What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-03-22 compared with 2020-03-30 · 1235 added, 1071 removed, 1143 unchanged (67% of the section changed)

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due to our limited internal audit functions and lack of ability to have multiple levels of transaction review.

The Company has

been reviewing and designing remedial measures to address these matters, including, among others, upgrading its accounting software.

Provided that the Company secured additional financing required to support such remedial measures, the Company expects to complete

the remediation efforts by the end of the 2021 fiscal year.

has been reviewing and designing remedial measures to address these matters, including, among others, upgrading its accounting

Provided that the Company secures additional financing required to support such remedial measures, the Company

expects to complete the remediation efforts by the end of the 2021 fiscal year.

Management’s

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directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until

removed from office in accordance with our bylaws.

The Board of Directors shall not appoint any new members or vote to increase

its size in the absence of the written consent of Mr.

The Board of Directors appoints officers who serve

their terms of office at the discretion of the Board of Directors.

their earlier resignation or removal from office in accordance with our bylaws.

The Board of Directors shall not appoint

any new members or vote to increase its size in the absence of the written consent of Mr.

The Board of Directors appoints

officers who serve their terms of office at the discretion of the Board of Directors.

of executive officers and directors

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organization in which such occupation and employment were carried out.

Phipps, Chief Executive Officer and Chairman , 54, has served as the Managing Director of GTCL since 2008 and as the President

of GTC, a competitor of the Company, from 2003 through 2014.

He has served as the President of Orbital Satcom since February 19,

2015, as Chairman of the Board of Directors of the Company since February 24, 2015 and Chief Executive Officer since February

Phipps was chosen as a director of the Company based on his knowledge of and relationships in the global satellite

communications business.

Phipps, Chief Executive Officer and Chairman , 55, has served as the Managing Director of GTCL since 2008 and as

the President of GTC, a competitor of the Company, from 2003 through 2014.

He has served as the President of Orbital Satcom since

February 19, 2015, as Chairman of the Board of Directors of the Company since February 24, 2015 and Chief Executive Officer since

February 25, 2015.

Phipps was chosen as a director of the Company based on his knowledge of and relationships in the global

satellite communications business.

Delgado , Director , 52, was appointed to the Board of Directors on May 27, 2015.

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leadership and entrepreneurial experience and particular familiarity with the military and governmental agencies.

Carlise , Chief Financial Officer, Treasurer and Secretary , 61, was appointed Chief Financial Officer, Treasurer

and Secretary on June 9, 2015.

She joined the Company from FTE Networks (OTCQX FTNW), a leading provider of infrastructure services

for the telecommunications and wireless sector, where she served as a financial advisor from May 2014 through March 2015, Chief

Financial Officer and Director from September 2011 through May 2014.

to FTE Networks, she served as the Chief Executive Officer, Chief Financial Officer and a director of Control System & Instrumentation

(CSI) Consultants, which provided information technology consulting and system design to the industrial and manufacturing sectors,

from July 2010 to September 2011 and as Chief Financial Officer and a director of Las Vegas Railway Express, Inc.

(OTCBB LVRE),

a developer of passenger rail transportation and related ancillary services, from December 2009 through July 2010.

also served as the Chief Financial Officer of Shearson Financial Network, Inc.

(OTCBB SFNN), and as Chief Financial Officer, senior

vice president and a director of National Record Mart, Inc.

(NASDAQ NRMI).

From October 2006 to November 2007 Ms.

Carlise served

as Chief Financial Officer of Shearson Financial Network, Inc., a direct to consumer mortgage banking company.

Declining market

conditions in the mortgage banking industry in 2007, contributed to the Company filing a voluntary petition under Chapter 11 of

the United States Bankruptcy Code in June of 2008.

Carlise holds a Bachelor of Science in Finance from Indiana University

of Pennsylvania.

Seifert, Chief Financial Officer, 49, was appointed to serve as the Company’s Chief Financial Officer on

October 19, 2020.

Prior to this appointment, Mr.

Seifert has more than 20 years of general management, global operations and financial

management expertise and has served as Chief Financial Officer for various public and private telecommunication companies during

Since January 2006 to present, Mr.

Seifert has served as a principal of Rocky Mountain Advisors Corp where he provides

management and financial advisory services.

Relationships

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the past ten years, none of our officers, directors, promoters or control persons have been involved in any legal proceedings

as described in Item 401(f) of Regulation S-K except as set forth herein.

as described in Item 401(f) of Regulation S-K.

Delgado is the only “independent”

director on the Board of Directors, as such term is defined under the Nasdaq listing

of the Board of Directors

We did not during 2019, and do not currently, have an audit committee.

If and when we satisfy the other initial

listing standards for listing our common stock on NASDAQ or another national exchange, we intend to establish an audit committee

of the Board of Directors.

We did not during 2019, and do not currently, have a compensation committee.

If and when we satisfy the other initial

listing standards for listing our common stock on NASDAQ or another national exchange, we intend to establish a compensation committee

of the Board of Directors.

We did not during 2019, and do not currently, have a nominating committee.

If and when we satisfy the other initial

listing standards for listing our common stock on NASDAQ or another national exchange, we intend to establish a nominating committee

have been no changes in the procedures for our shareholders to nominate directors on our Board.

of the Board of Directors

did not during 2020, and do not currently, have an audit committee.

The Board of Directors currently performs the functions of

an audit committee.

did not during 2020, and do not currently, have a compensation committee or nominating committee.

Leadership Structure and Role in Risk Oversight

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the risks facing our Company and that our Board leadership structure supports this approach.

of Business Conduct and Ethics

Board has adopted a Code of Business Conduct and Ethics that is applicable to the Company and to all our directors and officers

and persons performing similar functions, including our principal executive officer and principal financial officer.

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

We intend to disclose future amendments

to such code, or any waivers of its requirements, applicable to any principal executive officer, principal financial officer,

principal accounting officer or controller, or persons performing similar functions or our directors on our website identified

The inclusion of our website address in this prospectus does not include or incorporate by reference the information on

our website into this prospectus.

Section 16(a) Reports

16(a) of the Exchange Act, requires officers, directors and persons who own more than ten percent of a registered class of equity

securities to, within specified time periods, file certain reports of ownership and changes in ownership with the SEC.

solely upon a review of Forms 3 and Forms 4 filed electronically with the Commission during the Company’s most recent fiscal

year, the Company believes that all such forms required to be filed pursuant to Section 16(a) were timely filed as necessary by

the executive officers, directors and security holders required to file same during the fiscal year ended December 31, 2020 other

than the following late Forms 4 for Messrs.

Phipps and Delgado (filed on January 7, 2021 and each reporting one transaction),

Phipps and Delgado, and Ms.

Carlise (filed on September 1, 2020 and reporting three, four and four transactions, respectively),

and Form 3 for Thomas Seifert.

Executive Compensation

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of Regulation S-K) for the fiscal years ended December 31, 2020 and December 31, 2019.

Name and Principal Position

and Principal Position

Incentive Plan

Chief Executive

$ 52,455 (3)(4)(7)

President and Chairman (1)

$ 46,718 (3)(4)(7)

Theresa Carlise

Chief Financial

$ 18,911 (6)(8)

Secretary and Treasurer (2)

$ 14,873 (6)(8)

the grant date fair values of stock awards calculated in accordance with FASB Accounting Standards Codification Topic 718.

All stock awards have been adjusted for our 1:150 reverse stock split effective March 28, 2014 our 1:150 reverse stock split

effective March 8, 2018 and further on August 19, 2019, FINRA approved a reverse split of our common stock at a ratio of 1

May 26, 2017, Mr.

Phipps was granted a ten-year option to purchase shares of common stock.

The option is immediately exercisable

into 2,222 shares of common stock at a purchase price of $22.50 per share.

On June 14, 2018, Mr.

Phipps was granted a three-year

option to purchase 6,667 shares of common stock, vesting quarterly over the term at an exercise price per $24.00 per share.

On December 18, 2018, the company cancelled the unvested portion of the grant or 5,000 options and reissued a separate grant

of options to purchase 21,667 shares of common stock, fully vested with a term of five years at an exercise price of $2.55.

Company pays David Phipps a monthly fee of $3,000 or $36,000 per year, for his services as a director of the company, in addition

to his compensation as Chief Executive Officer and President.

June 14, 2018, the Company entered into a new employment agreement, which entitles him to $1,200 per month auto allowance.

For the years ended December 31, 2019 and 2018, the auto allowance was $14,400 and $8,748, respectively.

May 26, 2017, Ms.

Carlise was granted a ten-year option to purchase shares of common stock.

The option is immediately exercisable

into 1,667 shares of common stock at a purchase price of $22.50 per share.

On June 14, 2018, Ms.

Carlise was granted a three-year

option to purchase 3,333 shares of common stock, vesting quarterly over the term at an exercise price per $22.50 per share.

On December 18, 2018, the company cancelled the unvested portion of the grant or 2,500 options and reissued a separate grant

of options to purchase 10,833 shares of common stock, fully vested with a term of five years at an exercise price of $2.25.

June 14, 2018, the Company entered into a new employment agreement, which entitles her to $600 per month auto allowance.

For the year ended December 31, 2019 and 2018, the auto allowance was $7,200 and $3,920, respectively.

the years ended December 31, 2019 and 2018, medical insurance premiums for Ms.

Carlise totaling, $11,711 and $10,953,

respectively.

For the years ended December 31, 2019 and 2018, the Company paid on behalf of Mr.

Phipps, thru its UK subsidiary, GTCL, medical

insurance premiums totaling of $2,055 and $1,970, respectively.

For the years ended December 31, 2019 and 2018, the Company paid on behalf of Ms.

Carlise medical insurance premiums for totaling,

$11,711 and $10,953, respectively.

Disclosure to the Summary Compensation Table

May 26, 2017, the Company issued 2,222 options to Mr.

Phipps, 1,667 options to Theresa Carlise, 556 options to Hector Delgado,

its Director and 8,889 options to certain employees of the Company.

The employees are the adult children of our Chief Executive

The options were issued outside of the Company’s 2014 Equity Incentive Plan and are not governed by the 2014 Plan.

The options have an exercise price of $22.50 per share, vest immediately, and have a term of ten years.

The 13,333 options were

valued on the grant date at approximately $45.00 per option or a total of $600,000 using a Black-Scholes option pricing model

with the following assumptions:

stock price of $45.00 per share (based on the closing price of the Company’s common stock

of the date of issuance), volatility of 736%, expected term of 10 years, and a risk-free interest rate of 1.30%.

In connection

with the stock option grant, for the years ended December 31, 2017, the Company recorded stock-based compensation of $600,000.

June 14, 2018, we issued 11,667 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 installments starting July 1, 2018 over the next two years and expire on July 1, 2021.

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 $20.69 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 $20.69 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 $20.69 per option or a total of $47,422 using

a Black-Scholes option pricing model with the following assumptions:

stock price of $20.69 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%.

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

Former Chief Financial

Secretary and Treasurer (3)

Phipps was elected as Chairman of the Board of Directors of the Company since February 24, 2015 and Chief Executive Officer

since February 25, 2015.

For service as Chief Executive Officer in 2020, On August 21, 2020, Mr.

Phipps was granted a ten-year

option to purchase shares of common stock.

The option is immediately exercisable into 400,000 shares of common stock at a

purchase price of $0.20 per share.

On December 31, 2020, Mr.

Phipps was granted a ten-year option to purchase 1,500,000 shares

of common stock, at an exercise price per $0.25 per share.

We recognized a $455,600 expense in 2020 on the vesting of

such options.

Seifert was appointed Chief Financial Officer on October 19, 2020.

On August 28, 2020, Mr.

granted a ten-year option to purchase shares of common stock.

The option is immediately exercisable into 15,000 shares

of common stock at a purchase price of $0.20 per share.

On December 31, 2020, Mr.

Seifert was granted a ten-year option

to purchase 250,000 shares of common stock, at an exercise price per $0.25 per share.

We recognized a $65,500 expense

in 2020 on the vesting of such options.

Carlise served as our Chief Financial Officer until October 19, 2020.

On August 21, 2020, Ms.

Carlise was granted a ten-year

option to purchase shares of common stock.

The option is immediately exercisable into 71,000 shares of common stock at a purchase

price of $0.20 per share.

We recognized a $14,200 expense in 2020 on the vesting of such options.

shown in the “Option Awards”

column reflect the aggregate grant date fair value calculated in accordance with

FASB ASC 718 for the respective fiscal year with respect to stock options granted to our named executive officers.

reflect our accounting for these option grants and do not necessarily correspond to the actual values that may be realized

by our named executive officers.

The grant date fair values of these option grants were calculated at the grant date using

the Black-Scholes option pricing model.

The assumptions used for the valuations are set forth in Note 13 –

Shareholders’

Equity in the Notes included elsewhere in this Annual Report.

Pursuant to SEC rules, we disregarded the estimates of forfeitures

related to service-based vesting conditions.

See the “Outstanding Equity Awards at Fiscal Year-End”

table in this

Annual Report and related notes for information with respect to stock options granted prior to fiscal 2019.

and values of awards reported in “All Other Compensation”

are set forth in the following table:

Insurance Coverage ($)

Allowance ($)

of Director Compensation ($)

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

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The Agreement terminates and supersedes the Original Agreements and any subsequent amendments, effective as of the June 14, 2018.

the Company had a two-year Executive Employment Agreement with Mr.

Phipps, effective January 1, 2016.

Under the Employment Agreement,

Phipps will serve as the Company’s Chief Executive Officer and President and received an annual base salary equal to

the sum of $144,000 and £48,000, or $61,833 at the yearly conversion rate of 1.288190.

Phipps is also eligible for bonus

compensation in an amount equal to up to fifty (50%) percent of his then-current base salary if the Company meets or exceeds criteria

adopted by the Compensation Committee, if any, or Board and equity awards as may be approved in the discretion of the Compensation

Committee or Board.

On January 1, 2018, the agreement automatically renewed for another year.

on June 14, 2018, we entered into a new Employment Agreement, (“Agreement”) with our Chief Financial Officer, Theresa

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

will terminate as of June 14, 2020.

to June 14, 2018, the Company had a one-year agreement for Ms.

Carlise, as its Chief Financial Officer, Treasurer and Secretary.

The agreement provided for an annual compensation of $140,000 as well as medical benefits.

The agreement was effective December

1, 2016 and had an automatic renewal clause whereby the agreement renews itself for another year, if not cancelled by the Company

The agreement had been automatically extended for an additional term of one year on December 1, 2017.

to the base salary of $140,000 annually, Ms.

Carlise was eligible to receive an annual cash bonus if the Company meets or exceeds

criteria adopted by the Compensation Committee of the Board of Directors and shall be eligible for grants of awards under stock

option or other equity incentive plans of the Company.

December 18, 2018, the Company cancelled the unvested options as follows;

5,000 options to David Phipps, 2,500 options to Theresa

Carlise, 1,250 options to Hector Delgado, its Director and 5,000 options to certain employees of the Company.

Total grants cancelled

were 13,750 and were returned to the Plan.

on December 18, 2018, we issued 55,417 new stock options to our executives and directors under the 2018 Incentive Plan.

issued have an exercise price of $2.25 per share, with the exception of David Phipps, (whose options have an exercise price of

$2.55), are fully vested and expire on December 17, 2023.

The options were valued on the grant date at approximately $2.25 per

option or a total of $124,674 using a Black-Scholes option pricing model with the following assumptions:

strike price of $2.25

stock price of $2.25 per share (based on the market price at close on December 17, 2018) volatility of 773%, expected term of

5 years, and a risk-free interest rate of 2.69%.

was set to terminate as of June 14, 2020.

After a series of monthly extensions, Ms.

Carlise’s agreement terminated

October 19, 2020 and Mr.

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

the years ended December 31, 2020 and 2019, the Company recorded stock-based compensation of $830,900 and $0, respectively.

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

granted outside of the Company’s Stock Option Plan.

granted outside of the Company’s 2018 and 2020 Stock Option Plan.

Director Compensation

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are included in Summary Compensation Table.

Disclosure to the Director Compensation Table

Company pays David Phipps a monthly fee of $3,000 for his services as a director of the company, in addition to his compensation

as Chief Executive Officer and President.

December 29, 2016, the Board of Directors approved increasing its quarterly payments from $3,500 to $5,000, to its independent

director, Hector Delgado.

December 16, 2016, the Company issued options to Mr.

Phipps, to purchase up to 4,444 shares of common stock.

The options have

an exercise price of $22.50 per share, vest immediately, and have a term of ten years.

The options were valued on the grant date

at approximately $45.00 per option.

The amount is disclosed in the executive compensation table as well as, with the director

compensation.

May 26, 2017, the Company issued 556 options to Hector Delgado, its Director and 2,222 options to David Phipps.

The options were

issued outside of the Company’s 2014 Equity Incentive Plan and are not governed by the 2014 Plan.

The options have an exercise

price of $22.50 per share, vest immediately, and have a term of ten years.

The options were valued on the grant date at approximately

$45.00 per option or a total of $200,000 using a Black-Scholes option pricing model with the following assumptions:

of $3.00 per share (based on the closing price of the Company’s common stock of the date of issuance post-split), volatility

of 736%, expected term of 10 years, and a risk-free interest rate of 1.30%.

Additionally, on May 26, 2017, the Company issued

another 8,867 options to certain employees of the Company.

The options were issued outside of the Company’s 2014 Equity

Incentive Plan and are not governed by the 2014 Plan.

The options have an exercise price of $22.50 per share, vest immediately,

and have a term of ten years.

The options were valued on the grant date at approximately $45.00 per option.

In connection with

the stock option grant, as described above, the Company recorded stock-based compensation for the year ended December 31, 2017

June 14, 2018, we issued 6,667 stock options to David Phipps and 1,667 options to Hector Delgado, its Director.

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 installments starting July 1, 2018 over the next two years and expire on July 1, 2021, pursuant

to the 2018 Incentive Plan.

On December 18, 2018, the Company cancelled the unvested options for David Phipps of 5,000 and cancelled

1,250 options for Hector Delgado, its Director.

Also, on December 18, 2018, we issued we issued 21,667 stock options Mr.

and 4,583 options to Hector Delgado, its Director, pursuant to the 2018 Incentive Plan.

All options issued have an exercise price

of 2.25 per share, with the exception of David Phipps, a Ten Percent Stockholder, whose exercise price is $2.55, are fully vested

and expire on December 17, 2023.

Phipps and Mr.

Delgado receive no compensation from the Company except as described above.

Incentive Plan

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

The purpose of the Plan is to

provide a means for the Company to continue to attract, motivate and retain management, key employees, consultants and other independent

contractors, and to provide these individuals with greater incentive for their service to the Company by linking their interests

in the Company’s success with those of the Company and its shareholders.

An Award may also be granted to any consultant,

agent, advisor or independent contractor for bona fide services rendered to the Company or any Related Company that;

connection with the offer and sale of the Company’s securities in a capital raising transaction, and do not directly or

indirectly promote or maintain a market for the Company’s securities.

The Plan shall be administered by the Board or its

Compensation Committee and may grant Options designated as Incentive Stock Options or Nonqualified Stock Options.

The Plan provides

that up to a maximum of 66,667 shares of the Company’s common stock (subject to adjustment) are available for issuance under

Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the

maximum term of an Incentive Stock Option shall not exceed ten years, and in the case of an Incentive Stock Option granted to

a Ten Percent Stockholder, shall not exceed five years.

Any portion of an Option that is not vested and exercisable on the date

of a Participant’s Termination of Service shall expire on such date.

In the event of a Change in Control;

all outstanding

Awards, other than Performance Shares and Performance Units, shall become fully and immediately exercisable, and all applicable

deferral and restriction limitations or forfeiture provisions shall lapse, immediately prior to the Change in Control and shall

terminate at the effective time of the Change in Control;

provided, however, that with respect to a Change in Control that is

a Company Transaction, such Awards shall become fully and immediately exercisable, and all applicable deferral and restriction

limitations or forfeiture provisions shall lapse, only if and to the extent such Awards are not converted, assumed or replaced

by the Successor Company.

Equity Incentive Plan

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

“Plan”).

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

management, key employees, directors and consultants.

The 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 Plan.

On December 31, 2020, the Company’s Board

of Directors approved and adopted an amendment that increases the maximum from 2,250,000 to 4,000,000 shares of the Company’s

common stock.

Following the adoption of the Plan, the Board approved issuances of certain stock options to its executives, directors

and employees under the Plan.

Agreements with Current Management

than as described above, there are no additional agreements with current management, for the two years ended December 31, 2019

and 2018, respectively.

March 11, 2021, the Company’s Board of Directors approved and adopted the terms and provisions of employment agreements

for David Phipps, the Company’s Chief Executive Officer, and Thomas Seifert, the Company’s Chief Financial Officer.

initial term of Mr.

Phipps’

employment is one year commencing on March 11, 2021 which term will be automatically extended

for additional one-year terms thereafter unless terminated by the Company or the executive by written notice.

CEO’s annual

base compensation is an aggregate of $180,000 payable by the Company and £50,000 (or approximately $70,000) payable through

the Company’s wholly owned subsidiary, Global Telesat Communications Ltd., subject to periodic review and modification by

the Board upon occurrence of material events relating to the Company’s financial and business performance, including, without

limitation, the Company’s listing of its capital stock on a national securities exchange.

In addition, Mr.

Phipps will be

entitled to receive an annual cash bonus in an amount equal to up to 150% of his base salary if the Company meets or exceeds performance

criteria to be adopted by the Compensation Committee of the Board, once established, and any other additional bonuses as may be

determined by the Board.

Phipps is entitled to receive various other benefits if and to the extent available to the employees

of the Company.

The employment agreement may be terminated based on death or disability of the executive, for cause or without

good reason, for cause or with good reason, and as a result of the change of control of the Company.

The employment agreement

also contains certain provisions that are customary for agreements of this nature, including, without limitation, non-competition

and non-solicitation covenants, indemnification provisions, etc.

initial term of Mr.

Seifert’s employment is one year commencing on March 11, 2021 which term will be automatically extended

for additional one-year terms thereafter unless terminated by the Company or the executive by written notice.

CFO’s annual

base compensation is $150,000 payable by the Company, subject to periodic review and modification by the Board’s Compensation

Committee, once established.

Seifert will be entitled to receive an annual cash bonus in an amount equal to up to 150% of

his base salary if the Company meets or exceeds performance criteria to be adopted by the Compensation Committee of the Board,

once established, and any other additional bonuses as may be determined by the Board.

Seifert is entitled to receive various

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

The employment agreement may be terminated based

on death or disability of the executive, for cause or without good reason, for cause or with good reason, and as a result of the

change of control of the Company.

The employment agreement also contains certain provisions that are customary for agreements

of this nature, including, without limitation, non-competition and non-solicitation covenants, indemnification provisions, etc.

of Plan Based Awards and Outstanding Equity Awards at Fiscal Year-End

shares, of our common stock are reserved for issuance under the 2020 Incentive Plan as awards to employees, directors, consultants,

advisors and other service providers, of which 20,000 have been granted, allowing for an available balance of 46,447 as of December

advisors and other service providers, of which 3,492,000 have been granted, allowing for an available balance of 508,000 as of

December 31, 2020.

shares, of our common stock are reserved for issuance under the 2018 Incentive Plan as awards to employees, directors, consultants,

advisors and other service providers, of which 60,000 have been granted, allowing for an available balance of 6,667 as

of December 31, 2020.

Committee Interlocks and Insider Participation

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OWNERS AND MANAGEMENT

following tables sets forth, as of March 30, 2020, the number of and percent of the Company’s common stock beneficially

following tables sets forth, as of March 9, 2021, the number of and percent of the Company’s common stock beneficially owned

(1) all directors, naming them;

(2) our named executive officers;

(3) our directors and executive officers as a group,

without naming them;

(3) our directors and executive officers as a group, without

and (4) persons or groups known by us to own beneficially 5% or more of our voting securities.

person is deemed to be the beneficial owner of securities that can be acquired by him within 60 days from March 30, 2020 upon

the exercise of options, warrants or other convertible securities.

person is deemed to be the beneficial owner of securities that can be acquired by him within 60 days from March 9, 2021 upon the

exercise of options, warrants or other convertible securities.

Each beneficial owner’s percentage ownership is determined

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are exercisable within 60 days of March 9, 2021 have been exercised and converted.

and Nature of Beneficial Ownership

Common Stock (1)

Name and Address of Beneficial Owner (2)

Number of Shares

Directors and Executive Officers

Hector Delgado

Theresa Carlise

Directors and Executive Officers as a Group (3 persons)

and Address of Beneficial Owner (2)

and Executive Officers

1,868,285 (3)

and Executive Officers as a Group (3 persons)

2,210,841 (6)

Stockholders (2) :

In determining the percent of common stock beneficially owned by a person or entity, (a) the numerator is the number of shares

beneficially owned by such person or entity, including shares which may be acquired by that person within 60 days of March 30,

2020, upon exercise of warrants or options, and (b) the denominator is the sum of (i) the total shares of common stock outstanding

on March 30, 2020 (234,476 shares), and (ii) the total number of shares that the beneficial owner may acquire within 60 days of

March 30, 2020 upon exercise of options and warrants.

Chestnut Realty LLC

Don Setina Family LP

Consulting LLC

Stockholders as a Group (5 persons)

2,264,077 (7)

A person is deemed to be the beneficial owner of securities that can be acquired by him within 60 days from March 4, 2021 upon

the exercise of options, warrants or other convertible securities.

Unless otherwise indicated in the footnotes, the address of the beneficial owners is c/o Orbsat Corp., 18851 N.E.

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Represents (i) 359,952 shares of common stock, and (ii) 1,508,333 shares of common stock issuable upon exercise of options.

Represents 5,644 shares of common stock issuable upon exercise of options.

Represents 13,556 shares of common stock issuable upon exercise of options.

Represents (i) 21,800 shares of common stock, and (ii) 55,644 shares of common stock issuable upon exercise of options.

Represents (i) 112 shares of common stock, and (ii) 265,000 shares of common stock issuable upon exercise of options.

Represents (i) 381,864 shares of common stock, and (ii) 28,977 shares of common stock issuable upon exercise of options.

Represents shares of common stock, and no shares of common stock issuable upon exercise of options.

Certain Relationships and Related Transactions, and Director Independence

9 unchanged sentences

$7,158 of inventory from Orbital Satcom.

and Procedures for Related Party Transactions

there are no standing committees of the Board, the Board at large is responsible for reviewing and approving in advance any related

party transaction.

This will cover, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act,

any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we

were or will be a participant to, where the amount involved exceeds $120,000 and a related person had or will have a direct or

indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities

in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related

and Board Nominee Independence

Company’s current directors include David Phipps and Hector Delgado.

The Board elects to apply the NASDAQ Stock Market corporate

governance requirements and standards in its determination of the independence status of each Board and Board committee member.

Hector Delgado is the only current director on the Board that meets such independence requirements.

The Board currently does not

have any standing committees.

The Board based its independence determinations primarily on a review of the responses of the directors

and executive officers to questions regarding employment and transaction history, affiliations and family and other relationships

and on discussions with the directors.

Principal Accounting Fees and Services

2 unchanged sentences

December 31, 2020 and 2019.

Audit Fees (1)

Audit-related Fees

All Other Fees (2)

Audit-related

Other Fees (2)

fees consisted primarily of fees for the audit of our annual financial statements and reviews of the financial statements

18 unchanged sentences

Statements Schedules.

Agreement and Plan of Merger dated March 28, 2014 (Incorporated by reference to Exhibit 2.1 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014)

Asset Purchase Agreement dated December 10, 2014 (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2014) (1)

Articles of Merger (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 28, 2015)

Share Exchange Agreement by and among Orbital Tracking Corp., Global Telesat Communications Ltd.

and the Shareholders of Global Telesat Communications Ltd.

dated February 19, 2015 (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2015) (2)

Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014)

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

Certificate of Amendment to Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014)

Certificate of Amendment to Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 8, 2016)

Bylaws (Incorporated by reference to Exhibit 3.4 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014)

Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (Incorporated by reference to Exhibit 3.5 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014)

Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (Incorporated by reference to Exhibit 3.6 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014)

Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2014)

Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2014)

Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2015)

Certificate of Designation of Preferences, Rights and Limitations of Series F Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 28, 2015)

Certificate of Designation of Preferences, Rights and Limitations of Series G Convertible Preferred Stock (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 18, 2016)

Certificate of Designation of Preferences, Rights and Limitations of Series H Convertible Preferred Stock (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on November 1, 2016)

Certificate of Designation of Preferences, Rights and Limitations of Series I Convertible Preferred Stock (Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on November 1, 2016)

Certificate of Correction to Designation of Preferences, Rights and Limitations of Series H Convertible Preferred Stock (Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2017)

Certificate of Designation of Preferences, Rights and Limitations of Series J Convertible Preferred Stock (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 1, 2017)

Certificate of Designation of Preferences, Rights and Limitations of Series K Convertible Preferred Stock (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 1, 2017)

Certificate of Amendment to Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (Incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2017)

Certificate of Amendment to Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock (Incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2017)

Certificate of Amendment to Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock (Incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2017)

Certificate of Amendment to Designation of Preferences, Rights and Limitations of Series H Convertible Preferred Stock (Incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2017)

Certificate of Amendment to Designation of Preferences, Rights and Limitations of Series I Convertible Preferred Stock (Incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2017)

Certificate of Amendment to Designation of Preferences, Rights and Limitations of Series J Convertible Preferred Stock (Incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2017)

Certificate of Amendment to Designation of Preferences, Rights and Limitations of Series K Convertible Preferred Stock (Incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2017)

Certificate of Designation of Preferences, Rights and Limitations of Series L Convertible Preferred Stock (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 15, 2018)

Form of Indemnification Agreement (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on September 30, 2014)

2014 Equity Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 21, 2014) +

Securities Purchase Agreement by and between the Company and Auracana LLC dated January 21, 2014 (Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 21, 2014)

Form of Subscription Agreement (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2014)

Form of Registration Rights Agreement (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2014)

Form of Exchange Agreement (Note) (Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2014)

Form of Exchange Agreement (Unconverted Interest) (Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2014)

License Agreement dated December 10, 2014 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2014)

Consulting Agreement dated December 16, 2014 (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2014)

Price & Delivery Quote for the acceleration of Remote Telemetry capability and Simplex Data Services dated June 30, 2003 and Globalstar Response to GTCL’s Letter of Acceptance dated August 07, 2003 (Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2014)

Agreement by and between Globalstar LLC and Globalnet Corporation dated May 04, 2005 (Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2014)

Assignment and Assumption Agreement by and between Globalstar LLC, Globalnet Corporation and Global Telesat Corp.

dated July 28, 2005 (Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2014)

Amendment to the Agreement by and between Globalstar LLC and Globalnet Corporation dated May 04, 2005, dated August 16, 2006 (Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2014)

GINC-C-11-0520 by and between Global Telesat Corp.

and Globalstar, Inc., dated February 10, 2011 (Incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2014)

Form of Strategic Consulting Agreement (Incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2014)

$122,536 Note issued February 19, 2015 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2015) (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2015)

Executive Employment Agreement by and between David Phipps and Orbital Satcom, dated February 19, 2015 (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2015) +

Form of Indemnification Agreement (Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2015)

Form of Subscription Agreement (Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2015)

Form of Registration Rights Agreement (Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2015)

Consulting Agreement by and between SpaceTao LLC and the Company, dated February 19, 2015 (Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2015)

Purchase and Transfer Agreement by and between Concentric Engineering LLC and the Company, dated February 19, 2015 (Incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2015)

Mutual Release Agreement by and between MJI Resources Corp.

and the Company, dated February 19, 2015 (Incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2015)

Form of Strategic Consulting Agreement (Incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2014)

Employment Agreement by and between Theresa Carlise and the Company, dated June 9, 2015 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 15, 2015) +

Form of Subscription Agreement (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 30, 2015)

Form of Note Purchase Agreement (Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 30, 2015)

Form of Note (Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 30, 2015)

Placement Agent Agreement by and between the Company and Chardan Capital Markets LLC (Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 30, 2015)

Form of Lockup Agreement (Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 30, 2015)

Amendment No.

1 to Employment Agreement by and between the Company and Theresa Carlise dated December 28, 2015 (Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2015) +

Form of Option Agreement (Incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 30, 2015) +

Executive Employment Agreement by and between Orbital Tracking Corp.

and David Phipps (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 4, 2016) +

Form of Exchange Agreement (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 18, 2016)

Form of Series I Issuance Agreement (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on November 1, 2016)

Form of Option Agreement (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2017) +

Form of Subscription Agreement (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on January 13, 2017)

Form of Subscription Agreement (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 1, 2017)

Form of Issuance Agreement for 66,977 shares of Series K Preferred Stock (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 1, 2017)

Form of Issuance Agreement for 9,786 shares of Series K Preferred Stock (Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 1, 2017)

Form of Stock Option Agreement (Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 1, 2017) +

Form of Subscription Agreement - Series J Preferred Stock (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 10, 2018)

Form of Subscription Agreement - Series L Preferred Stock (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 10, 2018)

Form of Warrant ((Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 10, 2018)

2018 Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 14, 2018) +

Executive Employment Agreement by and between Orbital Tracking Corp.

and David Phipps (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 14, 2018) +

Executive Employment Agreement by and between Orbital Tracking Corp.

and Theresa Carlise (Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 14, 2018) +

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

Convertible Promissory Note by and between Orbital Tracking Corp.

and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K filed with

the Securities and Exchange Commission on March 31, 2014)

of Amendment to Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.3 to the Annual Report

on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014)

of Amendment to Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Current Report

on Form 8-K filed with the Securities and Exchange Commission on March 8, 2016)

(Incorporated by reference to Exhibit 3.4 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission

on March 31, 2014)

of Securities*

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

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

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

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

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

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

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

by and among Global Telesat Communications LTD and HSBC UK BANK PLC, dated July 16, 2020 (Incorporated by reference from the

Company’s Current Report on Form 8-K filed on July 21, 2020).

Business Interruption Loan Agreement by and among Global Telesat Communications LTD and HSBC UK BANK PLC, dated July 16, 2020

(Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 21, 2020).

Purchase Agreement by and among the Company and the lenders set forth on the lender schedule to the Note Purchase Agreement

dated August 21, 2020 (incorporated by reference from the Current Report on Form 8-K filed with the SEC on August 27, 2020).

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

Promissory Note by and between Orbital Tracking Corp.

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

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

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

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

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

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

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

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

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

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

Form of Consulting Agreement with the Company, dated May 13, 2019.

(Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 15, 2019).

Form of Waiver, dated March 13, 2020, (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 13, 2020.

List of Subsidiaries*

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

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

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

(Incorporated by reference

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

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

(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange

Commission on May 6, 2019).

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

preferred stock.

(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and

Exchange Commission on May 6, 2019).

Purchase Agreement by and among the Company and the lenders set forth on the lender schedule to the Note Purchase Agreement

dated May 13, 2019.

(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities

and Exchange Commission on May 15, 2019).

to Note Purchase Agreement by and among the Company and the lenders set forth on the lender schedule to the Note Purchase

Agreement dated May 13, 2019.

(Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the

Securities and Exchange Commission on May 15, 2019).

of Subsidiaries*

Certification

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

Certification

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

Certification

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

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

11 unchanged sentences

Executive Officer)

Theresa Carlise

Thomas Seifert

Chief Financial Officer, Secretary and Treasurer (Principal Financial and Accounting Officer)

2 unchanged sentences

Executive Officer and Chairman (Principal Executive Officer)

Theresa Carlise

Thomas Seifert

Financial Officer, Secretary and Treasurer (Principal Financial and Accounting Officer)

2 unchanged sentences

ORBITAL TRACKING CORP.

Report of Independent Registered Public Accounting Firm

of Independent Registered Public Accounting Firm

Financial Statements

Consolidated Balance Sheets as of December 31, 2019 and 2018

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2019 and 2018

Consolidated Statements of Stockholders’

Balance Sheets as of December 31, 2020 and 2019

Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2020 and 2019

Statements of Stockholders’

Equity for the two years ended December 31, 2020

Consolidated Statements of Cash Flows for the Years Ended December 31, 2019 and 2018

Statements of Cash Flows for the Years Ended December 31, 2020 and 2019

to Consolidated Financial Statements

2 unchanged sentences

Corp and Subsidiaries

Orbital Tracking Corp

on the Financial Statements

have audited the accompanying consolidated balance sheets of Orbsat Corp and Subsidiaries (the Company) as of December 31, 2019,

and 2018, and the related consolidated statements of operations and comprehensive loss, consolidated stockholders’

and consolidated statement of cash flows for each of the years in the two-year period ended December 31, 2019, and the related

notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all

material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and

its cash flows for each of the years in the two-year period ended December 31, 2019, in conformity with accounting principles

generally accepted in the United States of America.

Company’s Ability to Continue as a Going Concern

accompanying financial statements have been prepared assuming the Company will continue as a going concern.

As discussed in Note

2 to the accompanying financial statements, the Company has suffered recurring losses from operations, generated negative cash

flows from operating activities, has an accumulated deficit that raise substantial doubt exists about Company’s ability

to continue as a going concern.

Management’s evaluation of the events and conditions and management’s plans in regarding

these matters are also described in Note 2.

The financial statements do not include any adjustments that might result from the

outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the

have audited the accompanying consolidated balance sheets of Orbsat Corp & Subsidiaries (the Company) as of December 31, 2020

and 2019, and the related consolidated statements of operations and comprehensive loss, stockholders’

equity, and cash flows

for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the consolidated

financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

positions of the Company as of December 31, 2020 and 2019, and the consolidated results of its operations and its cash flows for

each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the

United States of America.

Concern Matter

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations and

had an accumulated deficit that raises substantial doubt about its ability to continue as a going concern.

Management’s

plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

in Accounting Principle

discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for leases as of January

1, 2019 due to the adoption of Accounting Standards Update No.

2016-02, Leases.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an

opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered

with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to

the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and

Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

12 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Audit Matters:

audit matters are matters arising from the current period audit of the financial statements that were communicated or required

to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements,

and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does

not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical

audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they

did not identify any critical audit matters during the course of our audit for the year ended December 31, 2020.

have served as the Company’s auditor since 2014.

2 unchanged sentences

BALANCE SHEETS

receivable, net

current assets

Accounts receivable, net

Unbilled revenue

Prepaid expenses

Other current assets

Total Current Assets

Property and equipment, net

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’

Current Liabilities

Accounts payable and accrued expenses

Contract liabilities

Due to related party

Line of Credit

Current Assets

and equipment, net

AND STOCKHOLDERS’

payable and accrued expenses

payable –

current portion

payable Coronavirus loans–

current portion

to related party

lease liabilities - current

Provision for income taxes

Liabilities of discontinued operations

Total Current Liabilities

Long Term Liabilities:

Convertible debt, net of discount, unamortized $635,333

for income taxes

of discontinued operations

Current Liabilities

Term Liabilities:

debt, net of discount, unamortized $1,084,944 and $635,333

payable Coronavirus –

lease liabilities –

Total Liabilities

Stockholders’

Preferred stock, $0.0001 par value;

stock, $0.0001 par value;

3,333,333 shares authorized

Series A ($0.0001 par value;

0 and 1,333 shares authorized, and no shares issued and outstanding as of December 31, 2019, and 2018)

Series B ($0.0001 par value;

0 and 2,000 shares authorized, 0 and 222 shares issued and outstanding, as of December 31, 2019, and 2018, respectively)

Series C ($0.0001 par value;

0 and 266,667 shares authorized, 0 and 127,578 shares issued and outstanding, as of December 31, 2019, and 2018, respectively)

stock, $0.0001 par value;

50,000,000 shares authorized, 4,080,017 shares issued and outstanding as of December 31, 2020, and

121,216 issued and outstanding at December 31, 2019, respectively

paid-in capital

other comprehensive loss

Stockholders’

Equity - continued

Series D ($0.0001 par value;

0 and 333,333 shares authorized, 0 and 192,807 shares issued and outstanding, as of December 31, 2019, and 2018, respectively)

Series E ($0.0001 par value;

0 and 583,067 shares authorized, 0 and 344,947 shares issued and outstanding as of December 31, 2019, and 2018, respectively)

Series F ($0.0001 par value;

0 and 73,333 shares authorized, 0 and 23,333

issued and outstanding, as of December 31, 2019, and 2018, respectively)

Series G ($0.0001 par value;

0 and 672,667 shares authorized, 0 and 346,840 issued and outstanding as of December 31, 2019, and December 31, 2018, respectively)

Series H ($0.0001 par value;

0 and 13,333 shares authorized, 0 and 916 issued and outstanding, as of December 31, 2019, and December 31, 2018, respectively)

Series I ($0.0001 par value;

0 and 7,663 shares authorized, 0 and 3,274 issued and outstanding, as of December 31, 2019, and December 31, 2018, respectively)

Series J ($0.0001 par value;

0 and 8,333 shares authorized, 0 and 4,313 issued and outstanding as of December 31, 2019, and December 31, 2018, respectively)

Series K ($0.0001 par value;

0 and 83,333 shares authorized, 0 and 77,124 issued and outstanding, as of December 31, 2019, and December 31, 2018, respectively)

Series L ($0.0001 par value;

0 and 6,667 shares authorized, 0 and 2,000 issued and outstanding as of December 31, 2019, and December 31, 2018, respectively)

Common stock, ($0.0001 par value;

50,000,000 shares authorized, 121,216 shares issued and outstanding as of December 31, 2019, and 62,435 outstanding at December 31, 2018, respectively)

Additional paid-in capital

Accumulated deficit

(11,115,178 )

Accumulated other comprehensive loss

Total Stockholders’

Total Liabilities and Stockholders’

Liabilities and Stockholders’

accompanying notes to consolidated financial statements.

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STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Years Ended

Cost of sales

the Years Ended

general and administrative

wages and payroll taxes

and amortization

operating expenses

Selling, general and administrative

Salaries, wages and payroll taxes

Stock-based compensation

Professional fees

Depreciation and amortization

Total operating expenses

Loss from other expenses and income taxes

Other (income) expense:

Interest earned

Interest expense

Foreign currency exchange rate variance

Gain on debt extinguishment

Change in fair value of derivative instruments, net

Total other expense

Loss before provision for income taxes

Provision for income taxes

Comprehensive loss:

Foreign currency translation adjustments

Comprehensive loss

$ (1,375,736 )

$ (1,200,479 )

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

Weighted number of common shares outstanding –

from other expenses and income taxes

(income) expense:

currency exchange rate variance

on debt extinguishment

in fair value of derivative instruments, net

other expense

before provision for income taxes

for income taxes

Comprehensive

currency translation adjustments

Comprehensive

LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

number of common shares outstanding –

basic & diluted

Basic and diluted net (loss) per share

and diluted net (loss) per share

accompanying notes to consolidated financial statements.

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THE TWO YEARS ENDED DECEMBER 31, 2020

Preferred Stock -

$0.0001 Par Value

Balance January 1, 2018

Sale of Preferred stock Series J

Sale of Preferred stock Series L

Stock based compensation for options granted

Imputed interest expense related to related party note payable issued for recapitalization

Comprehensive income (loss)

Balance, December 31, 2018

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

Preferred shares converted to common

Exercise of options to common

Comprehensive loss

Balance, December 31, 2019

Stock –

January 1, 2019

conversion feature of convertible debt

shares converted to note payable

shares converted to common

options to common

Comprehensive

December 31, 2019

common stock from convertible debt

conversion feature of convertible debt

common stock for options exercised

of options granted

based compensation

Comprehensive

December 31, 2020

accompanying notes to consolidated financial statements.

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THE TWO YEARS ENDED DECEMBER 31, 2020

Preferred Stock -

$0.0001 Par Value

Balance, January 1, 2018

Sale of Preferred stock Series J

Sale of Preferred stock Series L

Stock based compensation for options granted

Imputed interest expense related to related party note payable issued for recapitalization

Comprehensive income (loss)

Balance, December 31, 2018

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

Preferred shares converted to common

Exercise of options to common

Comprehensive loss

Balance, December 31, 2019

January 1, 2019

conversion feature of convertible debt

shares converted to note payable

shares converted to common

options to common

Comprehensive

December 31, 2019

common stock from convertible debt

conversion feature of convertible debt

common stock for options exercised

of options granted

based compensation

Comprehensive

December 31, 2020

accompanying notes to consolidated financial statements.

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THE TWO YEARS ENDED DECEMBER 31, 2019

Preferred Stock -

$0.0001 Par Value

Balance January 1, 2018

Sale of Preferred stock Series J

Sale of Preferred stock Series L

Stock based compensation for options granted

Imputed interest expense related to related party note payable issued for recapitalization

Comprehensive income (loss)

Balance, December 31, 2018

Beneficial conversion feature of convertible debt

Preferred shares converted to note payable

Preferred shares converted to common

Exercise of options to common

Comprehensive loss

Balance, December 31, 2019

January 1, 2019

conversion feature of convertible debt

shares converted to note payable

shares converted to common

options to common

Comprehensive

December 31, 2019

common stock from convertible debt

conversion feature of convertible debt

common stock for options exercised

of options granted

Comprehensive

December 31, 2020

accompanying notes to consolidated financial statements.

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THE TWO YEARS ENDED DECEMBER 31, 2020

Preferred Stock -

$0.0001 Par Value

Balance January 1, 2018

Sale of Preferred stock Series J

Sale of Preferred stock Series L

Stock-based compensation in connection with options granted

Stock based compensation for options granted

Imputed interest expense related to related party note payable issued for recapitalization

Comprehensive income (loss)

Balance, December 31, 2018

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, December 31, 2019

January 1, 2019

conversion feature of convertible debt

shares converted to note payable

shares converted to common

Comprehensive

December 31, 2019

common stock from convertible debt

conversion feature of convertible debt

common stock for options exercised

of options granted

based compensation

Comprehensive

December 31, 2020

accompanying notes to consolidated financial statements.

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THE TWO YEARS ENDED DECEMBER 31, 2020

$0.0001 Par Value

Balance, January 1, 2018

January 1, 2019

$ (9,735,422 )

Sale of Preferred stock Series J

Sale of Preferred stock Series L

Stock-based compensation in connection with options granted

Stock based compensation for options granted

Imputed interest expense related to related party note payable issued for recapitalization

Comprehensive income (loss)

Balance, December 31, 2018

conversion feature of convertible debt

issued for post-split adjustments

shares converted to note payable

shares converted to common

options to common

Comprehensive

December 31, 2019

$ (11,115,178 )

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, December 31, 2019

common stock from convertible debt

conversion feature of convertible debt

common stock for options exercised

of options granted

based compensation

Comprehensive

December 31, 2020

$ (13,878,553 )

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Stockholders’

Income (Loss)

Balance January 1, 2018

Sale of Preferred stock Series J

Sale of Preferred stock Series L

Stock based compensation for options granted

Imputed interest expense related to related party note payable issued for recapitalization

Comprehensive income (loss)

Balance, December 31, 2018

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, December 31, 2019

January 1, 2019

conversion feature of convertible debt

shares converted to note payable

shares converted to common

of options to common

Comprehensive

December 31, 2019

common stock from convertible debt

conversion feature of convertible debt

common stock for options exercised

value of options granted

based compensation

Comprehensive

December 31, 2020

accompanying notes to consolidated financial statements

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STATEMENT OF CASH FLOWS

For the Years Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

$ (1,379,756 )

$ (1,194,706 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation expense

Amortization of intangible asset

Amortization of right of use

Impairment of other asset

Amortization of convertible debt, net

Stock based compensation

Change in fair value of derivative liabilities

Gain on debt extinguishment

Imputed interest

Convertible debt issued for services

Changes in operating assets and liabilities:

Accounts receivable

Unbilled revenue

Prepaid expense

Other current assets

the Years Ended

FLOWS FROM OPERATING ACTIVITIES:

to reconcile net loss to net cash (used in) operating activities:

of intangible asset

of right of use asset

of other asset

of convertible debt, net

based compensation

in fair value of derivative liabilities

on debt extinguishment

value of options granted

debt issued for services

in operating assets and liabilities:

current assets

lease liabilities

Accounts payable and accrued liabilities

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

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from (repayments to) related party, net

Proceeds from issuance of preferred stock

Proceeds from (repayments to) note payable

Proceeds of convertible debt

Repayments from convertible notes payable

Proceeds from (repayments to) line of credit

Net cash provided by financing activities

Effect of exchange rate on cash

Net increase in cash

Cash beginning of year

Cash end of year

SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid during the period for

NON-CASH ADJUSTMENTS DURING THE YEAR

Beneficial conversion feature on convertible debt

Long term debt issued in exchange for preferred stock

Obtaining right of use asset for lease liability

payable and accrued liabilities

for income taxes

cash used in operating activities

FLOWS FROM INVESTING ACTIVITIES:

of property and equipment

cash used in investing activities

FLOWS FROM FINANCING ACTIVITIES:

from (repayments to) related party, net

from (repayments to) note payable Coronavirus loans

of convertible debt

to convertible notes payable

to ) proceeds from

line of credit

cash provided by financing activities

of exchange rate on cash

increase in cash

beginning of year

CASH FLOW INFORMATION

paid during the period for

FINANCING AND INVESTING ACTIVITIES DURING THE YEAR

conversion feature on convertible debt

common stock from convertible debt

term debt issued in exchange for preferred stock

right of use asset for lease liability

accompanying notes to consolidated financial statements

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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to which GTCL became a wholly-owned subsidiary of the Company.

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

accounting purposes, this transaction was accounted for as a reverse acquisition and has been treated as a recapitalization of

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See Note 13 - Stockholders

On August 19, 2019,

we effected a reverse split in 1-for-15 ratio as applied to our common stock and preferred stock, as well as the number of authorized

shares for both classes.

August 19, 2019, we effected a reverse split in 1-for-15 ratio as applied to our common stock and preferred stock, as well as

the number of authorized shares for both classes.

As of December 31, 2020, we had 4,080,017 shares issued and outstanding post-split.

All share and per share,

information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the

most recently completed reverse split.

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

restated to reflect the most recently completed reverse split.

See Note 13 - Stockholders Equity.

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have been eliminated in consolidation.

preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the

reported amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses

for the years then ended.

preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported

amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years

Actual results may differ significantly from those estimates.

Significant estimates made by

management include, but are not limited to, the assumptions used to calculate stock-based compensation, derivative

liabilities and common stock issued for services.

ORBSAT CORP AND SUBSIDIARIES

Significant estimates made by management include, but

are not limited to, the assumptions used to calculate stock-based compensation, derivative liabilities and common stock issued

for services.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

and Cash Equivalents

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rate at 1.286618 US$:

GBP, for the year ended 2018 closing rate at 1.274700 US$:

GBP, average rate at 1.296229 US$:

ORBSAT CORP AND SUBSIDIARIES

GBP, for the year ended December 31, 2019 closing rate at 1.3262 US$:

GBP, yearly average rate at 1.276933

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

Recognition and Unearned Revenue

57 unchanged sentences

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

At December 31, 2019, we

had contract liabilities of approximately $41,207.

At December 31, 2020, we had contract

liabilities of approximately $36,704.

At December 31, 2019, we had contract liabilities of approximately $41,207.

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

of Product Sales and Services

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furniture and fixtures

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

expense for the years ended December 31, 2019 and 2018 were $250,328 and $ 263,864, respectively.

TO CONSOLIDATED FINANCIAL STATEMENTS

expense for the years ended December 31, 2020 and 2019 was $269,926 and $250,328, respectively.

of long-lived assets

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derivative liability

at January 1, 2019

January 1, 2019

in fair value included in earnings

at March 31, 2019

March 31, 2019

in fair value included in earnings

4 unchanged sentences

recorded was reversed.

Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance

sheets at fair value in accordance with the accounting guidance.

The carrying amounts reported in the balance sheet for cash,

accounts payable, and accrued expenses approximate their estimated fair market value based on the short-term maturity of the instruments.

Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheets

at fair value in accordance with the accounting guidance.

The carrying amounts reported in the balance sheet for cash, accounts

payable, and accrued expenses approximate their estimated fair market value based on the short-term maturity of the instruments.

Based Compensation

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an award based on the grant-date fair value of the award.

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

to ASC Topic 718, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement

45 unchanged sentences

January 1, 2019, the Company accounts for its leases under ASC 842, Leases .

Under this guidance, arrangements meeting

the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet

as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate

implicit in the lease or the Company’s incremental borrowing rate.

Lease liabilities are increased by interest and reduced

by payments each period, and the right of use asset is amortized over the lease term.

For operating leases, interest on the lease

liability and the amortization of the right of use asset result in straight-line rent expense over the lease term.

leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense over the

Variable lease expenses are recorded when incurred.

ORBSAT CORP AND SUBSIDIARIES

Under this guidance, arrangements meeting the

definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both

a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit

in the lease or the Company’s incremental borrowing rate.

Lease liabilities are increased by interest and reduced by payments

each period, and the right of use asset is amortized over the lease term.

For operating leases, interest on the lease liability

and the amortization of the right of use asset result in straight-line rent expense over the lease term.

For finance leases, interest

on the lease liability and the amortization of the right of use asset results in front-loaded expense over the lease term.

lease expenses are recorded when incurred.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

calculating the right of use asset and lease liability, the Company has elected to combine lease and non-lease components.

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and recognizes rent expense on a straight-line basis over the lease term.

Company continues to account for leases in the prior period financial statements under ASC Topic 840.

and Development

8 unchanged sentences

On February 19, 2015, the

Company issued 444 of its common stock, par value $0.0001, at $112.61 per share, or $50,000, to a consultant as compensation for

the design and delivery of dual mode gsm/Globalstar Simplex tracking devices and related hardware and intellectual property.

the year ended December 31, 2019, the Company recorded an impairment charge of $50,000 for the above-mentioned other asset, due

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

Company issued 444 shares of its common stock, par value $0.0001, at $112.61 per share, or $50,000, to a consultant as

compensation for the design and delivery of dual mode gsm/Globalstar Simplex tracking devices and related hardware and intellectual

For the year ended December 31, 2019, the Company recorded an impairment charge of $50,000 for the above-mentioned other

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

For the fiscal years ending December 31, 2020 and December

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not accounting for 4.99% beneficial ownership limitations.

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

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

6 unchanged sentences

December 31, 2019

$ (1,379,756 )

$ (1,194,706 )

Preferred shares redemption adjustment

Net loss available to common shareholders

$ (1,177,832 )

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

Weighted number of common shares outstanding –

shares redemption adjustment

loss available to common shareholders

LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

number of common shares outstanding –

basic & diluted

Loss applicable to common shareholders per share

applicable to common shareholders per share

Party Transactions

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Accounting Pronouncements

May 2016, the FASB issued ASU No.

2016-12, Revenue from Contracts with Customers (Topic 606):

Narrow-Scope Improvements and

Practical Expedient , which is to (1) clarify the objective of the collectability criterion for applying paragraph 606-10-25-7;

(2) permit an entity to exclude amounts collected from customers for all sales (and other similar) taxes from the transaction

(3) specify that the measurement date for noncash consideration is contract inception;

(4) provide a practical expedient

that permits an entity to reflect the aggregate effect of all modifications that occur before the beginning of the earliest period

presented when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating

the transaction price to the satisfied and unsatisfied performance obligations;

(5) clarify that a completed contract for purposes

of transition is a contract for which all (or substantially all) of the revenue was recognized under legacy GAAP before the date

of initial application, and (6) clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting

period is not required to disclose the effect of the accounting change for the period of adoption.

The amendments of this ASU

are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years.

impact as a result of adopting this ASU on the financial statements and related disclosures.

ORBSAT CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pronouncements Recently Adopted

January 2016, the FASB issued ASU No.

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There was no impact as a result of adopting this ASU on the financial statements and related disclosures.

May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718 ) :

Scope of Modification Accounting

(ASU 2016-09), which provides guidance about which changes to the terms or conditions of a share-based payment award require

an entity to apply modification accounting in Topic 718, such as the repricing of share options, which would revalue those options

and the accounting for the cancellation of an equity award whether a replacement award or other valuable consideration is issued

in conjunction with the cancellation.

If not, the cancellation is viewed as a replacement and not a modification, with a repurchase

This pronouncement is effective for annual reporting periods beginning after December 15, 2017.

The Company adopted

this standard on January 1, 2018 and did not have a material impact on the Company’s financial statements.

July 2017, the FASB issued ASU No.

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to each period presented and is effective for annual periods beginning after December 15, 2018, and interim periods within those

December 22, 2017 the SEC issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects

of the Tax Cuts and Jobs Act (the “TCJA”).

SAB 118 provides a measurement period that should not extend beyond one

year from the enactment date for companies to complete the accounting under ASC 740.

In accordance with SAB 118, a company must

reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete.

To the extent

that a company’s accounting for certain income tax effects of the TCJA is incomplete but for which they are able to determine

a reasonable estimate, it must record a provisional amount in the financial statements.

Provisional treatment is proper in light

of anticipated additional guidance from various taxing authorities, the SEC, the FASB, and even the Joint Committee on Taxation.

If a company cannot determine a provisional amount to be included in the financial statements, it should continue to apply ASC

740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA.

has applied this guidance to its consolidated financial statements.

August 2018, the FASB issued accounting standards update (“ASU”) No.

2018-15, Customer’s Accounting for Implementation

Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.

The ASU is intended to align the requirements

for capitalization of implementation costs incurred in a cloud computing arrangement that is a service contract with the existing

guidance for internal-use software.

We adopted this ASU on a prospective basis on February 2, 2020.

The adoption of this standard

did not have a material impact on our Consolidated Financial Statements or related disclosures.

November 2018, the FASB amended Topic 842, Leases, by issuing ASU No.

2016-02, which requires lessees to recognize leases

on-balance sheet and disclose key information about leasing arrangements.

2016-02, which requires lessees to recognize leases on-balance

sheet and disclose key information about leasing arrangements.

Topic 842 with ASU No.

2018-01, Land Easement

Practical Expedient for Transition to Topic 842;

2018-01, Land Easement Practical Expedient

for Transition to Topic 842;

2018-10, Codification Improvements to Topic 842, Leases;

2018-11, Targeted Improvements.

The new standard establishes a right-of-use model (ROU) that requires a lessee to

recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.

be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in

the income statement.

The new standard was effective for us on January 1, 2019, however the Company did not have any leases

that met the criteria as established above, until July 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:

The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability

on the balance sheet for all leases with a term longer than 12 months.

Leases will be classified as finance or operating, with

classification affecting the pattern and classification of expense recognition in the income statement.

The new standard was effective

for us on January 1, 2019, however the Company did not have any leases that met the criteria as established above, until July

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 liability of 1.3262 or $33,866.

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.

The entity 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.

December 31, 2019, the Company had current and long-term operating lease liabilities of $29,237 and $51,620, respectively, and

right of use assets of $83,679.

ORBSAT CORP AND SUBSIDIARIES

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.

The entity 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

August 2017, the FASB issued ASU No.

2017-12, Derivatives and Hedging:

Targeted Improvements to Accounting for Hedging Activities .

The amendments are intended to better align an entity’s risk management activities and financial reporting for hedging relationships

through changes to the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge

In addition, this guidance amends and expands disclosure requirements.

We adopted this ASU on a prospective basis on

February 3, 2019.

The adoption of this standard did not have a material impact on our Consolidated Financial Statements.

Pronouncements Not Yet Adopted

as noted below, the Company has considered all recent accounting pronouncements and has concluded that there are no recent accounting

pronouncements that may have a material impact on its Consolidated Financial Statements, based on current information.

December 2019, the FASB issued ASU No.

2019-12, Simplifying the Accounting for Income Taxes .

The ASU is intended to enhance

and simplify aspects of the income tax accounting guidance in ASC 740 as part of the FASB’s simplification initiative.

This guidance

is effective for fiscal years and interim periods within those years beginning after December 15, 2020 with early adoption permitted.

The Company will adopt this ASU on January 31, 2021 and does not expect there to be a material impact on our Consolidated Financial

March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform

on Financial Reporting .

This guidance provides temporary optional expedients and exceptions to the U.S.

GAAP guidance on contract

modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank

Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight

Financing Rate.

This ASU is applied prospectively and becomes effective immediately upon the transition from LIBOR.

The Company’s

secured credit facility agreement references LIBOR, which is expected to be discontinued as a result of reference rate reform.

The Company expects to adopt the guidance upon transition from LIBOR, but does not believe the adoption will have a material effect

on its consolidated financial statements.

December 31, 2020 and 2019, the Company had aggregated current and long-term operating lease liabilities of $52,699

and $80,857, respectively, and right of use assets of $55,606 and $83,679, respectively.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

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

4 unchanged sentences

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

31, 2019, 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.

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.

31, 2020, the Company had an accumulated deficit of $13,878,553, negative working capital of $144,058 and net loss

of $2,763,375 during the year ended December 31, 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.

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

13 unchanged sentences

expense was $269,926 and $250,328 for the year ended December 31, 2020 and 2019, respectively.

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

INTANGIBLE ASSETS

14 unchanged sentences

Future amortization of intangible assets is as follows:

and thereafter

February 19, 2015, the Company issued 444 of its common stock, par value $0.0001, at $112.61 per share, or $50,000, to a consultant

11 unchanged sentences

other liabilities

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

LINE OF CREDIT

4 unchanged sentences

2020 and 2019, the Company recorded interest expense of $952 and $574, respectively.

The short-term line of credit balance as of

December 31, 2019 and 2018, was $24,483 and $0.

The short-term line of credit balance as

of December 31, 2020 and 2019, was $0 and $24,483.

NOTE EXCHANGE AGREEMENT

13 unchanged sentences

The Company may prepay the Notes at any time.

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

For the years ended December 31, 2019 and 2018, the Company recorded interest in relation to the note of $4,907 and $0, respectively.

the years ended December 31, 2020 and 2019, the Company repaid $0 and $46,422 of the notes, leaving a balance of $121,848 as long-term

notes payable.

For the years ended December 31, 2020 and 2019, the Company recorded interest in relation to the note of $4,907

and $4,907, respectively.

CONVERTIBLE NOTES PAYABLE

7 unchanged sentences

Beginning 180 days from the issue date, the Note

is convertible into our common stock at a price equal to 61% of the Market Price, which is defined as the lowest trading

price for our common stock during the 15 trading days prior to the conversion notice.

Conversions under the Note are limited such

that the holder may not convert the Note to the extent that the number of shares of common stock issuable upon the conversion

would result in beneficial ownership by the holder and its affiliates of more than 4.99% of our outstanding shares of common stock.

is convertible into our common stock at a price equal to 61% of the Market Price, which is defined as the lowest trading price

for our common stock during the 15 trading days prior to the conversion notice.

Conversions under the Note are limited such that

the holder may not convert the Note to the extent that the number of shares of common stock issuable upon the conversion would

result in beneficial ownership by the holder and its affiliates of more than 4.99% of our outstanding shares of common stock.

In the event of any default, the Note will bear interest at a rate of 22% per year.

7 unchanged sentences

The interest and the prepayment penalty are reflected on the statement of operations as interest expense.

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

of December 31, 2020 and 2019, outstanding balance of the current portion of convertible notes payable was $0.

For the years ended

December 31, 2019 and 2018, we recorded interest expense in relation to this note payable of $87,778 and $0, which includes a

$20,257 pre-payment penalty.

December 31, 2020 and 2019, we recorded interest expense in relation to this note payable of $0 and $87,778, which includes

a $20,257 pre-payment penalty.

notes payable –

41 unchanged sentences

the occurrence of an Event of Default, a majority of the Holders may accelerate the maturity of the Indebtedness.

June 15, 2020, the Company and the holders of the majority convertible promissory notes sold by the Company in the May 2019 private

offering agreed to amend certain terms and provisions of the Note Purchase Agreement dated as of May 13, 2019 (the “NPA”)

and related convertible promissory notes (the “2019 Notes”) consistent with the terms of such instruments as follows:

amend Section 2 of the 2019 Notes to allow the Company to pre-pay or redeem such 2019 Notes, with mutual consent of the parties

to the 2019 Notes;

amend Section 3(a) of the 2019 Notes to change the “Conversion Price”

from $0.10 per share to $0.20 per share;

amend Section 4 the beneficial ownership limitation upon conversion of the 2019 Notes from 4.99% to 9.99%;

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

provision such that for a period beginning on the closing

date and ending two years thereafter, if the Company issues any common stock or securities convertible into or exercisable

for shares of common stock or modify any of the foregoing which may be outstanding to any person or entity at a price per

share or conversion or exercise price per share which shall be less than $0.20 per share, the “Lower Price Issuance”,

then the Company will issue such additional units such that the subscriber/lender, will hold that number of units in total

had subscriber/lender purchased the units with the purchase price equal to the lower price issuance common stock issued or

issuable by the Company, notwithstanding anything herein or in any other agreement to the contrary, the Company should only

be required to make a single adjustment with respect to any lower price issuance regardless of the existence of multiple bases;

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

6.2(b) of the NPA to waive a negative covenant to allow the Company to issue up to 100,000 shares of its common stock as compensation

for services to various service providers, consultants, etc.;

6.2(c) of the NPA to waive a negative covenant to allow the Company to put into place an employee stock option plan, or a

similar plan, to grant equity in the Company to its officers, directors and employees.

comparison to the fair market value of the common stock on May 14, 2019, and the fixed effective conversion rate of $0.10 per

1 unchanged sentence

Thus, the Company recorded a discount on the debt of $805,000 with a corresponding increase to additional paid in capital.

the year ended December 31, 2019, we amortized the discount on the debt, to interest expense of $169,668, resulting in a balance

the year ended December 31, 2019, we amortized $169,668 discount on the debt to interest expense, resulting in a balance

of unamortized discount notes payable of $635,333.

ORBSAT CORP AND SUBSIDIARIES

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.

The Company recorded an additional beneficial conversion

feature of the amended note of $17,041.

For the year ended December 31, 2020, the Company amortized the discount on the debt,

to interest expense of $538,087, resulting in a balance of unamortized discount notes payable of $329,683.

August 21, 2020, 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 “August Notes”).

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 August 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 August 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 August Notes other than as required

by the Agreement.

The August Note holders have an optional right of conversion such that a Noteholder may elect to convert his

August 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 August 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.

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 year ended December 31, 2020, the Company amortized the discount on the debt, to interest expense of $381,640, resulting

in a balance of unamortized discount notes payable of $517,278.

For the years ended December 31, 2020 and 2019, the Company

recorded simple interest expense of $14,361 and $0 respectively.

December 1, 2020, the Company entered into a Note Purchase Agreement (the “NPA3”) by and among the Company and certain

lenders set forth on the lender schedule to the NPA3 (the “Lenders”).

Pursuant to the terms of the NPA3, the Company

sold an aggregate principal amount of $244,000 of its convertible promissory notes (the “December Notes”).

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 December 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 December 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 December Notes other than as

required by the Agreement.

The December Note holders have an optional right of conversion such that a Noteholder may elect to

convert his December 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 $0.25, subject to certain

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.

of the December Notes are granted demand registration rights and pre-emptive rights.

In addition, the NPA3 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.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

comparison to the fair market value of the common stock on December 1, 2020, and the fixed effective conversion rate of $0.25

per common share, the lesser amount of the conversion feature or debt was $237,983 and presented a beneficial conversion

Thus, the Company recorded a discount on the debt of $237,983 with a corresponding increase to additional paid

in capital, resulting in a balance of unamortized discount notes payable of $237,983.

For the years ended December

31, 2020 and 2019, the Company recorded simple interest expense of $1,083 and $0 respectively.

the year ended December 31, 2020, the Holders converted a total of $687,734 of the convertible debt to 3,499,001

shares of common shares, 134,113 of which were at the conversion rate of $0.10 per share and 3,364,888 of which

were at the conversion rate of $0.20 per share.

The balance of the convertible notes at December 31, 2020, net of unamortized

discount of $1,084,944, is $209,323.

11 CORONAVIRUS LOANS

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

The loan is for

$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 December 31, 2020,

the Company has recorded $15,624 as current portion of notes payable and $5,208 as notes payable long term.

April 20, 2020, the Board of Directors 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$341,625

at an exchange rate of GBP:USD of 1.3665.

The Debenture bears interest beginning July 16, 2021, 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.

As of December 31, 2020, the Company has recorded $26,207 as current

portion of notes payable and $315,418 as notes payable long term.

DERIVATIVE LIABILITIES

current portion of the convertible notes were accounted for as liabilities at the date of issuance and adjusted to fair value

through earnings for the three months ended March 31, 2019.

On May 14, 2019, due to the cash repayment any derivative liability

was fair valued at repayment date and a gain was recorded for the reversal of derivative liability.

convertible notes were accounted for as liabilities at the date of issuance and adjusted to fair value through earnings.

14, 2019, due to the cash repayment any derivative liability was fair valued at repayment date and a gain was recorded for the

reversal of derivative liability.

derivative liability

at January 1, 2019

January 1, 2019

in fair value included in earnings

at March 31, 2019

March 31, 2019

in fair value included in earnings

5 unchanged sentences

dividend yield

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

13 - STOCKHOLDERS’

March 28, 2014, in connection with the Reincorporation (see Note 1), all share and per share values for all periods presented

in the accompanying consolidated financial statements are retroactively restated for the effect of the

Reincorporation.

in the accompanying consolidated financial statements are retroactively restated for the effect of the Reincorporation.

March 5, 2016, the Company shareholders voted in favor of an amendment to its Articles of Incorporation to increase the total

4 unchanged sentences

All share and per share information in

the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the reverse

the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the reverse split.

July 24, 2019, the Company filed a Certificate of Change (the “Certificate of Change”) with the Nevada Secretary of

10 unchanged sentences

The Reverse Split was approved by FINRA on August 19, 2019.

ORBSAT CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 December 31, 2019.

of December 31, 2019, there were 3,333,333 shares of Preferred Stock authorized.

of preferred stock, par value $0.0001 per share.

As of December 31, 2020, and 2019, there were 4,080,017 and 121,216 shares of

common stock and 0 shares of preferred stock issued and outstanding, respectively.

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

3 unchanged sentences

was increased from 4.99% to 9.99% of our outstanding shares of common stock.

May 10, 2018, we issued 20,000 shares of our Series J Preferred Stock at their stated value of $10.00 per share to one investor,

for total proceeds of $200,000.

Our Series J Preferred Stock is currently convertible to common stock at a price of $1.50 per

share and votes on an as-converted basis, subject to certain conversion limitations.

May 11, 2018, we designated a new series of Preferred Stock entitled “Series L Preferred Stock.”

Our Series L Preferred

Stock consists of 100,000 shares with a stated value of $10.00 per share.

Series L Preferred Stock is convertible to common stock

at a price of $4.00 per share and votes together with our common stock on an as-converted basis.

addition, on May 14, 2018, we issued a total of 30,000 Units to 3 investors at a price of $10.00 per Unit, for total proceeds

Each Unit consists of one (1) share of Series L Preferred Stock and warrants to purchase two (2) shares of common

stock at a price of $4.00, exercisable for three years.

May 20, 2019, following the approval on May 14, 2019 of the Board of Directors, the Company and a majority of the shareholders

13 unchanged sentences

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

ORBSAT CORP AND SUBSIDIARIES

of December 31, 2020 and 2019, 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 preferred shares issued and outstanding.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of December 31, 2019, 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.

of December 31, 2019, and 2018, there were 50,000,000 shares of Common Stock authorized;

121,216 and 62,435 shares issued and

outstanding, respectively.

On January 18, 2019, we

issued a total of 21,621 common shares via a cashless exercise of employee stock options.

David Phipps exercised 21,667 options

and two employees exercised 18,333 options, both through a cashless exercise.

The Company withheld newly acquired

shares pursuant to the exercise of the Option.

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].

TO CONSOLIDATED FINANCIAL STATEMENTS

the year ended December 31, 2020

Company issued a total of 3,958,801 shares of common stock during the year ended December 31, 2020, as described below:

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

at the conversion rate of $0.10 per share.

January 31, 2020, the Company issued an aggregate of 18,147 common stock upon the conversion of $1,815 of its convertible debt,

at the conversion rate of $0.10 per share.

February 10, 2020, the Company issued an aggregate of 25,421 common stock upon the conversion of $2,542 of its convertible debt,

at the conversion rate of $0.10 per share.

February 11, 2020, the Company issued an aggregate of 23,580 common stock upon the conversion of $2,358 of its convertible debt,

at the conversion rate of $0.10 per share.

February 18, 2020, the Company issued an aggregate of 13,192 common stock upon the conversion of $1,319 of its convertible debt,

at the conversion rate of $0.10 per share.

February 19, 2020, the Company issued an aggregate of 4,468 common stock upon the conversion of $446 of its convertible debt,

at the conversion rate of $0.10 per share.

March 9, 2020, the Company issued an aggregate of 10,305 common stock upon the conversion of $1,031 of its convertible debt, at

the conversion rate of $0.10 per share.

April 17, 2020, the Company issued an aggregate of 7,046 common stock upon the conversion of $705 of its convertible debt, at

the conversion rate of $0.10 per share.

April 22, 2020, the Company issued an aggregate of 370 common stock upon the conversion of $37 of its convertible debt, at the

conversion rate of $0.10 per share.

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.

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.

On July 22, 2020, the Company issued 20,000

common stock valued at $50,200 and on November 13, 2020, the Company issued 5,000 common stock valued at $11,250.

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

Additionally, on August 25, 2020, Hector Delgado

and two employees exercised 110,000 options through a cashless exercise.

The Company withheld newly acquired shares pursuant

to the exercise of the Option.

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 429,800 shares of common stock were issued.

August 25, 2020, the Company issued 5,000 common stock for consulting services valued at $12,550.

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 191,094 common stock upon the conversion of $38,219 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.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

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.

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 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.

the year ended December 31, 2019

Company issued a total of 58,781 shares of common stock during the year ended December 31, 2019, as described below:

January 18, 2019, we issued a total of 21,619 common shares via a cashless exercise of employee stock options.

exercised 40,000 options and two employees exercised 18,333 options, both through a cashless exercise.

The Company withheld

newly acquired shares pursuant to the exercise of the Option.

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].

April 9, 2019, we issued an aggregate of 7,798 shares of common stock upon the conversion of 4,052 shares of Series C Preferred

9 unchanged sentences

Incentive Plan

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

The 2014 Equity Incentive Plan

was closed and superseded by the 2018 Incentive Plan.

The purpose of the Plan is to provide a means for the Company to continue

to attract, motivate and retain management, key employees, consultants and other independent contractors, and to provide these

individuals with greater incentive for their service to the Company by linking their interests in the Company’s success

with those of the Company and its shareholders.

An Award may also be granted to any consultant, agent, advisor or independent

contractor for bona fide services rendered to the Company or any Related Company that;

are not in connection with the offer and

sale of the Company’s securities in a capital raising transaction, and do not directly or indirectly promote or maintain

a market for the Company’s securities.

The Plan shall be administered by the Board or its Compensation Committee and may

grant Options designated as Incentive Stock Options or Nonqualified Stock Options.

The Plan provides that up to a maximum of 66,667

shares of the Company’s common stock (subject to adjustment) are available for issuance under the Plan.

Subject to earlier

termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Incentive

Stock Option shall not exceed ten years, and in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, shall

not exceed five years.

Any portion of an Option that is not vested and exercisable on the date of a Participant’s Termination

of Service shall expire on such date.

In the event of a Change in Control;

all outstanding Awards, other than Performance Shares

and Performance Units, shall become fully and immediately exercisable, and all applicable deferral and restriction limitations

or forfeiture provisions shall lapse, immediately prior to the Change in Control and shall terminate at the effective time of

the Change in Control;

provided, however, that with respect to a Change in Control that is a Company Transaction, such Awards

shall become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions

shall lapse, only if and to the extent such Awards are not converted, assumed or replaced by the Successor Company.

ORBSAT CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

exercise price of an Incentive Stock Option shall be at least 100% of the Fair Market Value of the Common Stock on the Grant Date,

and in the case of an Incentive Stock Option granted to a Participant who owns more than 10% of the total combined voting power

of all classes of the stock of the Company or of its parent or subsidiary corporations (a “Ten Percent Stockholder”),

shall not be less than 110% of the Fair Market Value of the Common Stock on the Grant Date.

As of December 31, 2018, Mr.

Phipps, is a Ten Percent Stockholder.

The determination of more than 10% ownership shall be made in accordance with Section 422

To the extent the aggregate Fair Market Value (determined as of the Grant Date) of Common Stock with respect to which

a Participant’s Incentive Stock Options become exercisable for the first time during any calendar year (under the Plan and

all other stock option plans of the Company and its parent and subsidiary corporations) exceeds $100,000, such portion in excess

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

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

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) volatility of 607%, expected term of 3 years, and a risk-free interest rate of 2.64%.

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:

Phipps, President, CEO, and Director

Delgado, Director

addition, we cancelled options to purchase a total of (5,000) shares to two key employees.

December 18, 2018, we issued 55,417 new stock options to our executives and directors under the 2018 Incentive Plan.

issued have an exercise price of $2.25 per share, with the exception of David Phipps, a Ten Percent Stockholder, whose exercise

price is $2.55, are fully vested and expire on December 17, 2023.

The options were valued on the grant date at approximately $2.25

per option or a total of $124,674 using a Black-Scholes option pricing model with the following assumptions:

strike price of $2.25

stock price of $2.25 per share (based on the market price at close on December 17, 2018) volatility of 773%, expected term of

5 years, and a risk-free interest rate of 2.69%.

purpose of the 2018 Incentive Plan (the “Plan”) is to provide a means for the Company to continue to attract, motivate

and retain management, key employees, consultants and other independent contractors, and to provide these individuals with greater

incentive for their service to the Company by linking their interests in the Company’s success with those of the Company

and its shareholders.

January 18, 2019, David Phipps exercised 21,667 options via a cashless exercise.

6 unchanged sentences

shares of common stock were issued.

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Issued Outside of Plan

February 19, 2015, the Company issued to Mr.

Rector, the former Chief Executive Officer, Chief Financial Officer and director

of the Company, a seven-year option to purchase 956 shares of common stock as compensation for services provided to the Company.

The options have an exercise price of $112.50 per share, were fully vested on the date of grant and shall expire in February 2022.

The 956 options were valued on the grant date at approximately $112.50 per option or a total of $107,500 using a Black-Scholes

option pricing model with the following assumptions:

stock price of $112.50 per share (based on the sale of common stock in a

private placement), volatility of 380%, expected term of 7 years, and a risk-free interest rate of 1.58%.

In connection with the

stock option grant, the Company recorded stock-based compensation for the year ended December 31, 2015 of $107,500, respectively.

December 28, 2015, the Company issued Ms.

Carlise, Chief Financial Officer, a ten-year option to purchase 222 shares of common

stock as compensation for services provided to the Company.

The options have an exercise price of $112.50 per share, were fully

vested on the date of grant and shall expire in December 2025.

The 222 options were valued on the grant date at approximately

$2,925.29 per option or a total of $650,000 using a Black-Scholes option pricing model with the following assumptions:

of 2,925.29 per share (based on the closing price of the Company’s common stock of the date of issuance), volatility of

992%, expected term of 10 years, and a risk-free interest rate of 1.05%.

In connection with the stock option grant, the Company

recorded stock-based compensation for the year ended December 31, 2015 of $650,000, respectively.

on December 28, 2015, the Company issued Mr.

Delgado, its Director, a ten-year option to purchase 89 shares of common stock as

compensation for services provided to the Company.

The options have an exercise price of $112.50 per share, were fully vested

on the date of grant and shall expire in December 2025.

The 89 options were valued on the grant date at approximately $2,925.73

per option or a total of $260,000 using a Black-Scholes option pricing model with the following assumptions:

stock price of $2,925.73

per share (based on the closing price of the Company’s common stock of the date of issuance), volatility of 992%, expected

term of 10 years, and a risk-free interest rate of 1.05%.

In connection with the stock option grant, the Company recorded stock-based

compensation for the year ended December 31, 2015 of $260,000, respectively.

December 16, 2016, the Company issued options to Mr.

Phipps, to purchase up to 4,444 shares of common stock.

The options were

issued outside of the Company’s 2014 Equity Incentive Plan and are not governed by the 2014 Plan.

The options have an exercise

price of $22.50 per share, vest immediately, and have a term of ten years.

The 4,444 options were valued on the grant date at

approximately $42.75 per option or a total of $190,000 using a Black-Scholes option pricing model with the following assumptions:

stock price of $42.75 per share (based on the closing price of the Company’s common stock of the date of issuance), volatility

of 872%, expected term of 10 years, and a risk-free interest rate of 1.0500%.

In connection with the stock option grant, the Company

recorded stock-based compensation for the year ended December 31, 2016 of $190,000, respectively.

May 26, 2017, the Company issued 2,222 options to Mr.

Phipps, 1,667 options to Theresa Carlise, 556 options to Hector Delgado,

its Director and 8,889 options to certain employees of the Company.

The employees are the adult children of our Chief Executive

The options were issued outside of the Company’s 2014 Equity Incentive Plan and are not governed by the 2014 Plan.

The options have an exercise price of $22.50 per share, vest immediately, and have a term of ten years.

The 13,333 options were

valued on the grant date at approximately $45.00 per option or a total of $600,000 using a Black-Scholes option pricing model

with the following assumptions:

stock price of $45.00 per share (based on the closing price of the Company’s common stock

of the date of issuance), volatility of 736%, expected term of 10 years, and a risk-free interest rate of 1.30%.

In connection

with the stock option grant, for the years ended December 31, 2017, the Company recorded stock-based compensation of $600,000.

ORBSAT CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Equity 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.

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

under the 2020 Plan.

David Phipps, CEO was granted 400,000 options, Theresa Carlise, former CFO was granted 71,000 options, Hector

Delgado, Director was granted 21,000 options and seven key employees were granted 160,000 options.

These 652,000 options have

an exercise price of $0.20 per share, were fully vest upon issuance and expire on August 20, 2030.

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

Additionally, on August 25, 2020, Hector Delgado

and two employees exercised a total of 131,000 options through a cashless exercise.

The Company withheld newly acquired

shares pursuant to the exercise of the Option.

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].

result of the exercise 429,800 shares of common stock were issued.

December 31, 2020, the Company’s Board of Directors approved and adopted an amendment to the 2020 Incentive Plan which increased

the maximum from 2,250,000 to 4,000,000 shares of the Company’s common stock and approved issuances of certain stock options

to its executives, directors, employees and consultants under the Plan.

David Phipps, CEO was granted 1,500,000 options, Thomas

Seifert, CFO was granted 250,000 options, Hector Delgado, Director was granted 50,000 options, and six key employees and consultants

were granted a total of 850,000 options, These 2,650,000 options have an exercise price of $0.25 per share, were fully

vested upon issuance and expire on December 30, 2030.

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 462.15%, a risk-free rate of interest between 0.68-0.93%, and contractual lives of the options of ten

In connection with the stock option grant, for the year ended December 31, 2020, the Company recorded a charge for the

fair value of options granted of $830,900.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

the years ended December 31, 2020 and 2019, the Company recorded total stock-based compensation of $830,900 and $0, respectively.

options outstanding at December 31, 2019, as disclosed in the below table have approximately $115,180 of intrinsic value at the

end of the period.

options outstanding at December 31, 2020 and 2019, as disclosed in the below table, have approximately $7,800,116 and $115,180

of intrinsic value, respectively.

summary of the status of the Company’s outstanding stock options and changes during the years ended December 31, 2020 and

3 unchanged sentences

at January 1, 2019

outstanding at December 31, 2018

exercisable at December 31, 2018

average fair value of options granted during the period

at January 1, 2019

Balance outstanding

at December 31, 2019

Options exercisable

at December 31, 2019

Weighted average

fair value of options granted during the period

January 1, 2020

outstanding at December 31, 2020

exercisable at December 31, 2019

average fair value of options granted during the period

Options exercisable

at December 31, 2020

Weighted average

fair value of options granted during the period

summary of the status of the Company’s outstanding stock warrants and changes during the years ended December 31, 2020 and

4 unchanged sentences

at December 31, 2019

at January 1, 2019

January 1, 2020

outstanding at December 31, 2020

of December 31, 2020 and 2019, there were 4,000 stock warrants outstanding.

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

Company accounts for income taxes under ASC Topic 740:

4 unchanged sentences

requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.

has a net operating loss carry forward for tax purposes totaling approximately $3.7 million at December 31, 2019, expiring

through the year 2036, generally.

tax reform bill that Congress voted to approve Dec.

20, 2017, also known as the “Tax Cuts and Jobs Act”, made sweeping

modifications to the Internal Revenue Code, including a much lower corporate tax rate, changes to credits and deductions, and

a move to a territorial system for corporations that have overseas earnings.

has a net federal and state operating loss carry forward for tax purposes totaling approximately $6.8 million at

December 31, 2020, expiring through the year 2036, generally.

tax reform bill that Congress voted to approve December 20, 2017, also known as the “Tax Cuts and Jobs Act”,

made sweeping modifications to the Internal Revenue Code, including a much lower corporate tax rate, changes to credits and deductions,

and a move to a territorial system for corporations that have overseas earnings.

The act replaced the prior-law graduated corporate

tax rate, which taxed income over $10 million at 35%, with a flat rate of 21%.

The Company has not reviewed the all of the changes

the “Tax Cuts and Jobs Act”

that will apply to the Company but is reviewing such changes.

Due to the continuing loss

position of the Company, such changes should not be material.

Due to the continuing loss position of the

Company, such changes should not be material.

purposes, the Company has not completed its evaluation of NOL utilization limitations under Internal Revenue Code, as amended

2 unchanged sentences

would be limited as to the amount that could be utilized each year, or possibly eliminated, based on the Code.

has also, not completed its review of NOL’s pertaining to years the Company was known as “Silver Horn Mining Ltd.”

The Company has

also, not completed its review of NOL’s pertaining to years the Company was known as “Silver Horn Mining Ltd.”

and “Great West Resources, Inc.”, which may not be available due to IRC Section 382 and because of a change in business

4 unchanged sentences

NOL’s limitation.

table below summarizes the differences between the Company’s effective tax rate of 25% and the statutory federal

rate as follows for the years ended December 31, 2019 and 2018:

December 31, 2019

December 31, 2018

Tax expense (benefit) computed at “expected”

statutory rate

State income taxes, net of benefit

Permanent differences:

Stock based compensation and consulting

Loss (gain) from change in fair value of derivative liability

Valuation allowance

Net income tax expense/(benefit)

components of earnings before income taxes for the years ended December 31, 2020 and 2019 were as follows:

(loss) before income taxes:

$ (2,826,902 )

$ (1,436,516 )

$ (2,763,375 )

$ (1,379,756 )

tax provision (benefit) consists of the following for the years ended December 31, 2020 and 2019:

tax provision (benefit):

income tax provision (benefit)

Company’s wholly owned subsidiary, GTCL, is a United Kingdom (“UK”) Limited Company and files tax returns in

Its estimated tax liability for December 31, 2020 and 2019 is approximately $3,563 and $747, respectively.

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

reconciliation of the income tax provision (benefit) by applying the statutory United States federal income tax rate to income

(loss) before income taxes is as follows:

Ended December 31,

income tax provision (benefit) at statutory rate

tax expense net of federal tax benefit

Non-Deductible

taxes at rate different than US Taxes

in valuation allowance

tax provision (benefit)

tax assets and liabilities are provided for significant income and expense items recognized in different years for tax and financial

1 unchanged sentence

Temporary differences, which give rise to a net deferred tax asset is as follows:

December 31, 2019

December 31, 2018

operating loss carryforward

plant and equipment and intangibles asset

based compensation

deferred tax assets

Net operating loss carryforward

Total deferred tax assets

tax liabilities:

basis of property and equipment in excess of tax basis

deferred tax liabilities

Book basis of property and equipment in excess of tax basis

Total deferred tax liabilities

Net deferred tax asset before valuation allowance

deferred tax asset before valuation allowance

valuation allowance

Net deferred tax asset

deferred tax asset

net operating loss carryforward increased from $4,951,682 at December 31, 2019 to $6,789,695 at December 31, 2020.

2 unchanged sentences

15 - COMMITMENTS AND CONTINGENCIES

March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) a global pandemic

prompting government-imposed quarantines, suspension of in-person attendance of academic programs, and cessation of certain travel

and business closures.

The success of our business depends on our global operations, including our supply chain and consumer demand,

among other things.

As a result of COVID-19, we have experienced shortages in inventory due to manufacturing issues, a reduction

in the volume of sales in some parts of our business, such as rental sales and direct website sales, and a reduction in personnel

due to lockdown related issues.

Our results of operations for the year ended December 31, 2020 reflect this impact;

expect that this trend may continue and the full extent of the impact is unknown.

In recent months, some governmental agencies

in the US and Europe, where we produce the largest percentage of our sales, have lifted certain restrictions.

However, if customer

demand continues to be low, our future equipment sales, subscriber activations and sales margin will be impacted.

We have implemented

several measures to minimize the impact on our operations and sustain our liquidity position, including receiving support through

the US payroll protection program loan (“PPP”), a low interest, fixed rate loan provided under the UK’s Coronavirus

Business Interruption Loan (“CBILS”) and the deferral of certain UK taxes.

We have also worked with our product suppliers

to ensure we will continue to have sufficient inventory levels on hand to meet consumer demand.

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 further 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 on the U.S.

financial markets.

The inability to obtain appropriate financing, may affect

its compliance requirements as a public company.

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.

17 unchanged sentences

June 14, 2018.

the Company had a two-year Executive Employment Agreement with Mr.

Phipps, effective January 1, 2016 (the “Original Phipps

Agreement”).

Under the Original Phipps Agreement, Mr.

Phipps agreed to serve as the Company’s Chief Executive Officer

and President and received an annual base salary equal to the sum of $144,000 and £48,000, or $61,293 at the yearly conversion

rate of 1.276933.

Phipps was also eligible for bonus compensation in an amount equal to up to fifty (50%) percent of his then-current

base salary if the Company meets or exceeds criteria adopted by the Compensation Committee, if any, or Board and equity awards

as may be approved in the discretion of the Compensation Committee or Board.

On January 1, 2018, the Original Phipps Agreement

automatically renewed for another year.

on June 14, 2018, we entered into a new Employment Agreement (“Carlise Agreement”) with our Chief Financial Officer,

14 unchanged sentences

June 14, 2018.

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to June 14, 2018, the Company had a one-year agreement with Ms.

Carlise, as its Chief Financial Officer, Treasurer and Secretary

(the “Original Carlise Agreement”).

The Original Carlise Agreement provided for an annual compensation of $140,000

as well as medical benefits.

The Original Carlise Agreement was effective December 1, 2016 and had an automatic renewal clause

pursuant to which the Original Carlise Agreement renews itself for another year, if not cancelled by the Company previously.

Original Carlise Agreement had been automatically extended for an additional term of one year on December 1, 2017.

to the base salary of $140,000 annually, Ms.

Carlise was eligible to receive an annual cash bonus if the Company meets or exceeds

criteria adopted by the Compensation Committee of the Board of Directors and shall be eligible for grants of awards under stock

option or other equity incentive plans of the Company.

TO CONSOLIDATED FINANCIAL STATEMENTS

March 13, 2020, the Company and David Phipps and Theresa Carlise, the Company’s Chief Executive Officer and Chief Financial

3 unchanged sentences

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

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;

retained Theresa Carlise’s services on a non-exclusive basis as Comptroller for cash compensation of $2,000/month.

will facilitate the transition of CFO duties following the expiration of her employment agreement on October 13, 2020.

Her engagement

may be terminated upon one week’s notice;

appointed Thomas Seifert as the Company’s Chief Financial Officer, Secretary and Treasurer 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 Mr.

Phipps executed a waiver of the provisions in his employment agreement requiring prior written notice of non-renewal

to the other party.

As a result, his employment terms with the Company were not automatically extended as set forth in 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 13, 2020.

On November 12,

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

March 11, 2021, the Company’s Board of Directors approved and adopted the terms and provisions of employment agreements

for David Phipps, the Company’s Chief Executive Officer, and Thomas Seifert, the Company’s Chief Financial Officer.

initial term of Mr.

Phipps’

employment is one year commencing on March 11, 2021 which term will be automatically extended

for additional one-year terms thereafter unless terminated by the Company or the executive by written notice.

CEO’s annual

base compensation is an aggregate of $180,000 payable by the Company and £50,000 (or approximately $70,000) payable through

the Company’s wholly owned subsidiary, Global Telesat Communications Ltd., subject to periodic review and modification by

the Board upon occurrence of material events relating to the Company’s financial and business performance, including, without

limitation, the Company’s listing of its capital stock on a national securities exchange.

In addition, Mr.

Phipps will be

entitled to receive an annual cash bonus in an amount equal to up to 150% of his base salary if the Company meets or exceeds performance

criteria to be adopted by the Compensation Committee of the Board, once established, and any other additional bonuses as may be

determined by the Board.

Phipps is entitled to receive various other benefits if and to the extent available to the employees

of the Company.

The employment agreement may be terminated based on death or disability of the executive, for cause or without

good reason, for cause or with good reason, and as a result of the change of control of the Company.

The employment agreement

also contains certain provisions that are customary for agreements of this nature, including, without limitation, non-competition

and non-solicitation covenants, indemnification provisions, etc.

initial term of Mr.

Seifert’s employment is one year commencing on March 11, 2021 which term will be automatically extended

for additional one-year terms thereafter unless terminated by the Company or the executive by written notice.

CFO’s annual

base compensation is $150,000 payable by the Company, subject to periodic review and modification by the Board’s Compensation

Committee, once established.

Seifert will be entitled to receive an annual cash bonus in an amount equal to up to 150% of

his base salary if the Company meets or exceeds performance criteria to be adopted by the Compensation Committee of the Board,

once established, and any other additional bonuses as may be determined by the Board.

Seifert is entitled to receive various

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

The employment agreement may be terminated based

on death or disability of the executive, for cause or without good reason, for cause or with good reason, and as a result of the

change of control of the Company.

The employment agreement also contains certain provisions that are customary for agreements

of this nature, including, without limitation, non-competition and non-solicitation covenants, indemnification provisions, etc.

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.

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

34 unchanged sentences

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

ORBSAT CORP AND SUBSIDIARIES

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, the Company had current and long-term operating lease liabilities of $30,125 and $22,574, respectively, and

right of use assets of $55,606.

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

minimum lease payments under these leases are as follows:

Ending December 31,

3 unchanged sentences

average remaining term

the Company’s financial statements for periods prior to January 1, 2019, the Company accounts for leases under ASC 840,

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

Net rent expense for the years ended December 31,

2019 and 2018 were $31,563 and $27,851, respectively.

rent expense for the years ended December 31, 2020 and 2019 were $32,607 and $31,563, respectively.

time to time, the Company may become involved in litigation relating to claims arising out of our operations in the normal course

4 unchanged sentences

RELATED PARTY TRANSACTIONS

Company entered into a note for $122,536 from the Company’s Chief Executive Officer as part of the Share Exchange Agreement

on February 15, 2015.

On May 11, 2018, the balance of $5,768, was paid in full.

As of December 31, 2019, the accounts payable

due to related party includes;

advances for inventory and services due to David Phipps of $43,403, accrued director fees of $5,000

due to Hector Delgado, Director and service and fees due to Theresa Carlise of $2,668.

Total related party payments due as of

December 31, 2019 and December 31, 2018 are $51,071 and $39,027, respectively.

Those related party payable are non-interest bearing

and due on demand.

Company’s UK subsidiary, GTCL has an overadvance line of credit with HSBC, for working capital needs.

The overadvance limit

is £25,000 or $33,155 at an exchange rate of 1.3262, with interest at 5.50% over Bank of England’s base rate or current

rate of 6.25% variable.

of December 31, 2020, the accounts payable due to related party includes advances for inventory and services due to David Phipps

of $90,809, accrued director fees of $5,000 due to Hector Delgado and accrued salary due to Thomas Seifert of $6,250.

Total related

party payments due as of December 31, 2020 and December 31, 2019 are $102,060 and $51,071, respectively.

Those related

party payable are non-interest bearing and due on demand.

Company’s UK subsidiary, GTCL has an over-advance line of credit with HSBC, for working capital needs.

The over-advance

limit is £25,000 or $34,163 at an exchange rate of 1.3665, with interest at 5.50% over Bank of England’s base

rate or current rate of 6.25% variable.

The advance is guaranteed by David Phipps, the Company’s Chief Executive Officer.

The Company has

two American Express accounts, for Orbital Satcom Corp.

and GTCL, of which are in the name of David Phipps, who personally guarantees

the balance owed.

Company employs two individuals who are related to Mr.

Phipps, of which earned gross wages totaling $66,925 and $72,312 for the

years ended December 31, 2019 and 2018, respectively.

ORBSAT CORP AND SUBSIDIARIES

The Company has an American Express account for Orbital Satcom Corp.

and an American Express account for GTCL, both in the name

of David Phipps who personally guarantees the balance owed.

Company employs three individuals related to Mr.

Phipps who earned gross wages totaling $85,722 and $66,925 for the years ended

December 31, 2020 and 2019, respectively.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

17 - CONCENTRATIONS

3 unchanged sentences

the years ended December 31, 2020 and 2019.

December 31, 2019

December 31, 2018

Network Innovations

Globalstar Europe

Cygnus Telecom

following table sets forth revenue as to each geographic location, for the years ended December 31, 2020 and 2019:

Year Ended December 31, 2019

Year Ended December 31, 2018

North America

South America

Asia & Pacific

Ended December 31, 2020

Ended December 31, 2019

SUBSEQUENT EVENTS

January 4, 2021, the Company issued an aggregate of 150,000 shares of common stock upon the conversion of convertible debt, as

issued on May 13, 2019, in the amount of $3,629.

February 10, 2020, the Company issued an aggregate of 25,421 shares of common stock upon the conversion of convertible debt, as

issued on May 13, 2019, in the amount of $2,542.

February 11, 2020, the Company issued an aggregate of 23,580 shares of common stock upon the conversion of convertible debt, as

issued on May 13, 2019, in the amount of $2,358.

February 18, 2020, the Company issued an aggregate of 13,192 shares of common stock upon the conversion of convertible

debt, as issued on May 13, 2019, in the amount of $1,319.

February 19, 2020, the Company issued an aggregate of 4,468 shares of common stock upon the conversion of convertible debt, as

issued on May 13, 2019, in the amount of $447.

issued on August 21, 2020, in the amount of $30,000.

February 19, 2021, the Board of Directors of the Company unanimously adopted an amendment to the Company’s Articles of Incorporation

to effect a reverse stock split at a ratio of (i) no less than 1-for-2 shares of Common Stock, and (ii) no more than 1-for-5 shares

of Common Stock, the exact ratio to be determined in the sole discretion of the Board of Directors, at any time before August

Our Board of Directors has obtained (by written consent) the approval of the Company’s stockholders who, in the

aggregate, own 2,686,337 shares of Common Stock, or 63.5% of the outstanding shares of Common Stock of the Company prior to the

Reverse Split Action.

February 22, 2021, the Company issued an aggregate of 1,001,446 shares of common stock upon the conversion of convertible debt,

as issued on May 13, 2019 and August 21, 2020, in the amount of $200,289.

February 22, 2021, the Company issued an aggregate of 5,000 shares of common stock for services in the amount of $19,950.

March 1, 2021, the Company issued an aggregate of 940,740 shares of common stock upon the conversion of convertible debt, as issued

on May 13, 2019, in the amount of $1,031.

March 13, 2020, Orbsat Corp and David Phipps and Theresa Carlise, the Company’s Chief Executive Officer and Chief Financial

Officer, respectively, 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 will not be automatically extended

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

on May 13, 2019, August 21, 2020 and December 4, 2020, in the amount of $188,148.

March 5, 2021, the Company entered into a Note Purchase Agreement (the “March 2021 NPA”) by and between the

Company and one individual accredited investor.

Pursuant to the terms of the March 2021 NPA, the Company sold a convertible

promissory note with a principal amount of $350,000 (the “March 2021 Note”).

The March 2021 Note

is a general, unsecured obligation of the Company and bears simple interest at a rate of 7% per annum, and mature on the third

anniversary of the date of issuance, to the extent that the March 2021 Note and the principal amount and any interest accrued

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

In the event that any amount due under the

March 2021 Note is not paid as and when due, such amount 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 March 2021 Note other than as required by the Agreement.

The Noteholder have an optional right of conversion such that a Noteholder may elect to convert his March 2021 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 indebtedness under the March 2021 Note price equal to the lesser of (a) $1.50

per share, and (b) a 30% discount to the price of the common stock in the qualified transaction.

Following an event of default,

the conversion price shall be adjusted to be equal to the lower of:

(i) the then applicable conversion price or (ii) the price

per share of 85% of the lowest traded price for the Company’s common stock during the 15 trading days preceding the relevant

In addition, subject to the ownership limitations, if a qualified transaction is completed, without further action

from the Noteholder, on the closing date of the qualified transaction, 50% of the principal amount of this Note and all accrued

and unpaid interest shall be converted into Company common stock at a conversion price equal to the 30% discount to the offering

price in such qualified transaction, which price shall be proportionately adjusted for stock splits, stock dividends or similar

A “Qualified Transaction”

refers the completion of the public offering of the Company’s securities stock

with gross proceeds of at least $10,000,000 pursuant to which the Company’s securities become registered pursuant to Section

12(b) of the Securities Exchange Act of 1934, as amended, or a merger with a company listed on the Nasdaq or Canadian stock exchanges,

The Noteholder is granted registration rights and pre-emptive rights.

In addition, the March 2021 NPA 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.

March 11, 2021, the Company’s Board of Directors approved and adopted the terms and provisions of employment agreements

for David Phipps, the Company’s Chief Executive Officer, and Thomas Seifert, the Company’s Chief Financial Officer.

initial term of Mr.

Phipps’

employment is one year commencing on March 11, 2021 which term will be automatically extended

for additional one-year terms thereafter unless terminated by the Company or the executive by written notice.

CEO’s annual

base compensation is an aggregate of $180,000 payable by the Company and £50,000 (or approximately $70,000) payable through

the Company’s wholly owned subsidiary, Global Telesat Communications Ltd., subject to periodic review and modification by

the Board upon occurrence of material events relating to the Company’s financial and business performance, including, without

limitation, the Company’s listing of its capital stock on a national securities exchange.

In addition, Mr.

Phipps will be

entitled to receive an annual cash bonus in an amount equal to up to 150% of his base salary if the Company meets or exceeds performance

criteria to be adopted by the Compensation Committee of the Board, once established, and any other additional bonuses as may be

determined by the Board.

Phipps is entitled to receive various other benefits if and to the extent available to the employees

of the Company.

The employment agreement may be terminated based on death or disability of the executive, for cause or without

good reason, for cause or with good reason, and as a result of the change of control of the Company.

The employment agreement

also contains certain provisions that are customary for agreements of this nature, including, without limitation, non-competition

and non-solicitation covenants, indemnification provisions, etc.

initial term of Mr.

Seifert’s employment is one year commencing on March 11, 2021 which term will be automatically extended

for additional one-year terms thereafter unless terminated by the Company or the executive by written notice.

CFO’s annual

base compensation is $150,000 payable by the Company, subject to periodic review and modification by the Board’s Compensation

Seifert will be entitled to receive an annual cash bonus in an amount equal to up to 150% of his base salary if

the Company meets or exceeds performance criteria to be adopted by the Compensation Committee of the Board, once established,

and any other additional bonuses as may be determined by the Board.

Seifert is entitled to receive various other benefits

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

The employment agreement may be terminated based on death or disability

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

The employment agreement also contains certain provisions that are customary for agreements of this nature, including,

without limitation, non-competition and non-solicitation covenants, indemnification provisions, etc.

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

What changed 10-K

Item 9A. Controls and Procedures