notes to the unaudited condensed consolidated financial statements.

3 unchanged sentences

COMPREHNSIVE LOSS

Three Months Ended

September 30, 2020

Three Months Ended

September 30, 2019

Nine Months Ended

September 30, 2020

Nine Months Ended

September 30, 2019

Cost of sales

Operating expenses:

Selling and general

administrative

Salaries, wages

and payroll taxes

Selling and general administrative

Salaries, wages and payroll taxes

Stock based compensation

Professional fees

Depreciation and

operating expenses

Loss before other expenses and income

Depreciation and amortization

Total operating expenses

Loss before other expenses and income taxes

Other (income) expense

Change in fair value

of derivative instruments, net

Change in fair value of derivative instruments, net

Gain on debt extinguishment

1 unchanged sentence

Interest expense

currency exchange rate variance

Total other (income)

Net loss before

income (loss) tax expense

Foreign currency exchange rate variance

Total other (income) expense

Net loss before income (loss) tax expense

$ (1,100,451 )

$ (1,358,745 )

Provision for income taxes

2 unchanged sentences

Net income (loss)

Foreign currency

translation adjustments

Comprehensive

income (loss)

Foreign currency translation adjustments

Comprehensive income (loss)

$ (1,094,849 )

$ (1,378,585 )

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

Weighted number

of common shares outstanding –

Weighted number of common shares outstanding –

basic & diluted

Basic and diluted

net (loss) per share

Basic and diluted net (loss) per share

the accompanying notes to the unaudited condensed consolidated financial statements.

ORBITAL TRACKING CORP.

TRACKING CORP.

AND SUBSIDIARIES

ORBITAL TRACKING CORP.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Six Months Ended June 30, 2020

Balance, December 31, 2019

Issuance common stock from convertible

Comprehensive loss

Balance, June 30, 2020

the Six Months Ended June 30, 2019

the Nine Months Ended September 30, 2020

December 31, 2019

common stock from convertible debt

Comprehensive

September 30, 2020

the Nine Months Ended September 30, 2019

Preferred Stock -

$0.0001 Par Value

Balance, December 31, 2018

Beneficial conversion feature of convertible

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

1 unchanged sentence

Comprehensive loss

Balance, June

Balance, September 30, 2019

accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Three Months Ended June 30, 2020

Stock - Series B

Balance, March 31, 2020

Issuance common stock from convertible

Comprehensive loss

the Three Months Ended September 30, 2020

Preferred Stock -

$0.0001 Par Value

Balance, June 30, 2020

the Three Months Ended June 30, 2019

Issuance common stock from convertible debt

Comprehensive loss

Balance, September 30, 2020

the Three Months Ended September 30, 2019

Preferred Stock -

Balance, March 31, 2019

Beneficial conversion feature of convertible

Preferred Stock -

$0.0001 Par Value

Balance, June 30, 2019

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

1 unchanged sentence

Comprehensive loss

Balance, June

Balance, September 30, 2019

accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Six Months Ended June 30, 2020

Stock - Series F

December 31, 2019

Issuance common stock

from convertible debt

the Nine Months Ended September 30, 2020

Preferred Stock -

$0.0001 Par Value

Balance, December 31, 2019

Issuance common stock from convertible debt

Comprehensive loss

June 30, 2020

the Six Months Ended June 30, 2019

Balance, September 30, 2020

the Nine Months Ended September 30, 2019

Preferred Stock -

1 unchanged sentence

Preferred Stock -

$0.0001 Par Value

Balance, December 31, 2018

Beneficial conversion feature of convertible

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

1 unchanged sentence

Comprehensive loss

Balance, June

Balance, September 30, 2019

accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Three Months Ended June 30, 2020

March 31, 2020

common stock from convertible debt

Comprehensive

June 30, 2020

the Three Months Ended June 30, 2019

the Three Months Ended September 30, 2020

Preferred Stock -

1 unchanged sentence

Preferred Stock -

Balance, March 31, 2019

Beneficial conversion feature of convertible

$0.0001 Par Value

Balance, June 30, 2020

Issuance common stock from convertible debt

Comprehensive loss

Balance, September 30, 2020

the Three Months Ended September 30, 2019

Preferred Stock -

$0.0001 Par Value

Balance, June 30, 2019

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

1 unchanged sentence

Comprehensive loss

Balance, June

Balance, September 30, 2019

accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Six Months Ended June 30, 2020

Stock - Series I

the Nine Months Ended September 30, 2020

Preferred Stock -

$0.0001 Par Value

Balance, December 31, 2019

Issuance common stock from convertible

Issuance common stock from convertible debt

Comprehensive loss

Balance, June

the Six Months Ended June 30, 2019

December 31, 2018

conversion feature of convertible debt

shares converted to note payable

shares converted to common

Comprehensive

June 30, 2019

Balance, September 30, 2020

the Nine Months Ended September 30, 2019

Preferred Stock -

$0.0001 Par Value

Balance, December 31, 2018

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

Preferred shares converted to common

Comprehensive loss

Balance, September 30, 2019

accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Three Months Ended June 30, 2020

Stock - Series I

Balance, March 31, 2020

Issuance common stock from convertible

Comprehensive loss

the Three Months Ended September 30, 2020

Preferred Stock -

$0.0001 Par Value

Balance, June 30, 2020

the Three Months Ended June 30, 2019

Issuance common stock from convertible debt

Comprehensive loss

Balance, September 30, 2020

the Three Months Ended September 30, 2019

Preferred Stock -

1 unchanged sentence

Preferred Stock -

Balance, March 31, 2019

Beneficial conversion feature of convertible

$0.0001 Par Value

Balance, June 30, 2019

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

1 unchanged sentence

Comprehensive loss

Balance, June

Balance, September 30, 2019

accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Six Months Ended June 30, 2020

Stock –

the Nine Months Ended September 30, 2020

Preferred Stock –

$0.0001 Par Value

Balance, December 31, 2019

Issuance common stock from convertible

Issuance common stock from convertible debt

Comprehensive loss

Balance, June

the Six Months Ended June 30, 2019

Stock –

Balance, September 30, 2020

the Nine Months Ended September 30, 2019

Preferred Stock –

Stock –

Preferred Stock –

$0.0001 Par Value

Balance, December 31, 2018

Beneficial conversion feature of convertible

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

1 unchanged sentence

Comprehensive loss

Balance, June

Balance, September 30, 2019

CORP AND SUBSIDIARIES

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Three Months Ended June 30, 2020

Stock –

Balance, March 31, 2020

Issuance common stock from convertible

the Three Months Ended September 30, 2020

Preferred Stock –

$0.0001 Par Value

Balance, June 30, 2020

Issuance common stock from convertible debt

Comprehensive loss

Balance, September 30, 2020

the Three Months Ended September 30, 2019

Preferred Stock –

$0.0001 Par Value

Balance, June 30, 2019

the Three Months Ended June 30, 2019

Stock –

March 31, 2019

conversion feature of convertible debt

shares converted to note payable

shares converted to common

Comprehensive

June 30, 2019

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

Preferred shares converted to common

Comprehensive loss

Balance, September 30, 2019

accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Six Months Ended June 30, 2020

the Nine Months Ended September 30, 2020

$0.0001 Par Value

Balance, December 31, 2019

$ (11,115,178 )

Issuance common stock from convertible

Issuance common stock from convertible debt

Beneficial conversion feature of convertible debt

Issuance common stock for options exercised

Fair value of options granted

Stock based compensation

Comprehensive loss

Balance, June

Balance, September 30, 2020

$ (12,473,923 )

the Six Months Ended June 30, 2019

the Nine Months Ended September 30, 2019

$0.0001 Par Value

Balance, December 31, 2018

$ (9,735,422 )

Beneficial conversion feature of convertible

Beneficial conversion feature of convertible debt

Common issued for post-split adjustments

Preferred shares converted to note payable

Preferred shares converted to common

Exercise of options to common

Comprehensive loss

Balance, June

Balance, September 30, 2019

$ (10,731,617 )

accompanying notes to unaudited condensed consolidated financial statements.

the Three Months Ended June 30, 2020

Balance, March 31, 2020

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Three Months Ended September 30, 2020

$0.0001 Par Value

Balance, June 30, 2020

$ (11,373,472 )

Issuance common stock from convertible

Issuance common stock from convertible debt

Beneficial conversion feature of convertible debt

Issuance common stock for options exercised

Fair value of options granted

Stock based compensation

Comprehensive loss

Balance, June

Balance, September 30, 2020

$ (12,473,923 )

the Three Months Ended June 30, 2019

Balance, March 31, 2019

the Three Months Ended September 30, 2019

$0.0001 Par Value

Balance, June 30, 2019

$ (10,430,670 )

Beneficial conversion feature of convertible

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

1 unchanged sentence

Comprehensive loss

Balance, June

Balance, September 30, 2019

$ (10,731,617 )

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Six Months Ended June 30, 2020

Comprehensive

Stockholders’

Balance, December 31, 2019

Issuance common stock from convertible

Comprehensive loss

Balance, June

the Six Months Ended June 30, 2019

the Nine Months Ended September 30, 2020

Comprehensive

1 unchanged sentence

December 31, 2019

common stock from convertible debt

conversion feature of convertible debt

shares converted to note payable

shares converted to common

common stock for options exercised

value of options granted

based compensation

Comprehensive

June 30, 2019

accompanying notes to unaudited condensed consolidated financial statements.

the Three Months Ended June 30, 2020

September 30, 2020

the Nine Months Ended September 30, 2019

Comprehensive

Stockholders’

March 31, 2020

common stock from convertible debt

Comprehensive

June 30, 2020

the Three Months Ended June 30, 2019

Income (Loss)

Balance, December 31, 2018

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

Preferred shares converted to common

Comprehensive loss

Balance, September 30, 2019

accompanying notes to unaudited condensed consolidated financial statements.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

the Three Months Ended September 30, 2020

Comprehensive

Stockholders’

March 31, 2019

conversion feature of convertible debt

shares converted to note payable

shares converted to common

Income (Loss)

Balance, June 30, 2020

Issuance common stock from convertible debt

Beneficial conversion feature of convertible debt

Issuance common stock for options exercised

Fair value of options granted

Stock based compensation

Comprehensive loss

Balance, September 30, 2020

the Three Months Ended September 30, 2019

Comprehensive

June 30, 2019

Stockholders’

Income (Loss)

Balance, June 30, 2019

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

Preferred shares converted to common

Comprehensive loss

Balance, September 30, 2019

accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THE SIX MONTHS ENDED

THE NINE MONTHS ENDED

September 30, 2020

September 30, 2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss to

net cash provided by (used in) operating activities:

$ (1,358,745 )

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

Depreciation expense

1 unchanged sentence

Amortization of right to use

Amortization of debt discount

Stock based compensation

Fair value of options exercised

Fair value of options granted

Amortization of convertible debt discount

Change in fair value of derivative liabilities

6 unchanged sentences

Other current assets

Accounts payable

and accrued liabilities

Accounts payable and accrued liabilities

Lease liabilities

Provision for income

Net cash provided

by (used in) operating activities

Provision for income taxes

Contract liabilities

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property

and equipment

Net cash used in

investing activities

Purchase of property and equipment

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayments of note payable, related

Repayments of note payable, related party, net

Repayments from line of credit

2 unchanged sentences

Proceeds from note payable

Proceeds of convertible

notes payable

Net cash provided

by financing activities

Proceeds of convertible notes payable

Net cash provided by financing activities

Effect of exchange rate on cash

Net increase in cash

Net increase (decrease) in cash

Cash beginning of period

2 unchanged sentences

Cash paid during the period for

Non-cash adjustments during the period

Beneficial conversion

feature on convertible debt

Long term debt

issued in exchange for preferred stock

Conversion of

convertible debt into common shares

Obtaining right

of use asset for lease liability

Non-cash adjustments during the period for

Beneficial conversion feature on convertible debt

Long term debt issued in exchange for preferred stock

Conversion of convertible debt into common shares

Obtaining right of use asset for lease liability

the accompanying notes to the unaudited condensed consolidated financial statements.

9 unchanged sentences

to make the financial statements not misleading.

The unaudited financial statements for the six months ending June 30, 2020, are

not necessarily indicative of the results for the remainder of the fiscal year.

The consolidated financial statements as of December

31, 2019, have been audited by an independent registered public accounting firm.

The accounting policies and procedures employed

in the preparation of these condensed consolidated financial statements have been derived from the audited financial statements

of Orbsat Corp F/K/A/ Orbital Tracking Corp.

(the “Company”) for the year ended December 31, 2019, which are contained

in the Company’s annual report on Form 10-K as filed with the Securities and Exchange Commission (the “SEC”)

The unaudited financial statements for the nine months ending September 30, 2020,

are not necessarily indicative of the results for the remainder of the fiscal year.

The consolidated financial statements as of

December 31, 2019, have been audited by an independent registered public accounting firm.

The accounting policies and procedures

employed in the preparation of these condensed consolidated financial statements have been derived from the audited financial

statements of Orbsat Corp F/K/A/ Orbital Tracking Corp.

(the “Company”) for the year ended December 31, 2019, which

are contained in the Company’s annual report on Form 10-K as filed with the Securities and Exchange Commission (the “SEC”)

on March 30, 2020.

96 unchanged sentences

all means of collection have been exhausted and the potential for recovery is considered remote.

As of June 30, 2020, and 2019,

As of September 30, 2020, and

2019, there is an allowance for doubtful accounts of $14,749 and $0, respectively.

10 unchanged sentences

carrying value of inventories is recorded to cost of goods sold.

expenses amounted to $4,090 and $18,596, at June 30, 2020 and December 31, 2019, respectively.

expenses amounted to $1,784 and $18,596, at September 30, 2020 and December 31, 2019, respectively.

Prepaid expenses include prepayments

18 unchanged sentences

relevant translation rates are as follows:

for the three and six months ended June 30, 2020, closing rate at 1.2402 US$:

quarterly average rate at 1.241159 US$:

for the three and nine months ended September 30, 2020, closing rate at 1.2923 US$:

GBP, quarterly average rate at 1.293173 US$:

GBP and yearly average rate at 1.271713 US$:

GBP, for the three and six months ended June

30, 2019, closing rate at 1.269800 US$:

GBP, for the three and nine months ended

September 30, 2019, closing rate at 1.269800 US$:

GBP, quarterly average rate at 1.293793 US$:

64 unchanged sentences

liabilities is shown separately in the unaudited consolidated balance sheets as current liabilities.

At June 30, 2020 and December

31, 2019, we had contract liabilities of $35,741 and $41,207, respectively.

At September 30, 2020 and

December 31, 2019, we had contract liabilities of $40,427 and $41,207, respectively.

of Product Sales and Services

7 unchanged sentences

because the Company includes in revenue the related costs that the Company bills its customers.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

assets include customer contracts purchased and recorded based on the cost to acquire them.

15 unchanged sentences

management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows.

recorded an impairment charge of $0 and $50,000, during the six months ended June 30, 2020 and for the year ended December 31,

recorded an impairment charge of $0 and $50,000, during the nine months ended September 30, 2020 and for the year ended December

31, 2019, respectively.

14 unchanged sentences

estimated useful lives of property and equipment are generally as follows:

furniture and fixtures

expense for the three months ended June 30, 2020 and 2019 were $66,471 and $60,661, respectively.

Office furniture and fixtures

Computer equipment

Rental equipment

Website development

expense for the three months ended September 30, 2020 and 2019 were $67,447 and $62,859, respectively.

Depreciation expense for

the six months ended June 30, 2020 and 2019 were $131,795 and $121,625, respectively.

the nine months ended September 30, 2020 and 2019 were $199,242 and $184,484, respectively.

of long-lived assets

6 unchanged sentences

The Company did not consider it necessary to record any impairment

charges during the periods ended June 30, 2020 and June 30, 2019, respectively.

charges during the periods ended September 30, 2020 and September 30, 2019, respectively.

for Derivative Instruments

99 unchanged sentences

to the delay in its launch to our existing product lines.

For the six months ended June 30, 2020 and 2019, there were no additional

expenditures on research and development.

For the nine months ended September 30, 2020 and 2019, there were no

additional expenditures on research and development.

per Common Share

7 unchanged sentences

are excluded.

following are dilutive common stock equivalents during the six months ended:

following are dilutive common stock equivalents during the nine months ended:

September 30,

Convertible notes payable

4 unchanged sentences

shares of our common stock issuable upon conversion of $1,152,411 of Convertible Notes Payable at a conversion rate of $0.20

per share, as of June 30, 2020, not accounting for 9.99% beneficial ownership limitations.

per share, as of September 30, 2020, not accounting for 9.99% beneficial ownership limitations.

shares of our common stock issuable upon conversion of $805,000 of Convertible Notes Payable at a conversion rate of $0.10

per share, as of June 30, 2019, not accounting for 4.99% beneficial ownership limitations.

per share, as of September 30, 2019, not accounting for 4.99% beneficial ownership limitations.

June 15, 2020, Orbsat Corp (the “Company”) and the holders of the majority convertible promissory notes sold by the

5 unchanged sentences

9.99%, as described further in Note 10.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2019, the Company exchanged preferred shares to promissory notes and is treated as extinguishment of preferred shares.

4 unchanged sentences

income (loss) available to common stockholders during the period ended:

June 30, 2020

December 31, 2019

Nine Months Ended September 30, 2020

Year Ended December 31, 2019

$ (1,358,745 )

Preferred shares

redemption adjustment

Net loss available

to common shareholders

$ (1,379,756 )

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON

Weighted number

of common shares outstanding –

Preferred shares redemption adjustment

Net loss available to common shareholders

$ (1, 358,745 )

$ (1,177,832 )

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

Weighted number of common shares outstanding –

basic & diluted

Loss applicable

to common shareholders per share

Loss applicable to common shareholders per share

Party Transactions

86 unchanged sentences

24, 2019, when the Company entered into a three year lease for its UK office and warehouse for annual rent of £25,536 or

GBP:USD using exchange rate close for the six months ended June 30, 2020, GBP:USD 1.240200 or $31,670.

An entity may choose to

use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements

GBP:USD using exchange rate close for the nine months ended September 30, 2020, GBP:USD 1.292300 or $33,000.

An entity may choose

to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements

as its date of initial application.

6 unchanged sentences

and periods before January 1, 2019.

June 30, 2020, the Company had current and long-term operating lease liabilities of $27,341 and $34,536, respectively, and right

of use assets of $64,516.

September 30, 2020, the Company had current and long-term operating lease liabilities of $28,489 and $28,667, respectively, and

right of use assets of $59,906.

accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected

7 unchanged sentences

accompanying consolidated financial statements are prepared assuming the Company will continue as a going concern.

2020, the Company had an accumulated deficit of $11,373,472, negative working capital of $961,004 and net loss of $258,294 during

the six months ended June 30, 2020.

These factors raise substantial doubt about the Company’s ability to continue as a going

concern for one year from the issuance of the financial statements.

The ability of the Company to continue as a going concern

is dependent upon obtaining additional capital and financing.

Management intends to attempt to raise additional funds by way of

a public or private offering.

While the Company believes in the viability of its strategy to raise additional funds, there can

be no assurances to that effect.

Without additional capital, we will be unable to achieve our business objectives, and may be

forced to curtail our operations, reduce headcount, and/or temporarily cease our operations until requisite capital is secured.

The consolidated financial statements do not include any adjustments relating to classification of assets and liabilities that

might be necessary should the Company be unable to continue as a going concern.

30, 2020, the Company had an accumulated deficit of $12,473,923, positive working capital of $95,587 and net loss of $1,358,745

during the nine months ended September 30, 2020.

These factors raise substantial doubt about the Company’s ability to continue

as a going concern for one year from the issuance of the financial statements.

The ability of the Company to continue as a going

concern is dependent upon obtaining additional capital and financing.

Management intends to attempt to raise additional funds

by way of a public or private offering.

While the Company believes in the viability of its strategy to raise additional funds,

there can be no assurances to that effect.

Without additional capital, we will be unable to achieve our business objectives, and

may be forced to curtail our operations, reduce headcount, and/or temporarily cease our operations until requisite capital is

The consolidated financial statements do not include any adjustments relating to classification of assets and liabilities

that might be necessary should the Company be unable to continue as a going concern.

3 - INVENTORIES

June 30, 2020 and December 31, 2019, inventories consisted of the following:

September 30, 2020 and December 31, 2019, inventories consisted of the following:

September 30, 2020

December 31, 2019

Finished goods

Less reserve for obsolete inventory

the nine months ended September 30, 2020 and the year ended December 31, 2019, the Company did not make any change for reserve

for obsolete inventory.

the six months ended June 30, 2020 and the year ended December 31, 2019, the Company did not make any change for reserve for obsolete

PREPAID EXPENSES

expenses amounted to $4,090 at June 30, 2020 and $18,596 at December 31, 2019, respectively.

expenses amounted to $1,784 at September 30, 2020 and $18,596 at December 31, 2019, respectively.

Prepaid expenses include prepayments

4 unchanged sentences

5 - PROPERTY AND EQUIPMENT

June 30, 2020 and December 31, 2019, property and equipment, net of fully depreciated assets, consisted of the following:

September 30, 2020 and December 31, 2019, property and equipment, net of fully depreciated assets, consisted of the following:

September 30, 2020

December 31, 2019

Office furniture and fixtures

2 unchanged sentences

Website development

Less accumulated

expense for the three months ended June 30, 2020 and 2019 was $66,471 and $60,661, respectively.

Less accumulated depreciation

expense for the three months ended September 30, 2020 and 2019 were $67,447 and $62,859, respectively.

Depreciation expense for

the six months ended June 30, 2020 and 2019 was $131,795 and $121,625, respectively.

the nine months ended September 30, 2020 and 2019 were $199,242 and $184,484, respectively.

INTANGIBLE ASSETS

16 unchanged sentences

of customer contracts are included in depreciation and amortization.

For the six months ended June 30, 2020 and 2019, the Company

amortized $12,500, respectively.

For the nine months ended September 30, 2020 and 2019, the

Company amortized $18,750, respectively.

Future amortization of intangible assets is as follows:

4 unchanged sentences

asset, due to the delay in its launch to our existing product lines.

For the six months ended June 30, 2020 and 2019, there were

no additional expenditures on research and development.

For the nine months ended September 30, 2020 and 2019, there

were no additional expenditures on research and development.

7 - ACCOUNTS PAYABLE AND ACCRUED OTHER LIABILITIES

payable and accrued other liabilities consisted of the following:

September 30, 2020

December 31, 2019

Accounts payable

6 unchanged sentences

Accrued interest

Accrued other

Accrued other liabilities

LINE OF CREDIT

On October 9, 2019, Orbital

Satcom Corp., entered into a short-term loan agreement for $29,000, with Amazon.

The one-year term loan is paid monthly, has an

interest rate of 9.72%, with late payment penalty interest of 11.72%.

For the six months ended June 30, 2020 and 2019, the Company

recorded interest expense of $725 and $0, respectively.

The short-term line of credit balance as of June 30, 2020 and December

31, 2019, was $12,435 and $24,483, respectively.

October 9, 2019, Orbital Satcom Corp., entered into a short-term loan agreement for $29,000, with Amazon.

The one-year term loan

is paid monthly, has an interest rate of 9.72%, with late payment penalty interest of 11.72%.

For the nine months ended September

30, 2020 and 2019, the Company recorded interest expense of $725 and $0, respectively.

The short-term line of credit balance as

of September 30, 2020 and December 31, 2019, was $4,798 and $24,483, respectively.

CORP AND SUBSIDIARIES

17 unchanged sentences

the fiscal year ended December 31, 2019, the Company repaid $46,422 of the notes, leaving a balance of $121,848 as long-term notes

For the three months ended June 30, 2020 and 2019, the Company recorded interest of $1,823 and $1,235, respectively.

For the six months ended June 30, 2020 and 2019, the Company recorded interest in relation to the note of $3,659 and $1,329,

For the three months ended September 30, 2020 and 2019, the Company recorded interest of $1,843 and $1,843, respectively.

For the nine months ended September 30, 2020 and 2019, the Company recorded interest in relation to the note of $5,488 and $3,065,

respectively.

As of June 30, 2020, the company reclassed the note from long term to short term, resulting in current

portion of notes payable of $121,848.

CONVERTIBLE NOTES PAYABLE

As of September 30, 2020, the company reclassified the note from long term to short term, resulting in current portion

of notes payable of $121,848.

CORP AND SUBSIDIARIES

1 unchanged sentence

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONVERTIBLE NOTES PAYABLE

notes payable –

6 unchanged sentences

of $805,000 of its convertible promissory notes (the “Notes”).

The Notes bear

interest at a rate of 6% per annum, simple interest, and mature on the third anniversary of the Issue Date (the

“Maturity Date”), to the extent that the Notes and the principal amounts and any interest accrued thereunder (the

“Indebtedness”) have not been converted into shares of common stock of the Company.

Interest on the Notes will

accrue on a simple interest, non-compounded basis and will be added to the principal amounts on the Maturity Date or such

earlier date as may be due upon an Event of Default (as defined below), at which time all Indebtedness will be due and

payable, unless earlier converted into Conversion Shares (as defined below).

In the event that any amount due under the Notes

is not paid as and when due, such amounts will accrue interest at the rate of 12% per year, simple interest, non-compounding,

The Company may not pre-pay or redeem the Notes other than as required by the Agreement.

The Notes are general,

unsecured obligations of the Company.

The proceeds of the Notes will be used to repay certain outstanding indebtedness of the

Company and for general corporate purposes.

For the three months ended June 30, 2020 and 2019, the Company recorded simple

interest expense of $9,148 and $6,595, respectively.

For the six months ended June 30, 2020 and 2019, the Company

recorded simple interest expense of $23,261 and $6,595, respectively.

Notes bear interest at a rate of 6% per annum, simple interest, and mature on the third anniversary of the Issue Date (the “Maturity

Date”), to the extent that the Notes and the principal amounts and any interest accrued thereunder (the “Indebtedness”)

have not been converted into shares of common stock of the Company.

Interest on the Notes will accrue on a simple interest, non-compounded

basis and will be added to the principal amounts on the Maturity Date or such earlier date as may be due upon an Event of Default

(as defined below), at which time all Indebtedness will be due and payable, unless earlier converted into Conversion Shares (as

defined below).

In the event that any amount due under the Notes is not paid as and when due, such amounts will accrue interest

at the rate of 12% per year, simple interest, non-compounding, until paid.

The Company may not pre-pay or redeem the Notes other

than as required by the Agreement.

The Notes are general, unsecured obligations of the Company.

The proceeds of the Notes will

be used to repay certain outstanding indebtedness of the Company and for general corporate purposes.

For the three months ended

September 30, 2020, the Company recorded simple interest expense of $11,191 and $0, respectively.

For the nine months ended September

30, 2020 and 2019, the Company recorded simple interest expense of $34,452 and $87,779, respectively.

holders of the Notes (the “Holders”) have an optional right of conversion.

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amend Section 4 the beneficial ownership limitation upon conversion of the Notes from 4.99% to 9.99%;

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

amend Section 6.1 of the NPA to add “Most Favored Nation”

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of unamortized discount notes payable of $635,333.

On June 15, 2020, the

change in conversion price from $0.10 to $0.20, resulted in a difference in the carrying value of the balance of the note payable.

Under ASC 470-50-40-13, if it is determined that the original and new debt instruments are substantially different, the new debt

instrument shall be initially recorded at fair value, and that amount shall be used to determine the debt extinguishment gain

or loss to be recognized and the effective rate of the new instrument.

The original debt had a carrying value of $269,262 as of

June 15, 2020, the fair value of the amended debt was $0 ($792,932 principle netted with the $792,392 note payable discount),which

resulted a gain from the extinguishment of debt $269,262.

Further, as of June 30, 2020, the Company recorded a beneficial conversion

feature of the amended note of $17,041, resulting in a balance of unamortized discount notes payable of $775,892 as of June 30,

the six months ended June 30, 2020, the Holders converted $12,068 of the convertible debt to common stock, resulting in an issuance

of 120,676 common shares at the conversion rate of $0.10 per share.

Following the change in conversion rate on June 15, 2020,

the Holders converted an additional $2,687 of the convertible debt to common stock, resulting in an issuance of 13,437 common

shares at the conversion rate of $0.20 per share.

The balance of the convertible notes at June 30, 2020 is $790,245.

June 15, 2020, the change in conversion price from $0.10 to $0.20, resulted in a difference in the carrying value of the balance

of the note payable.

Under ASC 470-50-40-13, if it is determined that the original and new debt instruments are substantially

different, the new debt instrument shall be initially recorded at fair value, and that amount shall be used to determine the debt

extinguishment gain or loss to be recognized and the effective rate of the new instrument.

The original debt had a carrying value

of $269,262 as of June 15, 2020, the fair value of the amended debt was $0 ($792,932 principle netted with the $792,392 note payable

discount), which resulted a gain from the extinguishment of debt $269,262.

Further, as of June 30, 2020, the Company recorded

a beneficial conversion feature of the amended note of $17,041, resulting in a balance of unamortized discount notes payable of

$775,892 as of June 30, 2020.

For the three months ended September 30, 2020, the Company amortized the discount on the debt, to

interest expense of $348,563, resulting in a balance of unamortized discount notes payable of $427,329.

August 21, 2020, Orbsat Corp (the “Company”) entered into a Note Purchase Agreement (the “NPA2”) by and

among the Company and certain lenders set forth on the lender schedule to the NPA2 (the “Lenders”).

Pursuant to the

terms of the NPA2, the Company sold an aggregate principal amount of $933,000 of its convertible promissory notes (the “Notes”).

The Notes are general, unsecured obligations of the Company and bear simple interest at a rate of 6% per annum, and mature on

the third anniversary of the date of issuance (the “Maturity Date”), to the extent that the Notes and the principal

amounts and any interest accrued thereunder have not been converted into shares of the Company’s common stock.

that any amount due under the Notes is not paid as and when due, such amounts will accrue interest at the rate of 12% per year,

simple interest, non-compounding, until paid.

The Company may not pre-pay or redeem the Notes other than as required by the Agreement.

The Note holders have an optional right of conversion such that a Noteholder may elect to convert his Note, in whole or in part,

outstanding as of such time, into the number of fully paid and non-assessable shares of the Company’s common stock as determined

by dividing the outstanding indebtedness by $0.20, subject to certain adjustments.

This optional right of conversion is subject

to a beneficial ownership limitation of 9.99% of the number of shares of the Company’s common stock outstanding immediately

after giving effect to the share issuance upon conversion.

The holders of the Notes are granted demand registration rights and

pre-emptive rights.

In addition, the NPA2 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.

Upon the occurrence of an event

of default, a majority of the Holders may accelerate the maturity of the Indebtedness.

The closing of this offering took place

on August 21, 2020.

comparison to the fair market value of the common stock on August 21, 2020, and the fixed effective conversion rate of $0.20 per

common share, the lesser amount of the conversion feature or debt was $898,918 and presented a beneficial conversion feature.

Thus, the Company recorded a discount on the debt of $898,918 with a corresponding increase to additional paid in capital.

the three months ended, the Company amortized the discount on the debt, to interest expense of $274,865, resulting in a balance

of unamortized discount notes payable of $624,053.

the nine months ended September 30, 2020, the Holders converted a total of $585,589 of the convertible debt to common stock into

2,988,283 common shares, 120,676 at the conversion rate of $0.10 per share and 2,867,607 common shares at the conversion rate

of $0.20 per share.

The balance of the convertible notes at September 30, 2020, net of unamortized discount of $1,051,382,

CORP AND SUBSIDIARIES

5 unchanged sentences

$20,832 and has a term of 2 years, of which the first 6 months are deferred at an interest rate of 1%.

As of June 30, 2020, the

Company has recorded $10,416 as current portion of notes payable and $10,416 as notes payable long term.

As of September 30, 2020,

the Company has recorded $13,020 as current portion of notes payable and $7,812 as notes payable long term.

April 20, 2020, the Board of Directors of Orbsat Corp (the “Company”), approved for its wholly owned UK subsidiary,

Global Telesat Communications LTD (“GTC”), to apply for a Coronavirus Interruption Loan, offered by the UK government,

for an amount up to £250,000.

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$313,875 at an exchange rate of GBP:USD of 1.2555.

The Debenture bears interest at a rate of 3.99% 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

The Debenture has a term of 6 years from the date of drawdown, July 15, 2026, the “Maturity Date”.

first repayment of £4,166.67 (exclusive of interest) will be made 13 month(s) after July 16, 2020.

Voluntary prepayments

are allowed with 5 business days’

written notice and the amount of the prepayment is equal to 10% or more of the Limit or,

if less, the balance of the debenture.

The Debenture is secured by all GTC’s assets as well as a guarantee by the UK government,

with the proceeds of the Debenture are to be used for general corporate and working capital purposes.

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.

12 - STOCKHOLDERS’

24 unchanged sentences

authorized capital of the Company consists of 50,000,000 shares of common stock, par value $0.0001 per share and 3,333,333 shares

of preferred stock, par value $0.0001 per share, as of June 30 2020.

of June 30, 2020, there were 3,333,333 shares of Preferred Stock authorized.

of preferred stock, par value $0.0001 per share, as of September 30, 2020.

of September 30, 2020, there were 3,333,333 shares of Preferred Stock authorized.

December 5, 2017, pursuant to the approval of our board of directors and a majority of the shareholders in each class, we amended

18 unchanged sentences

stock, pursuant to which the Series E, I and L preferred stock was cancelled.

of June 30, 2020, there were no shares of Series A, B, C, D, E, F, G, H, I, J, K and L convertible preferred stock authorized,

of September 30, 2020, there were no shares of Series A, B, C, D, E, F, G, H, I, J, K and L convertible preferred stock authorized,

and no shares issued and outstanding.

2 unchanged sentences

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of June 30, 2020, there were 50,000,000 shares of common stock authorized and 255,329 shares issued and outstanding.

of September 30, 2020, there were 50,000,000 shares of common stock authorized and 3,564,299 shares issued and outstanding.

January 30, 2020, the Company issued an aggregate of 18,147 common stock upon the conversion of $1,815 of its convertible debt,

18 unchanged sentences

the conversion rate of $0.20 per share.

July 8, 2020, the Company issued an aggregate of 1,095 common stock upon the conversion of $219 of its convertible debt, at the

conversion rate of $0.20 per share.

July 16, 2020, the Company’s Board of Directors approved and the Company entered into a 12-month consulting agreement (“Consulting

Agreement”) with an unrelated third-party for capital raising advisory services and business growth and development services,

with the term renewable upon mutual consent of the parties.

Upon signing of the Consulting Agreement, the Company agreed to issue

20,000 restricted shares of its common stock to the consultant (the “Consulting Shares”), 5,000 additional restricted

shares of common stock to be issued quarterly until the consultant may receive cash compensation for its services, which will

be determined, upon completion of certain milestones, by the Company’s CEO.

July 23, 2020, the Company issued an aggregate of 2,342 common stock upon the conversion of $468 of its convertible debt, at the

conversion rate of $0.20 per share.

August 26, 2020, the Company issued an aggregate of 586,000 common stock upon the conversion of $117,200 of its convertible debt,

at the conversion rate of $0.20 per share.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 1, 2020, the Company issued an aggregate of 148,424 common stock upon the conversion of $29,685 of its convertible debt,

at the conversion rate of $0.20 per share.

September 2, 2020, the Company issued an aggregate of 21,753 common stock upon the conversion of $4,351 of its convertible debt,

at the conversion rate of $0.20 per share.

September 8, 2020, the Company issued an aggregate of 167,998 common stock upon the conversion of $33,600 of its convertible debt,

at the conversion rate of $0.20 per share.

September 10, 2020, the Company issued an aggregate of 572,285 common stock upon the conversion of $114,457 of its convertible

debt, at the conversion rate of $0.20 per share.

September 11, 2020, the Company issued an aggregate of 75,000 common stock upon the conversion of $15,000 of its convertible debt,

at the conversion rate of $0.20 per share.

September 14, 2020, the Company issued an aggregate of 331,472 common stock upon the conversion of $66,294 of its convertible

debt, at the conversion rate of $0.20 per share.

September 15, 2020, the Company issued an aggregate of 67,647 common stock upon the conversion of $13,529 of its convertible debt,

at the conversion rate of $0.20 per share.

September 16, 2020, the Company issued an aggregate of 151,373 common stock upon the conversion of $30,275 of its convertible

debt, at the conversion rate of $0.20 per share.

September 17, 2020, the Company issued an aggregate of 165,985 common stock upon the conversion of $33,197 of its convertible

debt, at the conversion rate of $0.20 per share.

September 21, 2020, the Company issued an aggregate of 28,901 common stock upon the conversion of $5,780 of its convertible debt,

at the conversion rate of $0.20 per share.

September 22, 2020, the Company issued an aggregate of 275,026 common stock upon the conversion of $55,005 of its convertible

debt, at the conversion rate of $0.20 per share.

September 30, 2020, the Company issued an aggregate of 216,199 common stock upon the conversion of $43,240 of its convertible

debt, at the conversion rate of $0.20 per share.

Incentive Plan

43 unchanged sentences

of $100,000 shall be treated as a Nonqualified Stock Option.

On June 14, 2018, we issued

18,333 new stock options to our executives and directors under the 2018 Incentive Plan.

All options issued have an exercise price

of $22.50 per share, with the exception of David Phipps, a Ten Percent Stockholder, whose exercise price is $24.00, vest in equal

quarterly instalments starting July 1, 2018 over the next two years and expire on July 1, 2021.

For the year ended December

31, 2018, the amount of vested options was 4,583.

On July 1, 2018, 2,292 options were fully vested and valued on the vesting date

at approximately $20.70 per option or a total of $47,422 using a Black-Scholes option pricing model with the following assumptions:

strike price of 22.50 stock price of $20.70 per share (based on the market price at close on July 1, 2018) volatility of 718%,

expected term of 3 years, and a risk-free interest rate of 2.69%.

On October 1, 2018, an additional 2,292 options were fully vested

and valued on the vesting date at approximately $20.70 per option or a total of $47,422 using a Black-Scholes option pricing model

with the following assumptions:

stock price of $20.70 per share (based on the market price close at grant date on June 14, 2018)

June 14, 2018, we issued 18,333 new stock options to our executives and directors under the 2018 Incentive Plan.

All options issued

have an exercise price of $22.50 per share, with the exception of David Phipps, a Ten Percent Stockholder, whose exercise price

is $24.00, vest in equal quarterly instalments starting July 1, 2018 over the next two years and expire on July 1, 2021.

year ended December 31, 2018, the amount of vested options was 4,583.

On July 1, 2018, 2,292 options were fully vested and valued

on the vesting date at approximately $20.70 per option or a total of $47,422 using a Black-Scholes option pricing model with the

following assumptions:

strike price of 22.50 stock price of $20.70 per share (based on the market price at close on July 1, 2018)

volatility of 718%, expected term of 3 years, and a risk-free interest rate of 2.69%.

In reference to this grant, the company

recorded stock-based compensation of $81,698 for the year ended December 31, 2018.

On December 18, 2018,

the Company cancelled the unvested portion of options previously granted on June 14, 2018, under the 2018 Incentive Plan totaling

On October 1, 2018, an additional 2,292

options were fully vested and valued on the vesting date at approximately $20.70 per option or a total of $47,422 using a Black-Scholes

option pricing model with the following assumptions:

stock price of $20.70 per share (based on the market price close at grant

date on June 14, 2018) volatility of 607%, expected term of 3 years, and a risk-free interest rate of 2.64%.

In reference to this

grant, the company recorded stock-based compensation of $81,698 for the year ended December 31, 2018.

December 18, 2018, the Company cancelled the unvested portion of options previously granted on June 14, 2018, under the 2018 Incentive

Plan totaling 13,750.

The grants cancelled will be returned to the Plan.

number of options cancelled to our officers and directors were as follows:

David Phipps, President,

CEO, and Director

David Phipps, President, CEO, and Director

Theresa Carlise, CFO

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shares of common stock were issued.

Incentive Plan

August 21, 2020, the Company’s Board of Directors approved and adopted the Company’s 2020 Equity Incentive Plan (the

“2020 Plan”).

The purpose of the 2020 Plan is to provide a means for the Company to continue to attract, motivate

and retain management, key employees, directors and consultants.

The 2020 Plan provides that up to a maximum of 2,250,000 shares

of the Company’s common stock, subject to adjustment, are available for issuance under the 2020 Plan.

A copy of the 2020

Plan is filed as Exhibit 10.2 to this Form 8-K and is incorporated by reference herein.

the adoption of the 2020 Plan, the Board approved issuances of certain stock options to its executives, directors and employees

under the 2020 Plan.

Specifically, the stock options issued to David Phipps, CEO (400,000), Theresa Carlise, former CFO (71,000)

and Hector Delgado, a Board member (21,000), all have an exercise price of $0.20 per share, respectively, fully vest upon issuance

and expire on August 20, 2030.

In addition, the Board approved additional 160,000 stock options to the Company’s 7 key employees,

on the same terms as those issued to the Company’s officers and director.

August 25, 2020, David Phipps exercised 400,000 options via a cashless exercise.

Additionally, on August 25, 2020, two employees

exercised 110,000 options through a cashless exercise.

The Company withheld newly acquired shares pursuant to the exercise of

The amount of common stock issued is calculated by using [Number of Options Exercising] minus [Exercise Price]

* [Number of Options Exercising] divided by [Prior Close OSAT Market Price].

As a result of the exercise 408,000

shares of common stock were issued.

CORP AND SUBSIDIARIES

61 unchanged sentences

For the year ended December 31, 2019 and 2018 the Company recorded stock-based compensation of $219,518 and $0, respectively.

the six months ended June 30, 2020 and 2019, the Company recorded no stock-based compensation, respectively.

options outstanding at June 30, 2020, as disclosed in the below table, have approximately $156,176 of intrinsic value at the end

of the period.

the adoption of the 2020 Plan, the Board approved issuances of certain stock options to its executives, directors and employees

under the 2020 Plan.

Specifically, the stock options issued to David Phipps, CEO (400,000), Theresa Carlise, CFO (71,000)

and Hector Delgado, a Board member (21,000), all have an exercise price of $0.20 per share, respectively, fully vest upon issuance

and expire on August 20, 2030.

In addition, the Board approved additional 160,000 stock options to the Company’s 7 key employees,

on the same terms as those issued to the Company’s officers and director.

The Company uses the Black-Scholes Model to

calculate the fair value of its options.

The valuation result generated by this pricing model is necessarily driven by the value

of the underlying common stock incorporated into the model.

Management determined the expected volatility was 496.13%, a risk

free rate of interest between 0.13%, and contractual lives of the options of ten years.

In connection with the stock option

grant, for the three months ended September 30, 2020, the Company recorded a charge for the fair value of options granted of $130,400.

options outstanding at September 30, 2020, as disclosed in the below table, have approximately $276,212 of intrinsic value at

the end of the period.

CORP AND SUBSIDIARIES

1 unchanged sentence

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

summary of the status of the Company’s outstanding stock options and changes during the six months ended June 30, 2020 is

Average Exercise

at January 1, 2020

outstanding at June 30, 2020

Options exercisable

at June 30, 2020

summary of the status of the Company’s outstanding warrants and changes during the six months ended June 30, 2020 is as

summary of the status of the Company’s outstanding stock options and changes during the nine months ended September 30,

2020 is as follows:

Balance at January 1, 2020

Balance outstanding at September 30, 2020

Options exercisable at September 30, 2020

summary of the status of the Company’s outstanding warrants and changes during the nine months ended September 30, 2020

is as follows:

Average Exercise

Balance at January 1, 2020

Balance outstanding

and exercisable at June 30, 2020

of June 30, 2020, and December 31, 2019, there were 4,000 warrants outstanding, respectively.

Balance outstanding and exercisable at September 30, 2020

of September 30, 2020, and December 31, 2019, there were 4,000 warrants outstanding, respectively.

13 - RELATED PARTY TRANSACTIONS

of June 30, 2020, the accounts payable due to related party includes advances for inventory and services due to David Phipps of

$91,912, accrued director fees of $15,000 due to Hector Delgado, Director and service and fees due to Theresa Carlise of $3,076.

Total related party payments due as of June 30, 2020 and December 31, 2019 are $109,988 and $51,071, respectively.

of September 30, 2020, the accounts payable due to related party includes advances for inventory and services due to David Phipps

of $24,062, accrued director fees of $5,000 due to Hector Delgado, Director and expenses due to Theresa Carlise of $3,120.

related party payments due as of September 30, 2020 and December 31, 2019 are $32,182 and $51,071, respectively.

Those related

2 unchanged sentences

Phipps, of which earned gross wages totaling $58,149 and $46,116 for

the six months ended June 30, 2020 and 2019, respectively.

the nine months ended September 30, 2020 and 2019, respectively.

14 - COMMITMENTS AND CONTINGENCIES

March 11, 2020, the World Health Organization announced that infections of the novel Coronavirus (COVID-19) had become pandemic,

and on March 13, the U.S.

President announced a National Emergency relating to the disease.

There is a possibility of continued

widespread infection in the United States and abroad, with the potential for catastrophic impact.

National, state and local authorities

have required or recommended social distancing and imposed or are considering quarantine and isolation measures on large portions

of the population, including mandatory business closures.

These measures, while intended to protect human life, are expected to

have serious adverse impacts on domestic and foreign economies of uncertain severity and duration.

Some economists are predicting

the United States will soon enter a recession.

The sweeping nature of the coronavirus pandemic makes it extremely difficult to

predict how the Company’s business and operations will be affected in the longer run, but we expect that it may materially

affect our business, financial condition and results of operations.

The extent to which the coronavirus impacts our results will

depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge

concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others.

the coronavirus outbreak has begun to have indeterminable adverse effects on general commercial activity and the world economy,

and our business and results of operations could be adversely affected to the extent that this coronavirus or any other epidemic

harms the global economy generally and/or the markets in which we operate specifically.

Any of the foregoing factors, or other

cascading effects of the coronavirus pandemic that are not currently foreseeable, could materially increase our costs, negatively

impact our revenues and damage the Company’s results of operations and its liquidity position, possibly to a significant

The duration of any such impacts cannot be predicted.

The Company may incur

significant delays and/or expenses in addition to, impairing its ability to secure additional financing, relating to the worldwide

COVID-19 (coronavirus) pandemic.

It is presently unknown whether and to what extent the Company’s supply chains may be affected

if the pandemic persists for an extended period of time.

The Company may incur significant delays or expenses relating to such

events outside of its control, which could have a material adverse impact on its business, operating results and financial condition.

The Company’s reliance on securing additional capital for its public company expenses may be impaired due to the effect

financial markets.

The inability to obtain appropriate financing, may affect its compliance requirements as a public

The Company has been using its working capital from its operating subsidiaries, to support its public company expenses.

The continued drain on its working capital have forced the Company to incur cutbacks, which may affect its future operating revenue

as well as, its ability to continue operations.

June 14, 2018, the Company entered into a two (2) year Employment Agreement (the “Phipps Agreement”) with Mr.

65 unchanged sentences

as set forth in such employment agreements and will terminate as of June 14, 2020.

On August 13, 2020,

the Company’s Board approved and authorized the continued employment of David Phipps and Theresa Carlise, as the Company’s

Chief Executive Officer and Chief Financial Officer, respectively, for a 30-day period, commencing as of August 14, 2020

and terminating on September 13, 2020, which employment term may be extended as agreed by the Company and the respective

executive officers on the substantially the same compensation and other material terms during the period of the continued employment

as those set forth in their previous employment agreements.

As previously disclosed, in March 2020, the Company and above-referenced

executive officers executed waivers of the provisions in their respective employment agreement requiring prior written notice

of non-renewal to the other party.

As a result, their respective employment terms with the Company were not automatically extended

as set forth in such employment agreements and terminated as of June 13, 2020.

August 13, 2020, the Company’s Board approved and authorized the continued employment of David Phipps and Theresa Carlise,

as the Company’s Chief Executive Officer and Chief Financial Officer, respectively, for a 30-day period, commencing as of

August 14, 2020 and terminating on September 13, 2020, which employment term may be extended as agreed by the Company and the

respective executive officers on the substantially the same compensation and other material terms during the period of the continued

employment as those set forth in their previous employment agreements.

As previously disclosed, in March 2020, the Company and

above-referenced executive officers executed waivers of the provisions in their respective employment agreement requiring prior

written notice of non-renewal to the other party.

As a result, their respective employment terms with the Company were not automatically

extended as set forth in such employment agreements and terminated as of June 13, 2020.

As previously disclosed on June 13, 2020,

the Company renewed their respective agreements for 30 days, commencing on June 14 through July 13, 2020.

Also, as previously

disclosed on July 13, 2020, the Company renewed their respective agreements for 30 days, commencing on July 14 through August

September 11, 2020, the Company’s Board approved and authorized the continued employment of David Phipps and Theresa Carlise,

as the Company’s Chief Executive Officer and Chief Financial Officer, respectively, for a 30-day period, commencing as of

September 14, 2020 and terminating on October 13, 2020, which employment term may be extended as agreed by the Company and the

respective executive officers on substantially the same compensation and other material terms during the period of the continued

employment as those set forth in their previous employment agreements.

As previously disclosed, in March 2020, the Company and

above-referenced executive officers executed waivers of the provisions in their respective employment agreement requiring prior

written notice of non-renewal to the other party.

As a result, their respective employment terms with the Company were not automatically

extended as set forth in such employment agreements and terminated as of June 13, 2020.

As previously disclosed on June 13, 2020,

the Company renewed their respective agreements for 30 days, commencing on June 14 through July 13, 2020.

As previously disclosed

on July 13, 2020, the Company renewed their respective agreements for another 30 days, commencing on July 14 through August 13,

As previously disclosed on August 14, 2020, the Company renewed their respective agreements for another 30 days, commencing

on August 14 through September 13, 2020.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 14, 2020, the Board of Directors (the “Board”) of Orbsat Corp (the “Company”) effected the following

changes to the Company’s executive management:

extended David Phipps’

(the Company’s Chief Executive Officer) employment with the Company for another 30-day period,

commencing on October 14, 2020, with his respective compensation and other material terms during the such term to remain substantially

the same as those set forth in the previous extensions to his employment agreement;

continued, following the October 16, 2020 expiration of Theresa Carlise’s CFO employment agreement with the Company, to

retain her services on a non-exclusive basis as the Company’s Comptroller to facilitate the CFO transition, for cash compensation

of $2,000/week.

Carlise will be so engaged at the pleasure of the Board and her engagement may be terminated upon one week’s

advance notice;

to appoint Thomas Seifert as the Company’s Chief Financial Officer for a period of 12 months commencing on October 19, 2020,

for cash compensation of $7,500/month, and such additional equity compensation as the Board may determine in the future, subject

to periodic review and adjustment by the Board in its sole discretion.

He will also be eligible to receive various other benefits

if and to the extent available to the employees of the Company.

November 12, 2020, the Company’s Board approved and authorized the continued employment of David Phipps, as the Company’s

Chief Executive Officer, for a 90-day period, commencing as of November 13, 2020, which employment term may be extended as agreed

by the Company and the executive officer on substantially the same compensation and other material terms during the period of

the continued employment as those set forth in his previous employment agreement.

As previously disclosed, in March 2020, the

Company and above-referenced executive officer executed a waiver of the provisions in his employment agreement requiring prior

written notice of non-renewal to the other party.

As a result, his employment terms with the Company were not automatically extended

as set forth in such employment agreement and terminated as of June 13, 2020.

As previously disclosed on June 13, 2020, the Company

renewed their respective agreements for 30 days, commencing on June 14 through July 13, 2020.

Also, as previously disclosed

on July 13, 2020, the Company renewed their respective agreements for 30 days, commencing on July 14 through August 13, 2020

renewed his agreement for 30 days, commencing on June 14 through July 13, 2020.

As previously disclosed on July 13, 2020, the

Company renewed his agreement for another 30 days, commencing on July 14 through August 13, 2020.

As previously disclosed on August

14, 2020, the Company renewed his agreement for another 30 days, commencing on August 14 through September 13, 2020.

As previously

disclosed on October 14, 2020, the Company renewed his agreement for another 30 days, commencing on October 14 through November

On November 12, 2020, the Company renewed his agreement for another 90 days, commencing November 13, 2020.

May 13, 2019, the Company entered into two consulting agreements (each, a “Consulting Agreement”

9 unchanged sentences

for another two months and expired on January 13, 2020.

For the six months ended June 30, 2020 and 2019, the Company recorded

For the nine months ended September 30, 2020 and 2019, the Company recorded

professional fees of $16,290 and $0, respectively, relating to the Consulting Agreements.

27 unchanged sentences

adjustment that would result in a negative ROU asset balance is recorded in profit or loss.

June 30, 2020, the Company had current and long-term operating lease liabilities of $27,341 and $34,536, respectively, and right

of use assets of $64,516.

September 30, 2020, the Company had current and long-term operating lease liabilities of $28,489 and $28,667, respectively, and

right of use assets of $59,906.

minimum lease payments under these leases are as follows, in thousands, (unaudited):

Ending December 31,

Years Ending December 31,

Remainder of 2020

Total undiscounted future non-cancellable

minimum lease payments

Total undiscounted future non-cancellable minimum lease payments

Imputed interest

3 unchanged sentences

and provides for rent expense on a straight-line basis over the lease terms.

Net rent expense for the six months ended June 30,

Net rent expense for the nine months ended September

30, 2020 and 2019 were $12,091 and $23,214, respectively.

5 unchanged sentences

15 - CONCENTRATIONS

accounted for 57.5% and 48.8% of the Company’s revenues during the six months ended June 30, 2020 and 2019, respectively.

For the three months ended June 30, 2020 and 2019, Amazon accounted for 58.5% and 51.0% of the Company’s revenues.

customer accounted for 10% or more of the Company’s revenues for either period.

accounted for 60.1% and 57.6% of the Company’s revenues during the nine months ended September 30, 2020 and 2019, respectively.

For the three months ended September 30, 2020 and 2019, Amazon accounted for 64.9% and 63.6% of the Company’s revenues.

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

CORP AND SUBSIDIARIES

2 unchanged sentences

following table sets forth information as to each supplier that accounted for 10% or more of the Company’s purchases for

the six months ended June 30, 2020 and 2019.

Globalstar Europe

the nine months ended September 30, 2020 and 2019.

September 30, 2020

September 30, 2019

Network Innovations

1 unchanged sentence

following table sets forth information as to each supplier that accounted for 10% or more of the Company’s purchases for

the three months ended June 30, 2020 and 2019.

Globalstar Europe

the three months ended September 30, 2020 and 2019.

September 30, 2020

September 30, 2019

Network Innovations

Cygnus Telecom

following table sets forth revenue as to each geographic location, for the six months ended June 30, 2020 and 2019:

Satcom Global

following table sets forth revenue as to each geographic location, for the nine months ended September 30, 2020 and 2019:

September 30, 2020

September 30, 2019

North America

1 unchanged sentence

Asia & Pacific

following table sets forth revenue as to each geographic location, for the three months ended June 30, 2020 and 2019:

Australia & Oceanic

following table sets forth revenue as to each geographic location, for the three months ended September 30, 2020 and 2019:

September 30, 2020

September 30, 2019

North America

1 unchanged sentence

Asia & Pacific

Australia & Oceanic

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

16 - SUBSEQUENT EVENTS

July 16, 2020, the Company’s Board of Directors approved and the Company entered into a 12-month consulting agreement (“Consulting

Agreement”) with an unrelated third-party for capital raising advisory services and business growth and development services,

with the term renewable upon mutual consent of the parties.

Upon signing of the Consulting Agreement, the Company agreed to issue

20,000 restricted shares of its common stock to the consultant (the “Consulting Shares”), 5,000 additional restricted

shares of common stock to be issued quarterly until the consultant may receive cash compensation for its services, which will

be determined, upon completion of certain milestones, by the Company’s CEO.

July 8, 2020, the Company issued an aggregate of 1,095 common stock upon the conversion of $219 of its convertible debt, at the

conversion rate of $0.20 per share.

July 22, the Company issued an aggregate of 20,000 shares of its common stock, as provided for, by the Consulting Agreement, dated

July 16, 2020, as described above.

July 23, 2020, the Company issued an aggregate of 2,342 common stock upon the conversion of $468 of its convertible debt, at the

conversion rate of $0.20 per share.

On August 13, 2020,

the Company’s Board approved and authorized the continued employment of David Phipps and Theresa Carlise, as the Company’s

Chief Executive Officer and Chief Financial Officer, respectively, for a 30-day period, commencing as of August 14, 2020 and terminating

on September 13, 2020, which employment term may be extended as agreed by the Company and the respective executive officers on

the substantially the same compensation and other material terms during the period of the continued employment as those set forth

in their previous employment agreements.

As previously disclosed, in March 2020, the Company and above-referenced executive officers

executed waivers of the provisions in their respective employment agreement requiring prior written notice of non-renewal to the

As a result, their respective employment terms with the Company were not automatically extended as set forth in such

employment agreements and terminated as of June 13, 2020.

As previously disclosed on June 13, 2020, the Company renewed their

respective agreements for 30 days, commencing on June 14 through July 13, 2020.

Also, as previously disclosed on July13, 2020,

the Company renewed their respective agreements for 30 days, commencing on July 14 through August 13, 2020.

October 14, 2020, the Board of Directors (the “Board”) of Orbsat Corp (the “Company”) effected the following

changes to the Company’s executive management:

extended David Phipps’

(the Company’s Chief Executive Officer) employment with the Company for another 30-day period,

commencing on October 14, 2020, with his respective compensation and other material terms during the such term to remain substantially

the same as those set forth in the previous extensions to his employment agreement;

continued, following the October 16, 2020 expiration of Theresa Carlise’s CFO employment agreement with the Company, to

retain her services on a non-exclusive basis as the Company’s Comptroller to facilitate the CFO transition, for cash compensation

of $2,000/week.

Carlise will be so engaged at the pleasure of the Board and her engagement may be terminated upon one week’s

advance notice;

to appoint Thomas Seifert as the Company’s Chief Financial Officer for a period of 12 months commencing on October 19, 2020,

for cash compensation of $7,500/month, and such additional equity compensation as the Board may determine in the future, subject

to periodic review and adjustment by the Board in its sole discretion.

He will also be eligible to receive various other benefits

if and to the extent available to the employees of the Company.

November 3, 2020, the Company issued an aggregate of 30,305 common stock upon the conversion of $6,061 of its convertible debt,

at the conversion rate of $0.20 per share.

November 5, 2020, the Company issued an aggregate of 129,241 common stock upon the conversion of $25,848 of its convertible debt,

at the conversion rate of $0.20 per share.

November 6, 2020, the Company issued an aggregate of 56,700 common stock upon the conversion of $11,340 of its convertible debt,

at the conversion rate of $0.20 per share.

November 11, 2020, the Company issued an aggregate of 100,000 common stock upon the conversion of $20,000 of its convertible debt,

at the conversion rate of $0.20 per share.

November 12, 2020, the Company’s Board approved and authorized the continued employment of David Phipps, as the Company’s

Chief Executive Officer, for a 90-day period, commencing as of November 13, 2020, which employment term may be extended as agreed

by the Company and the executive officer on substantially the same compensation and other material terms during the period of

the continued employment as those set forth in his previous employment agreement.

As previously disclosed, in March 2020, the

Company and above-referenced executive officer executed a waiver of the provisions in his employment agreement requiring prior

written notice of non-renewal to the other party.

As a result, his employment terms with the Company were not automatically extended

as set forth in such employment agreement and terminated as of June 13, 2020.

As previously disclosed on June 13, 2020, the Company

renewed his agreement for 30 days, commencing on June 14 through July 13, 2020.

As previously disclosed on July 13, 2020, the

Company renewed his agreement for another 30 days, commencing on July 14 through August 13, 2020.

As previously disclosed on August

14, 2020, the Company renewed his agreement for another 30 days, commencing on August 14 through September 13, 2020.

As previously

disclosed on October 14, 2020, the Company renewed his agreement for another 30 days, commencing on October 14 through November

On November 12, 2020, the Company renewed his agreement for another 90 days, commencing November 13, 2020.

On November 13, 2020,

the Company issued an aggregate of 194,472 common stock upon the conversion of $38,894 of its convertible debt, at the conversion

rate of $0.20 per share.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

70 unchanged sentences

and no shares issued and outstanding.

June 22, 2020, the Company issued an aggregate of 13,437 common stock upon the conversion of $2,687 of its convertible debt, at

the conversion rate of $0.20 per share.

We had net cash provided

by operations of $47,890 during the six months ended June 30, 2020.

At June 30, 2020, we had negative working capital of $961,004.

Additionally, at June 30, 2020, we had an accumulated deficit of $11,373,472 and stockholder’s equity of $387,304.

These matters and our expected needs for capital investments required to support operational growth raise substantial doubt about

our ability to continue as a going concern.

Our condensed consolidated financial statements do not include any adjustments

to reflect the possible effects on recoverability and classification of assets or the amounts and classification of liabilities

that may result from our inability to continue as a going concern.

July 8, 2020, the Company issued an aggregate of 1,095 common stock upon the conversion of $219 of its convertible debt, at the

conversion rate of $0.20 per share.

July 16, 2020, the Company’s Board of Directors approved and the Company entered into a 12-month consulting agreement (“Consulting

Agreement”) with an unrelated third-party for capital raising advisory services and business growth and development services,

with the term renewable upon mutual consent of the parties.

Upon signing of the Consulting Agreement, the Company agreed to issue

20,000 restricted shares of its common stock to the consultant (the “Consulting Shares”), 5,000 additional restricted

shares of common stock to be issued quarterly until the consultant may receive cash compensation for its services, which will

be determined, upon completion of certain milestones, by the Company’s CEO.

July 23, 2020, the Company issued an aggregate of 2,342 common stock upon the conversion of $468 of its convertible debt, at the

conversion rate of $0.20 per share.

August 26, 2020, the Company issued an aggregate of 586,000 common stock upon the conversion of $117,200 of its convertible debt,

at the conversion rate of $0.20 per share.

September 1, 2020, the Company issued an aggregate of 148,424 common stock upon the conversion of $29,685 of its convertible debt,

at the conversion rate of $0.20 per share.

September 2, 2020, the Company issued an aggregate of 21,753 common stock upon the conversion of $4,351 of its convertible debt,

at the conversion rate of $0.20 per share.

September 8, 2020, the Company issued an aggregate of 167,998 common stock upon the conversion of $33,600 of its convertible debt,

at the conversion rate of $0.20 per share.

September 10, 2020, the Company issued an aggregate of 572,285 common stock upon the conversion of $114,457 of its convertible

debt, at the conversion rate of $0.20 per share.

September 11, 2020, the Company issued an aggregate of 75,000 common stock upon the conversion of $15,000 of its convertible debt,

at the conversion rate of $0.20 per share.

September 14, 2020, the Company issued an aggregate of 331,472 common stock upon the conversion of $66,294 of its convertible

debt, at the conversion rate of $0.20 per share.

September 15, 2020, the Company issued an aggregate of 67,647 common stock upon the conversion of $13,529 of its convertible debt,

at the conversion rate of $0.20 per share.

September 16, 2020, the Company issued an aggregate of 151,373 common stock upon the conversion of $30,275 of its convertible

debt, at the conversion rate of $0.20 per share.

September 17, 2020, the Company issued an aggregate of 165,985 common stock upon the conversion of $33,197 of its convertible

debt, at the conversion rate of $0.20 per share.

September 21, 2020, the Company issued an aggregate of 28,901 common stock upon the conversion of $5,780 of its convertible debt,

at the conversion rate of $0.20 per share.

September 22, 2020, the Company issued an aggregate of 275,026 common stock upon the conversion of $55,005 of its convertible

debt, at the conversion rate of $0.20 per share.

September 30, 2020, the Company issued an aggregate of 216,199 common stock upon the conversion of $43,240 of its convertible

debt, at the conversion rate of $0.20 per share.

had net cash used by operations of $471,793 during the nine months ended September 30, 2020.

At September 30, 2020, we had a working

capital of $98,191.

Additionally, at September 30, 2020, we had an accumulated deficit of $12,450,262 and stockholder’s

equity of $995,442.

These matters and our expected needs for capital investments required to support operational growth raise

substantial doubt about our ability to continue as a going concern.

Our condensed consolidated financial statements do not include

any adjustments to reflect the possible effects on recoverability and classification of assets or the amounts and classification

of liabilities that may result from our inability to continue as a going concern.

Company may incur significant delays and/or expenses in addition to, impairing its ability to secure additional financing, relating

21 unchanged sentences

The Company has recorded the reimbursement of the 80% of wages, in the amount

of $32,333, in salaries, in its statement of operations for the six months ended June 30, 2020.

of $32,333, in salaries, in its statement of operations for the nine months ended September 30, 2020.

On May 4, 2020, the Bournemouth,

5 unchanged sentences

the 2020 business rates for the period starting April 1, 2020 thru March 31, 2021, of approximately £13,224 or $17,101,

at the quarterly average exchange rate at June 30, 2020 of 1.281097.

at the quarterly average exchange rate at September 30, 2020 of 1.293173.

May 8, 2020, Orbsat Corp was approved for the Payroll Protection Program (“PPP”) loan.

1 unchanged sentence

has a term of 2 years, of which the first 6 months are deferred at an interest rate of 1%.

As of June 30, 2020, the Company has

recorded $10,416 as current portion of notes payable and $10,416 as notes payable long term.

April 20, 2020, the Board of Directors of Orbsat Corp (the “Company”), approved for its wholly owned UK subsidiary,

Global Telesat Communications LTD (“GTC”), to apply for a Coronavirus Interruption Loan, offered by the UK government,

for an amount up to £250,000.

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$313,875 at an exchange rate of GBP:USD of 1.2555.

The Debenture bears interest at a rate of 3.99% 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

The Debenture has a term of 6 years from the date of drawdown, July 15, 2026, the “Maturity Date”.

first repayment of £4,166.67 (exclusive of interest) will be made 13 month(s) after July 16, 2020.

Voluntary prepayments

are allowed with 5 business days’

written notice and the amount of the prepayment is equal to 10% or more of the Limit or,

if less, the balance of the debenture.

The Debenture is secured by all GTC’s assets as well as a guarantee by the UK government,

with the proceeds of the Debenture are to be used for general corporate and working capital purposes.

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 Company anticipates

that the continued demands for working capital needed to support its operation and therefore anticipates engaging in various capital

raising efforts and cost-cutting measures, including, without limitation, temporary or permanent cutbacks to its personnel, curtailing

portion(s) of its operations, etc., which measures are likely to adversely affect the Company’s future operations, revenue

as well as its ability to continue its current operations.

Even if we raise sufficient capital through equity or debt financing,

strategic alliances or otherwise, there can be no assurances that the revenue or capital infusion will be sufficient to enable

us to sustain our business to a level where it will be profitable or generate positive cash flow.

Management’s plan to alleviate

the substantial doubt about the Company’s ability to continue as a going concern include attempting to improve its business

profitability, its ability to generate sufficient cash flow from its operations to meet its operating needs on a timely basis,

obtain additional working capital funds through debt and equity financings to eliminate inefficiencies in order to meet its anticipated

cash requirements.

However, there can be no assurance that these plans and arrangements will be sufficient to fund the Company’s

ongoing capital expenditures, working capital, and other requirements.

If we are unable to achieve these goals, our business would

be jeopardized and the Company may not be able to continue.

On June 15, 2020, the

Company’s Board approved and authorized continued employment of David Phipps and Theresa Carlise, as the Company’s

Chief Executive Officer and Chief Financial Officer, respectively, for a 30-day period, commencing as of June 14, 2020, which

employment term may be extended as agreed by the Company and the respective executive officers on the substantially the same compensation

and other material terms during the period of the continued employment as those set forth in their previous employment agreements.

As previously disclosed, in March 2020, the Company and above-referenced executive officers executed waivers of the provisions

in their respective employment agreement requiring prior written notice of non-renewal to the other party.

As a result, their

respective employment terms with the Company were not automatically extended as set forth in such employment agreements and terminates

as of June 14, 2020.

As of September 30, 2020, the Company

has recorded $13,020 as current portion of notes payable and $7,812 as notes payable long term.

April 20, 2020, the Board approved for its wholly owned UK subsidiary, Global Telesat Communications LTD (“GTC”),

to apply for a Coronavirus Interruption Loan, offered by the UK government, for an amount up to £250,000.

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$313,875 at an exchange rate

of GBP:USD of 1.2555.

The Debenture bears interest at a rate of 3.99% per annum over the Bank of England Base Rate (0.1% as of

July 16, 2020), payable monthly on the outstanding principal amount of the Debenture.

The Debenture has a term of 6 years from

the date of drawdown, July 15, 2026, the “Maturity Date”.

The first repayment of £4,166.67 (exclusive of interest)

will be made 13 month(s) after July 16, 2020.

Voluntary prepayments are allowed with 5 business days’

written notice and

the amount of the prepayment is equal to 10% or more of the Limit or, if less, the balance of the debenture.

The Debenture is

secured by all GTC’s assets as well as a guarantee by the UK government, with the proceeds of the Debenture are to be used

for general corporate and working capital purposes.

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.

Company anticipates that the continued demands for working capital needed to support its operation and therefore anticipates engaging

in various capital raising efforts and cost-cutting measures, including, without limitation, temporary or permanent cutbacks to

its personnel, curtailing portion(s) of its operations, etc., which measures are likely to adversely affect the Company’s

future operations, revenue as well as its ability to continue its current operations.

Even if we raise sufficient capital through

equity or debt financing, strategic alliances or otherwise, there can be no assurances that the revenue or capital infusion will

be sufficient to enable us to sustain our business to a level where it will be profitable or generate positive cash flow.

Management’s

plan to alleviate the substantial doubt about the Company’s ability to continue as a going concern include attempting to

improve its business profitability, its ability to generate sufficient cash flow from its operations to meet its operating needs

on a timely basis, obtain additional working capital funds through debt and equity financings to eliminate inefficiencies in order

to meet its anticipated cash requirements.

However, there can be no assurance that these plans and arrangements will be sufficient

to fund the Company’s ongoing capital expenditures, working capital, and other requirements.

If we are unable to achieve

these goals, our business would be jeopardized and the Company may not be able to continue.

June 15, 2020, the Company’s Board approved and authorized continued employment of David Phipps and Theresa Carlise, as

the Company’s Chief Executive Officer and Chief Financial Officer, respectively, for a 30-day period, commencing as of June

14, 2020, which employment term may be extended as agreed by the Company and the respective executive officers on the substantially

the same compensation and other material terms during the period of the continued employment as those set forth in their previous

employment agreements.

As previously disclosed, in March 2020, the Company and above-referenced executive officers executed waivers

of the provisions in their respective employment agreement requiring prior written notice of non-renewal to the other party.

a result, their respective employment terms with the Company were not automatically extended as set forth in such employment agreements

and terminates as of June 14, 2020.

On July 13, 2020, the Board extended their respective employments for another 30-day period.

On August 13,

2020, the Board resolved to negotiate and, when prepared, enter into executive employment agreements David Phipps as the Company’s

CEO and Theresa Carlise, the Company’s CFO, on substantially the same compensation and other material terms as those set

forth in their previous employment agreements.

of Operations for the Three and Six Months Ended June 30, 2020 compared to the Three and Six Months Ended June 30, 2019

Sales for the three and six months ended June 30, 2020 consisted primarily of sales of satellite phones, tracking devices,

On August 13, 2020 and on September 11, 2020, the Board resolved to negotiate and, when prepared, enter into executive employment

agreements David Phipps as the Company’s CEO and Theresa Carlise, the Company’s CFO, on substantially the same compensation

and other material terms as those set forth in their previous employment agreements.

October 14, 2020, the Board effected the following changes to the Company’s executive management:

extended David Phipps’

(the Company’s Chief Executive Officer) employment with the Company for another 30-day period,

commencing on October 14, 2020, with his respective compensation and other material terms during the such term to remain substantially

the same as those set forth in the previous extensions to his employment agreement;

continued, following the October 16, 2020 expiration of Theresa Carlise’s CFO employment agreement with the Company, to

retain her services on a non-exclusive basis as the Company’s Comptroller to facilitate the CFO transition, for cash compensation

of $2,000/week.

Carlise will be so engaged at the pleasure of the Board and her engagement may be terminated upon one week’s

advance notice;

to appoint Thomas Seifert as the Company’s Chief Financial Officer for a period of 12 months commencing on October 19, 2020,

for cash compensation of $7,500/month, and such additional equity compensation as the Board may determine in the future, subject

to periodic review and adjustment by the Board in its sole discretion.

He will also be eligible to receive various other benefits

if and to the extent available to the employees of the Company.

of Operations for the Three and Nine Months Ended September 30, 2020 compared to the Three and Nine Months Ended September 30,

Sales for the three and nine months ended September 30, 2020 consisted primarily of sales of satellite phones, tracking devices,

locator beacons, accessories and airtime plans.

For the three months ended June 30, 2020, revenues generated were $1,220,254 compared to $1,409,010 of revenues for the three months ended June 30, 2019, a decrease in total revenues

of $188,756 or 13.4%.

Total sales for Global Telesat Communications Ltd.

were $716,820 for the three months ended June 30, 2020,

as compared to $1,056,772 for the three months ended June 30, 2019, a decrease of $339,952 or 32.2%.

Total sales for Orbital Satcom

were $503,434 for the three months ended June 30, 2020 as compared to $352,238, for the three months ended June 30, 2019,

an increase of $151,196 or 42.9%.

the six months ended June 30, 2020, revenues generated were $2,688,357 compared to $2,707,381 of revenues for the six months ended

June 30, 2020 and 2019, a decrease in total revenues of $19,024 or 0.7%.

For the three months ended September 30, 2020, revenues generated were $1,475,393

compared to $1,746,525 of revenues for the three months ended September 30, 2019, a decrease in total revenues of $271,132 or

Total sales for Global Telesat Communications Ltd.

$1,666,937 for the six months ended June 30, 2020, as compared to $2,029,737 for the six months ended June 30, 2019, a decrease

of $362,800 or 17.9%.

The Company attributes this decrease to reduced recreational consumer demand as a result of lockdown measures

imposed across Europe during much of the quarter.

were $1,002,872 for the three months ended September 30, 2020, as compared

to $1,103,619 for the three months ended September 30, 2019, a decrease of $100,747 or 9.1%.

Total sales for Orbital Satcom Corp.

were $1,021,420 for the six months ended

June 30, 2020 as compared to $677,643, for the six months ended June 30, 2019, an increase of $343,777 or 50.7%.

attributes the increases in revenue to new product lines and significant increases in US e-commerce sales, offset by the decrease

in exchange rates from GBP:

During the three months ended June 30, 2020, cost of revenues decreased to $962,562 compared to $1,134,901,

for the three months ended June 30, 2019, a decrease of $172,339 or 15.2%.

Gross profit margins during the three months ended

June 30, 2020 were 21.1% as compared to 19.5% for the comparable period in the prior year.

During the six months ended June 30,

2020, cost of revenues decreased to $2,082,664 compared to $2,187,343, for the six months ended June 30, 2019, a decrease of $104,679

Gross profit margins during the six months ended June 30, 2020 were 22.5% as compared to 19.2% for the comparable period

in the prior year.

As indicated by the results for the three and six months ending June 30, 2020, our profit margins have increased

by 1.7% and 3.3%.

However, we cannot be certain that we can maintain the increased margin levels.

We expect our cost of revenues

as compared with sales growth to continue to increase during fiscal 2020 and beyond, as we expand our operations and begin generating

additional revenues under our current business.

However, to the extent costs will so increase, we are unable at this time to estimate

the amount of the expected increases.

Total operating expenses for the three months ended June 30, 2020, were $446,936, a decrease of $197,295

or 30.6%, from total operating expenses for the three months ended June 30, 2019, of $644,231 .

Total operating expenses

for the six months ended June 30, 2020, were $986,177, a decrease of $140,785 or 12.5%, from total operating expenses for the

six months ended June 30, 2019, of $1,126,962 .

Factors contributing to the decrease are described below.

general and administrative expenses were $146,965 and $172,749 for the three months ended June 30, 2020 and 2019, respectively,

were $472,521 for the three months ended September 30, 2020 as compared to $642,906, for the three months ended September 30,

2019, a decrease of $170,385 or 26.5%.

Selling, general and administrative expenses were $304,171 and $311,752 for the six months ended

June 30, 2020 and 2019, respectively, a decrease of $7,581 or 2.4%.

The decrease for the six months ended June 30, 2020, are attributable

to certain SG&A expenses that fluctuate with sales volatility, offset by an increase in Amazon fees as a percentage of sales

and a decrease in administrative expenses.

wages and payroll taxes were $150,404 and $186,423, for the three months ended June 30, 2020 and 2019, respectively, a

decrease of $36,019, or 19.3%.

Salaries, wages and payroll taxes were $346,046 and $359,742, for the six months ended June 30,

2020 and 2019, respectively, a decrease of $13,696, or 3.8%.

The decrease is a result of the Company’s UK subsidiary, GTCL,

reduction in staff, furloughed as part of the UK Coronavirus Job Retention Scheme.

The Company furloughs employees and pays their

full compensation and receives 80% of the paid wages through a grant as provided by the UK government, for the six months ended

June 30, 2020.

fees were $76,776 and $218,148 for the three months ended June 30, 2020 and 2019, respectively, a decrease of $141,372,

Professional fees were $191,665 and $321,343 for the six months ended June 30, 2020 and 2019, respectively, a decrease

the nine months ended September 30, 2020, revenues generated were $4,163,750 compared to $4,453,906 of revenues for the nine months

ended September 30, 2020 and 2019, a decrease in total revenues of $290,156 or 6.5%.

Total sales for Global Telesat Communications

were $2,677,039 for the nine months ended September 30, 2020, as compared to $3,128,211 for the nine months ended September

30, 2019, a decrease of $451,172 or 14.4%.

The Company attributes this decrease to reduced recreational consumer demand

as a result of lockdown measures imposed across Europe during much of the quarter.

Total sales for Orbital Satcom Corp.

were $1,486,711

for the nine months ended September 30, 2020 as compared to $1,325,695, for the nine months ended September 30, 2019, an increase

of $161,016 or 12.5%.

The decrease during the three and six months ended June 30, 2020 as compared to the same period in 2019,

is attributable to professional fees, see Note 14, Commitments and Contingencies, of which agreements expired on February 13,

and amortization expenses were $72,791 and $66,911 for the three months ended June 30, 2020 and 2019, respectively, an

The Company attributes the increases in revenue to new product lines and significant increases in US e-commerce

sales, offset by the decrease in exchange rates from GBP:

During the three months ended September 30, 2020, cost of revenues decreased to $1,076,929 compared to

$1,366,008, for the three months ended September 30, 2019, a decrease of $289,079 or 21.2%.

Gross profit margins during the three

months ended September 30, 2020 were 27.0% as compared to 21.8% for the comparable period in the prior year.

During the nine months

ended September 30, 2020, cost of revenues decreased to $3,159,593 compared to $3,553,351, for the nine months ended September

30, 2019, a decrease of $393,758 or 11.1%.

Gross profit margins during the nine months ended September 30, 2020 were 24.1% as

compared to 20.2% for the comparable period in the prior year.

As indicated by the results for the three and nine months ending

September 30, 2020, our profit margins have increased by 5.2% and 3.9%.

However, we cannot be certain that we can

maintain the increased margin levels.

We expect our cost of revenues as compared with sales growth to continue to increase during

fiscal 2020 and beyond, as we expand our operations and begin generating additional revenues under our current business.

to the extent costs will so increase, we are unable at this time to estimate the amount of the expected increases.

Total operating expenses for the three months ended September 30, 2020, were $872,835, an increase of

$289,799 or 49.7%, from total operating expenses for the three months ended September 30, 2019, of $583,036 .

Total operating

expenses for the nine months ended September 30, 2020, were $1,859,012, an increase of $149,014 or 8.7%, from total operating

expenses for the nine months ended September 30, 2019, of $1,709,998 .

Factors contributing to the decrease are described

general and administrative expenses were $182,813 and $210,600 for the three months ended September 30, 2020 and 2019,

respectively, a decrease of $27,787 or 13.2%.

Selling, general and administrative expenses were $486,984 and $522,352 for the

nine months ended September 30, 2020 and 2019, respectively, a decrease of $35,368 or 6.8%.

The increase for the nine months ended

September 30, 2020, are attributable to certain SG&A expenses that fluctuate with sales volatility, offset by an increase

in Amazon fees as a percentage of sales and a decrease in administrative expenses.

wages and payroll taxes were $196,629 and $176,762, for the three months ended September 30, 2020 and 2019, respectively,

an increase of $19,867, or 11.2%.

Salaries, wages and payroll taxes were $542,675 and $536,504, for the nine months ended September

30, 2020 and 2019, respectively, an increase of $6,171 or 1.1%.

The decrease is a result of the Company’s UK subsidiary,

GTCL, reduction in staff, furloughed as part of the UK Coronavirus Job Retention Scheme.

The Company furloughs employees and pays

their full compensation and receives 80% of the paid wages through a grant as provided by the UK government, for the nine months

ended September 30, 2020.

fees were $289,296 and $126,565 for the three months ended September 30, 2020 and 2019, respectively, an increase of $162,731,

Professional fees were $480,961 and $447,908 for the nine months ended September 30, 2020 and 2019, respectively, an

increase of $33,053, or 7.4%.

Depreciation and amortization expenses were $144,295 and $134,125 for the six months ended June 30,

The increase during the three and nine months ended September 30, 2020 as compared to the same period

in 2019, is attributable to professional fees, see Note 14, Commitments and Contingencies, of which agreements expired on February

and amortization expenses were $73,697 and $69,109 for the three months ended September 30, 2020 and 2019, respectively,

an increase of $4,588 or 6.6%.

Depreciation and amortization expenses were $217,992 and $203,234 for the nine months ended September

30, 2020 and 2019, respectively, an increase of $14,758 or 7.3%.

The increase was primarily attributable to the addition of fixed

assets, from the year ended December 31, 2019 of $70,194, and $26,159 for the six months ended June 30, 2020, offset by fully

amortized assets, as compared to the same period in the prior year.

assets, from the year ended December 31, 2019 of $70,194, and $30,758 for the nine months ended September 30, 2020, offset by

fully amortized assets, as compared to the same period in the prior year.

expect our expenses in each of these areas to continue to increase during fiscal 2020 and beyond as we expand our operations and

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Our total other (income) expense was $626,080 compared to $98,440 during the three months

ended June 30, 2020 and 2019, respectively, an increase in other (income) expense of $(232,555) or 1,389.0%.

Our total other (income)

expense was $(122,190) compared to $87,566 during the six months ended June 30, 2020 and 2019, respectively, an increase of other

income of $209,756 or 239.5%.

ended September 30, 2020 and 2019, respectively, an increase in other expense of $527,640 or 536%.

Our total other (income) expense

was $503,890 compared to $186,006 during the nine months ended September 30, 2020 and 2019, respectively, an increase of other

expense of $317,884 or 170.9%.

The increase is attributable to extinguishment of debt of $269,261, other income of $31,793, interest

expense $797,807 offset by interest earned of $80 and foreign currency exchange variance of $7,217.

We recorded net income before income tax of $26,566 for the three months ended June 30, 2020 as compared to a net

loss of $386,867, for the three months ended June 30, 2019.

For the six months ended June 30, 2020, we recorded a net loss before

income tax of $258,294 as compared to a net loss of $694,490, for the six months ended June 30, 2019.

The increase in the loss

is a result of the factors as described above.

We recorded a net loss before income tax of $1,100,451 for the three months ended September 30, 2020 as compared

to a net loss of $300,959, for the three months ended September 30, 2019.

For the nine months ended September 30, 2020, we recorded

a net loss before income tax of $1,358,745 as compared to a net loss of $995,449 for the nine months ended September 30, 2019.

The increase in the loss is a result of the factors as described above.

Comprehensive

We recorded a gain (loss) for foreign currency translation adjustments for the three and six months ended

June 30, 2020 and 2019, of $5,602 and $(218), and $(8,866) and $(399), respectively.

We recorded a gain (loss) for foreign currency translation adjustments for the three and nine months ended

September 30, 2020 and 2019, of $5,602 and $(494), and $(19,840) and $(893), respectively.

The fluctuations of the increase/decrease

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operate on an ongoing basis.

At June 30, 2020, we had a cash balance of $316,515.

Our working capital is a negative $(961,004)

at June 30, 2020.

current assets at June 30, 2020 increased 5.0% from December 31, 2019 and included cash, accounts receivable, prepaid expenses,

At September 30, 2020, we had a cash balance of $817,013.

Our working capital is $95,587 at September

current assets at September 30, 2020 increased 82% from December 31, 2019 and included cash, accounts receivable, prepaid expenses,

unbilled revenue, right of use, inventory and other current assets.

current liabilities at June 30, 2020 increased 30.3% from December 31, 2019 and included our accounts payable, due to related

current liabilities at September 30, 2020 increased 3.8% from December 31, 2019 and included our accounts payable, due to related

party, provision for income taxes, contract liabilities, current portion of notes payable, lease liabilities and other liabilities

in the ordinary course of our business.

June 30, 2020, the Company had an accumulated deficit of approximately $11,373,472, negative working capital of approximately

$961,004 and net loss of approximately $258,294 during the six months ended June 30, 2020.

For the year ended December 31, 2019,

the auditors’

opinion contained a going concern paragraph, which stated that the Company had an accumulated deficit of approximately

$11,115,178, negative working capital of approximately $567,022 and net loss of approximately $1,379,756 during the year ended

December 31, 2019.

These factors raise substantial doubt about the Company’s ability to continue as a going concern for

one year from the issuance of the financial statements.

The ability of the Company to continue as a going concern is dependent

upon obtaining additional capital and financing.

We may need or want to raise additional funds in the future;

however, these funds

may not be available to us when we need or want them, or at all.

If we cannot raise additional funds when we need them, our operations

and prospects could be materially negatively affected.

cash flows provided by operating activities for the six months ended June 30, 2020 amounted to $47,890 and were primarily attributable

September 30, 2020, the Company had an accumulated deficit of $12,473,923, positive working capital of $95,587 and net loss of

$1,358,745 during the nine months ended September 30, 2020.

These factors raise substantial doubt about the Company’s ability

to continue as a going concern for one year from the issuance of the financial statements.

The ability of the Company to continue

as a going concern is dependent upon obtaining additional capital and financing.

Management intends to attempt to raise additional

funds by way of a public or private offering.

While the Company believes in the viability of its strategy to raise additional

funds, there can be no assurances to that effect.

Without additional capital, we will be unable to achieve our business objectives,

and may be forced to curtail our operations, reduce headcount, and/or temporarily cease our operations until requisite capital

The consolidated financial statements do not include any adjustments relating to classification of assets and liabilities

that might be necessary should the Company be unable to continue as a going concern.

cash flows provided by operating activities for the nine months ended September 30, 2020 amounted to $471,800 and were primarily

attributable to our net loss of $1,358,745, total amortization expense of $18,750 and depreciation of $199,242, amortization of

discount on debt of $752,130, fair value of options granted of $130,400, gain on extinguishment of debt of $269,261 and

net change in assets and liabilities of $63,839, primarily attributable to a decrease in accounts receivable of $81,739, an increase

in inventory of $135,648, decrease in prepaid expenses of $16,812, a decrease in unbilled revenue of $877, a decrease in other

current assets of $57,800, decrease in accounts payable of $61,747, a decrease in contract liabilities of $780, a decrease in

lease liabilities of $21,562, and a decrease in provision for income taxes of $1,330.

cash flows used in operating activities for the nine months ended September 30, 2019 amounted to $603,183 and were primarily attributable

to our net loss of $996,194, total amortization expense of $18,750 and depreciation of $184,484, amortization of discount on debt

of $128,702 gain on extinguishment of debt of $269,261 and net change in assets and liabilities of $283,285, primarily attributable

to a decrease in accounts receivable of $91,738, a decrease in inventory of $7,877, decrease in prepaid expenses of $14,506,

a decrease in unbilled revenue of $11,114, a decrease in right of use of $19,163, a decrease in other current assets of $72,392,

increase in accounts payable of $109,681, a decrease in contract liabilities of $5,493, a decrease in lease liabilities

of $17,200, and a decrease in provision for income taxes of $1,330.

cash flows used in operating activities for the six months ended June 30, 2019 amounted to $393,784 and were primarily attributable

to our net loss of $695,247, total amortization expense of $12,500 and depreciation of $121,625, amortization of discount on notes

payable of $122,298, change in fair value of derivative liability of $69,677 gain on debt extinguishment of $134,677, long term

debt issued for services of $113,000 and net change in assets and liabilities of $2,961, primarily attributable to an increase

in accounts receivable of $6,441, an increase in inventory of $90,385, increase in prepaid expenses of 45,574, decrease in unbilled

revenue of $19,024, an increase in other current assets of $64,455, increase in accounts payable of $178,382, an increase in deferred

revenue of $5,786 and an increase in provision for income taxes of $702.

cash flows used in investing activities were $26,159 and $21,146, for the six months ended June 30, 2020 and 2019, respectively.

During the six months ended June 30, 2020 and June 30, 2019, we purchased property and equipment of $26,159 and $21,146, respectively.

cash flows provided by financing activities were $225,201 and $602,691, for the six months ended June 30, 2020 and 2019, respectively.

Net cash flows provided by financing activities were $225,201 for the six months ended June 30, 2020 and were for proceeds from

related party payable of $58,917, proceeds from convertible notes payable of $157,500, proceeds from note payable provided by

the US Payroll Protection Program (“PPP”) of $20,832 and offset by repayments of line of credit for $12,048.

cash flows provided by financing activities were $602,691 for the six months ended June 30, 2019 and were for proceeds from convertible

notes payable of $757,000, repayments of convertible notes payable of $87,778, repayments of amounts owed to related parties of

$20,109 and repayments of notes payable of $46,422.

of $211,330, change in fair value of derivative liability of $69,677, amortization of right of use of $2,196, gain on debt extinguishment

of $134,677, long term debt issued for services of $113,000 and net change in assets and liabilities of $66,939, primarily attributable

to an increase in accounts receivable of $74,915, an increase in inventory of $179,186, increase in prepaid expenses of $35,789,

decrease in unbilled revenue of $19,087, an increase in other current assets of $39,505, increase in accounts payable of $217,680,

an increase in contract liabilities of $25,356 and an increase in provision for income taxes of $333.

cash flows used in investing activities were $30,752 and $51,414, for the nine months ended September 30, 2020 and 2019, respectively.

During the nine months ended September 30, 2020 and 2019, we purchased property and equipment of $30,752 and $51,414, respectively.

cash flows provided by financing activities were $1,263,333 and $601,944, for the nine months ended September 30, 2020 and 2019,

respectively.

Net cash flows provided by financing activities were $1,263,333 for the nine months ended September 30, 2020 and

were for proceeds from convertible notes payable of $958,000, proceeds from note payable provided by the US Payroll Protection

Program (“PPP”) of $20,832, proceeds from note payable of $323,075 and offset by repayments to related party payable

of $18,888 and repayments of line of credit for $19,685.

cash flows provided by financing activities were $601,944 for the nine months ended September 30, 2019 and were for proceeds from

convertible notes payable of $757,000, repayments of convertible notes payable of $87,778, repayments of amounts owed to related

parties of $20,856 and repayments of notes payable of $46,422.

Sheet Arrangements

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have been eliminated in consolidation.

receivable and allowance for doubtful accounts

Company has a policy of reserving for questionable accounts based on its best estimate of the amount of probable credit losses

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all means of collection have been exhausted and the potential for recovery is considered remote.

As of June 30, 2020, and 2019,

As of September 30, 2020, and

2019, there is an allowance for doubtful accounts of $15,749 and $0, respectively.

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to the delay in its launch to our existing product lines.

For the six months ended June 30, 2020 and 2019, there were no additional

expenditures on research and development.

For the nine months ended September 30 30, 2020 and 2019, there were

no additional expenditures on research and development.

Currency Translation

13 unchanged sentences

relevant translation rates are as follows:

for the three and six months ended June 30, 2020, closing rate at 1.2402 US$:

quarterly average rate at 1.241159 US$:

for the three and nine months ended September 30, 2020, closing rate at 1.2923 US$:

GBP, quarterly average rate at 1.2932 US$:

GBP and yearly average rate at 1.2717 US$:

GBP, for the three and six months ended June

30, 2019, closing rate at 1.269800 US$:

GBP, for the three and nine months ended

September 30, 2019, closing rate at 1.2698 US$:

GBP, quarterly average rate at 1.2938 US$:

2 unchanged sentences

GBP, average rate at 1.2769 US$:

the three and six months ended June 30, 2020, Global Telesat Communications LTD, (GTCL) represents 58.7% and 62.0% of total company

sales and as such, currency rate variances have an impact on results.

the three months ended June 30, 2020, the net effect on revenues were impacted by the differences in exchange rate from quarterly

the three and nine months ended September 30, 2020, Global Telesat Communications LTD, (GTCL) represents 66.2% and 63.9% of total

company sales and as such, currency rate variances have an impact on results.

the three months ended September 30, 2020, the net effect on revenues were impacted by the differences in exchange rate from quarterly

average exchange of 1.2938 to 1.2853.

Had the quarterly average rate remained at 1.2853, sales for the three months ended June

Had the quarterly average rate remained at 1.2938, sales for the three months ended September

30, 2020 would have been higher by $2,304.

GTCL comparable sales in GBP, its home currency, decreased 22.0% or £271,079,

from £822,175to £577,401, for the three months ended June 30, 2020 as compared to June 30, 2019.

the six months ended June 30, 2020, the net effect on revenues were impacted by the differences in exchange rate from yearly average

exchange of 1.29379 to 1.26098.

Had the yearly average rate remained at 1.29379, sales for the six months ended June 30, 2020

from £1,233,770 to £962,692, for the three months ended September 30, 2020 as compared to September 30, 2019.

the nine months ended September 30, 2020, the net effect on revenues were impacted by the differences in exchange rate from yearly

average exchange of 1.2853 to 1.2717.

Had the yearly average rate remained at 1.2583, sales for the nine months ended September

30, 2020 would have been higher by $4,369.

GTCL comparable sales in GBP, its home currency, decreased 15.7% or £246,892, from £1,568,828

to £1,321,935, for the six months ended June 30, 2020 as compared to June 30, 2019.

the six months ended June 30, 2019, GTCL represented 75.0% of total company sales and as such, currency rate variances have an

impact on results.

For the six months ended June 30, 2019 the net effect on revenues were impacted positively by the differences

in exchange rate from yearly average exchange rate of 1.37595 to 1.293793.

Had the yearly average rate remained, sales would have

been higher by $128,891.

GTCL comparable sales in GBP, its home currency, decreased 4.2% or £68,489, from £1,637,317

to £1,568,828 for the six months ended June 30, 2019 as compared to June 30, 2018

GTCL comparable sales in GBP, its home currency, decreased 10.3% or £321,284,

from £3,116,839 to £2,795,555, for the nine months ended September 30, 2020 as compared to September 30, 2019.

the nine months ended September 30, 2019, GTCL represented 70.2% of total company sales and as such, currency rate variances have

an impact on results.

For the nine months ended September 30, 2019 the net effect on revenues were impacted negatively by the

differences in exchange rate from yearly average exchange rate of 1.35130 to 1.27327.

Had the yearly average rate remained, sales

would have been higher by $191,712.

GTCL comparable sales in GBP, its home currency, increased 3.7% or £86,535, from £2,370,301

to £2,456,836 for the nine months ended September 30, 2019 as compared to September 30, 2018.

Recognition and Unearned Revenue

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liabilities is shown separately in the condensed consolidated balance sheets as current liabilities.

At June 30, 2020 and 2019,

At September 30, 2020 and

2019, we had contract liabilities of approximately $118,449 and $45,057.

At December 31, 2019, we had contract liabilities of approximately

At December 31, 2019, we had contract liabilities of

approximately $41,207.

and Equipment

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The Company did not consider it necessary to record any impairment

charges during the periods ended June 30, 2020 and December 31, 2019, respectively.

charges during the periods ended September 30, 2020 and December 31, 2019, respectively.

value of financial instruments

38 unchanged sentences

impact as a result of adopting this ASU on the financial statements and related disclosures.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

January 2016, the FASB issued ASU No.

54 unchanged sentences

24, 2019, when the Company entered into a three year lease for its UK office and warehouse for annual rent of £25,536 or

USD using exchange rate close for the six months ended June 30, 2020, for liability of GBP:USD 1.240200 or $31,670.

may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial

statements as its date of initial application.

If an entity chooses the second option, the transition requirements for existing

leases also apply to leases entered into between the date of initial application and the effective date.

The entity must also

recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative

Consequently, financial information will not be updated, and the disclosures required under the new standard will not

be provided for dates and periods before January 1, 2019.

June 30, 2020, the Company had current and long-term operating lease liabilities of $27,341 and $34,536, respectively, and right

of use assets of $64,516.

USD using exchange rate close for the nine months ended September 30, 2020, for liability of GBP:USD 1.292300 or $33,000.

An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in

the financial statements as its date of initial application.

If an entity chooses the second option, the transition requirements

for existing leases also apply to leases entered into between the date of initial application and the effective date.

must also recast its comparative period financial statements and provide the disclosures required by the new standard for the

comparative periods.

Consequently, financial information will not be updated, and the disclosures required under the new standard

will not be provided for dates and periods before January 1, 2019.

September 30, 2020, the Company had current and long-term operating lease liabilities of $28,489 and $28,667, respectively, and

right of use assets of $59,906.

accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected

6 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements