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Item 9A. Controls and Procedures

2022-03-31 compared with 2021-03-22 · 3177 added, 2093 removed, 285 unchanged (95% of the section changed)

Controls and Procedures.

Management’s

Conclusions Regarding Effectiveness of Disclosure Controls and Procedures

controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in

the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified

in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief

executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well

designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required

to apply its judgment in evaluating and implementing possible controls and procedures.

controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports

we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules

and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer

and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating our

disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated,

can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in

evaluating and implementing possible controls and procedures.

management does not expect that our disclosure controls and procedures will prevent all error and all fraud.

A control system,

no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s

objectives will be met.

Further, the design of a control system must reflect the fact that there are resource constraints, and

the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems,

no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur

because of simple error or mistake.

The design of any system of controls is based in part upon certain assumptions about the likelihood

of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential

future conditions.

of the end of the period covered by this Annual Report, under the supervision and with the participation of management, including

the Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”), the Company conducted an evaluation

of its disclosure controls and procedures.

As defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, the term “disclosure

controls and procedures”

means controls and other procedures of an issuer that are designed to ensure that information required

to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized

and reported, within the time periods specified in the Commission’s rules and forms.

A control system, no matter

how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls

must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can

provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

These inherent limitations include

the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no

assurance that any design will succeed in achieving its stated goals under all potential future conditions.

of the end of the period covered by this Annual Report, under the supervision and with the participation of management, including the

Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”), the Company conducted an evaluation of its

disclosure controls and procedures.

include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer

in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management,

including the Certifying Officers, to allow timely decisions regarding required disclosure.

Based on this evaluation, the Certifying

Officers have concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2020

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

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

Based on this evaluation, the Certifying Officers have concluded that the Company’s disclosure

controls and procedures were not effective as of December 31, 2021, due to our limited internal audit functions and lack of ability to

have multiple levels of transaction review.

As defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, the term “disclosure

controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required

to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported,

within the time periods specified in the Commission’s rules and forms.

Disclosure controls and procedures include, without limitation,

controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits

under the Exchange Act is accumulated and communicated to the Company’s management, including the Certifying Officers, to allow

timely decisions regarding required disclosure.

Company intends to address the foregoing deficiency by upgrading its accounting software to an ERP (“Enterprise Resource Planning”),

a cloud-based solution, which would add the necessary controls to manage day to day activities such as accounting, procurement, project

management, risk management and compliance as well as to automate the consolidation process of its entities, adding a level of reliability

to the Company’s financial reporting.

The Company proposes to add personnel to address the lack of ability to have multiple level

transaction review.

Management is addressing these steps immediately and has executed an agreement on August 11, 2021, to start implementation

of replacing its current software to an ERP cloud-based solution.

Management anticipates the new ERP solution to be fully operational

by the end of the 2022 fiscal year.

Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules

13a-15(f) and 15d-15(f) under the Exchange Act.

Our management is also required to assess and report on the effectiveness of our

internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.

Management assessed

the effectiveness of our internal control over financial reporting as of December 31, 2020.

In making this assessment, we used

the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated

Framework (2013).

During our assessment of the effectiveness of internal control over financial reporting as of December 31, 2020,

management identified significant deficiencies related to (i) our internal audit functions and (ii) a lack of segregation of duties

within accounting functions.

Therefore, our internal controls over financial reporting were not effective as of December 31, 2020.

has determined that our internal audit function is significantly deficient due to insufficient qualified resources to perform

internal audit functions.

to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible.

However, to the extent possible, we will implement procedures to assure that the initiation of transactions, the custody of assets

and the recording of transactions will be performed by separate individuals.

believe that the foregoing steps will remediate the significant deficiency identified above, and we will continue to monitor the

effectiveness of these steps and make any changes that our management deems appropriate.

Due to the nature of this significant

deficiency in our internal control over financial reporting, there is more than a remote likelihood that misstatements which could

be material to our annual or interim financial statements could occur that would not be prevented or detected.

management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)

and 15d-15(f) under the Exchange Act.

Our management is also required to assess and report on the effectiveness of our internal control

over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.

Management assessed the effectiveness of our

internal control over financial reporting as of December 31, 2021.

In making this assessment, we used the criteria set forth by the Committee

of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013).

During our assessment

of the effectiveness of internal control over financial reporting as of December 31, 2021, management identified significant deficiencies

related to (i) our internal audit functions and (ii) a lack of segregation of duties within accounting functions.

Therefore, our internal

controls over financial reporting were not effective as of December 31, 2021.

has determined that our internal audit function is significantly deficient due to insufficient qualified resources to perform internal

audit functions.

to our size and nature, segregation of all conflicting duties may not always be possible or economically feasible.

the extent possible, we will implement procedures to assure that the initiation of transactions, the custody of assets and the recording

of transactions will be performed by separate individuals.

believe that the foregoing steps will remediate the significant deficiency identified above, and we will continue to monitor the effectiveness

of these steps and make any changes that our management deems appropriate.

Due to the nature of this significant deficiency in our internal

control over financial reporting, there is more than a remote likelihood that misstatements which could be material to our annual or

interim financial statements could occur that would not be prevented or detected.

material weakness (within the meaning of PCAOB Auditing Standard No.

5) is a deficiency, or a combination of deficiencies, in

internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual

or interim financial statements will not be prevented or detected on a timely basis.

A significant deficiency is a deficiency,

or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet

important enough to merit attention by those responsible for oversight of the company’s financial reporting.

5) is a deficiency, or a combination of deficiencies, in internal

control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial

statements will not be prevented or detected on a timely basis.

A significant deficiency is a deficiency, or a combination of deficiencies,

in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by

those responsible for oversight of the company’s financial reporting.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes

in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

annual report does not include an attestation report of our registered public accounting firm regarding internal control over

financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant

to rules the SEC that permit us to provide only management’s report in this annual report.

Projections of any evaluation

of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that

the degree of compliance with the policies and procedures may deteriorate.

This Annual Report on

Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial

Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules the SEC

that permit us to provide only management’s report in this annual report.

in Internal Controls

have been no changes in our internal control over financial reporting during the fourth quarter ended December 31, 2020 that have

materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

have been no changes in our internal control over financial reporting during the fourth quarter ended December 31, 2021, that have materially

affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Directors, Executive Officers and Corporate Governance.

following table presents information with respect to our executive officers, directors and significant employees as of the date

of this report:

following table presents information with respect to our executive officers, directors and significant employees as of the date of this

First Elected or Appointed

Executive Officer, President and Chairman

Financial Officer, Treasurer and Secretary

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

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

following is a brief account of the education and business experience during at least the past five years of our officers and

directors, indicating each person’s principal occupation during that period, and the name and principal business of the

organization in which such occupation and employment were carried out.

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.

Delgado is currently

the Executive Officer of the Naval Reserve Special Operations Command South (SOCSOUTH) Detachment 108.

He has also served as a

Special Agent in the United States Department of Homeland Security since 1995 and as the Managing Member of ISR Strategies, LLC,

a full-service security consulting company, since 2010.

He is a United States Navy SEAL with active and reserve service for over

twenty-eight years.

In 2006, he was mobilized and served a combat tour in Ramadi, Iraq with SEAL Team THREE receiving a Navy Commendation

Medal with Combat “V”.

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

Delgado has participated in tours of duty in the Middle East, Europe, Africa and South America.

He has also served

as an adjunct instructor at the United States Merchant Marine Academy teaching maritime security and conducting International

Ship Security Code (ISPS) training and assessments.

Delgado was appointed to serve as a director of the Company based on his

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

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

Chairman and Chief Executive Officer

and President of NextPlat.

Chief Executive Officer of Global Operations

Vice President and Chief Financial Officer

Accounting Officer, Treasurer and Secretary

Vice President of Operations

Chairman and Chief Business Development Strategist

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

following is a brief account of the education and business experience during at least the past five years of our directors and executive

officers, indicating each person’s principal occupation during that period, and the name and principal business of the organization

in which such occupation and employment were carried out.

Fernandez , Director, Executive Chairman and Chief Executive Officer , 60, has served as the Company’s Executive

Chairman since May 28, 2021 and its Chief Executive Officer since June 5, 2021.

Fernandez was a co-founder and the Chairman of Kempstar

(a large-scale marketer of energy and agricultural commodities) from November 2015 through June 2020;

a member of the Supervisory Board

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

Chief Executive Officer of eApeiron Solutions (a

brand protection and e-commerce company) from June 2016 through December 2018;

served as the founder and Chief Investment Officer of

Barnstar Funds, LP (a fund established in 2012 for investment in special situations across the capital markets) from October 2012 through

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

through December 2012.

Fernandez was chosen to serve as a director of the Company based on his 30 years’ experience identifying

profitable start-up and dislocation opportunities, building significant value and executing both private and public exit strategies.

Phipps, Director, President of Orbsat and Chief Executive Officer of Global Operations , 56.

Phipps has served as the Chief

Executive Officer of Global Operations since June 2, 2021, and as the Managing Director of the Company’s wholly owned UK subsidiary,

Global Telesat Communications LTD (“GTC”), since 2008.

He served as the President of the Company since February 19, 2015

and as a member of the Board since February 24, 2015, and Chairman of the Board from February 24, 2015 until May 23, 2021 and Chief Executive

Officer of the Company from February 25, 2015 to June 2, 2021.

He has over 20 years’ experience in the communications industry,

during which time he has overseen acquisitions, mergers and capital raising activities, and has more than 35 years of experience of investment

management, finance, and operational roles in several private and public companies.

Phipps was chosen as a director of the Company

based on his knowledge of and relationships in the global satellite communications business.

Thomson, Executive Vice President and Chief Financial Officer, 65.

Thomson has served as Executive Vice President of the

Company since August 24, 2021, and as Chief Financial Officer of the Company since October 9, 2021.

Thomson has over 43 years of

finance and enterprise risk management experience, supporting corporate growth through operational restructuring and business transactions.

Thomson spent twelve years in public accounting with Price Waterhouse in the UK, Venezuela and the United States before taking senior

finance and risk management roles in the broadcast, multi-level marketing, commercial real estate and financial advisory industries.

Thomson served as Chief Compliance Officer of Fairholme Capital Management, L.L.C.

and Fairholme Funds, Inc.

from 2008 to January

Thomson was appointed to the position of Executive Vice President of the Company on August 24, 2021 and had previously provided

consulting services to the Company for a period of one month in 2021 prior to his employment with the Company.

Thomson holds a Bachelor

of Arts in Engineering Science and Economics from Jesus College, Oxford University.

Carlise , Chief Accounting Officer, Treasurer and Secretary , 63, Ms.

Carlise was appointed as the Company’s

Chief Accounting Officer, Treasurer and Secretary on June 22, 2021.

Carlise previously served as the Company’s Chief Financial

Officer, Treasurer and Secretary from June 9, 2015 until the October 16, 2020 expiration of her CFO employment agreement with the Company.

The Company retained her services on a non-exclusive basis as the Company’s Comptroller to facilitate the CFO transition until

December 7, 2020.

Prior thereto she served as a financial advisor to FTE Networks (OTCQX:

FTNW), a provider of infrastructure services

for the telecommunications and wireless sector, from May 2014 through March 2015, and as Chief Financial Officer and director from September

2011 through May 2014.

Prior to FTE Networks, she served as the Chief Executive Officer, Chief Financial Officer and a director of CSI

Consultants Inc., 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.

LVRE), a developer

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

From October 2006 to November

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

From October 1986 to April 2003, Ms.

Carlise served as Chief Financial Officer, senior vice president and a director of National Record

NRMI) the fourth largest music retailer in the US, as according to number of retail locations, generating approximately

$200 million annually, in 38 states, Hawaii and Guam.

Carlise holds a Bachelor of Science in Finance with a Concentration in Monetary

Economics, from Indiana University of Pennsylvania.

Cohen, Senior Vice President of Operations, 60, Mr.

Cohen was appointed as the Company’s Vice President of Operations on

October 9, 2021.

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

are no family relationships between any of our directors or executive officers.

Cohen has 35 years of experience in the private equity and real estate sectors.

From 1996 through 2009, he was a

Partner at Apollo Real Estate Advisors, where he was involved in the acquisition, financing, asset management and disposition of office,

residential, retail and hospitality properties throughout the United States.

From 2010 through 2016, he was a Managing Director of First

Atlantic Real Estate, where he was head of U.S.

investments for a Europe-based fund.

Most recently, from 2017 to 2019, he was a Partner

at Arel Capital, investing in multifamily assets on behalf of institutional and private investors.

Cohen received his BA from Brown

University and MBA from Columbia Business School.

Ellenoff, Director, Vice Chairman and Chief Business Development Strategist , 62 ,

was appointed to the Board of Directors as Vice Chairman and as the Company’s Chief Business Development Strategist on August

Ellenoff is the founder and a partner at Ellenoff Grossman & Schole LLP, a law

firm based in NYC with more than 120 professionals, and he is a corporate and securities attorney with a focus in business transactions,

mergers and acquisitions and corporate financings.

Ellenoff has represented companies in connection with their initial public offerings,

secondary public offerings, PIPEs, crowdfunding, regulatory compliance, as well as strategic initiatives and general corporate governance

Ellenoff has established his firm as a leader in several alternative finance programs, including SPACs, PIPEs, RDs and Crowdfunding.

Along with other members of his Firm, Mr.

Ellenoff has been involved at various stages with over 300 SPACs and numerous associated SPAC

business combinations.

Ellenoff Grossman & Schole LLP was founded in 1992.

Ellenoff is also a Managing Member at ESQVest LLP,

a venture capital firm that invests in early-stage legal technology companies since its founding in 2014.

Mr Ellenoff’s broad

experience in capital markets and corporate governance matters brings significant expertise in these areas to our Board of Directors.

Delgado , Director , 53, was appointed to the Board of Directors on May 27, 2015.

Delgado is currently the Executive

Officer of the Naval Reserve Special Operations Command South (SOCSOUTH) Detachment 108.

Delgado has served as the President of ASR

Alert Systems since 2018.

He previously served as a Special Agent in the United States Department of Homeland Security from 1995 to 2018

and as the Managing Member of ISR Strategies, LLC, a full-service security consulting company, since 2010.

He is a United States Navy

SEAL with active and reserve service for over twenty-eight years.

In 2006, he was mobilized and served a combat tour in Ramadi, Iraq

with SEAL Team THREE receiving a Navy Commendation Medal with Combat “V”.

He has served with SEAL Teams TWO, THREE, FOUR,

EIGHTEEN and Special Operations Command Central and South.

Delgado has participated in tours of duty in the Middle East, Europe,

Africa and South America.

He has also served as an adjunct instructor at the United States Merchant Marine Academy teaching maritime

security and conducting International Ship Security Code (ISPS) training and assessments.

Delgado was appointed to serve as a director

of the Company based on his leadership and entrepreneurial experience and particular familiarity with the military and governmental agencies.

Carpenter , Director , 66, was appointed to the Board of Directors on May 28, 2021.

From 2006 to 2019, Ms.

has held the offices of CFO, Executive Vice-President of ComSovereign Holding Corp.

(COMS), a Nasdaq company in the aviation industry,

where she has been responsible for the matters of SEC compliance and reporting, accounting, audit, banking, HR and benefits, payroll,

corporate administration, board governance, legal, contracts and risk management.

Carpenter holds a Bachelor’s degree in Accounting

from Oklahoma State University, and a CPA license in the State of Oklahoma;

she is also a Certified Management Accountant (CMA) and Chartered

Global Management Accountant (CGMA).

Carpenter was chosen to serve as a director of the Company based on her leadership positions

in public companies as well as her expertise in compliance and finance.

Cusimano , Director , 75, was appointed to the Board of Directors on May 28, 2021.

Cusimano’s dual career

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

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

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

In this role, in addition to day-to-day oversight, his responsibilities included maintaining close and continuous liaison with

representatives of Congress, the aviation industry, including interest groups, the general public, all air carriers, the national

military establishment, other Federal agencies, and foreign flight operations, and airworthiness authorities.

Over the course of his

career at the FAA, he held a number of key management positions including serving at “Acting Director” and as the Division

Manager of the Air Transportation Division and Certification and Surveillance Division.

He also served the FAA in executive level management

positions as Division Manager of the Safety Programs Division within FAA’s Office of Systems Safety which reported directly to

the Administrator of the FAA.

Cusimano’s parallel career as an Air Force officer and pilot spanned 30 years of service, culminating

with attaining the rank of full colonel, and retiring as Wing Commander, 459th Airlift Wing.

He was senior ranking officer in charge

of over 1,400 reservists and nine C-141B/C strategic airlift aircraft which conducted world-wide combat airlift and airlift support missions

for the Air Mobility Command.

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

Cusimano holds an airline

transport pilot certificate, flight engineer certificate, and flight instructor certificate with fixed wing, rotorcraft, and instrument

instructor ratings.

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

He earned a Bachelor of Arts degree

in experimental psychology from Hofstra University in 1969 and he completed National Security Management School in 1987.

top secret clearances at the FAA and with the Air Force.

Cusimano is certified as an ISO-9000:2000 Auditor with the International

Cusimano was chosen to serve as a director because of his more than 35 years of experience in

government and professional roles including as Acting Director of the FAA.

Miller, Director , 80, was appointed to the Board of Directors on May 28, 2021.

Lieutenant General (Retired) John E.

served over 34 years in the US Army.

Commissioned as an Infantry Officer, he served in line units, staff positions and Army Schools.

He had multiple assignments at the US Army Command and General Staff College where he taught Tactics and Wargaming Instructor and served

as the Deputy Commandant and later Commandant.

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

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

from December 2017 to November 2019.

He holds a Bachelor’s degree in Mathematics from Missouri State University and a Master’s degree in Operations Research from

Georgia Tech.

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

Miller also attended Executive

Development programs at Yale University, the Menninger Foundation and Leadership at the Peak, Denver, CO.

Miller was chosen to serve

as a director of the Company based on his leadership, his knowledge of and relationships in aerospace industries, and his familiarity

with the military and governmental agencies.

Barreto, Director, 64, was appointed to the Board of Directors effective January 20, 2022.

is President and CEO of the Barreto Group and of Barreto Hospitality since their founding.

The Barreto Group, which was founded in 1988,

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

Barreto Hospitality,

which was founded in 2020, is the food, beverage, and hospitality arm of the Company boasting a wide array of dining and entertainment

venues across South Florida.

Barreto is also the founding partner of Floridian Partners, LLC.

Floridian Partners LLC, which was founded

in 2000, is a consulting firm that develops and manages effective corporate and public affairs strategies designed to achieve specific

business results.

Barreto has also served as the CEO of Barreto Capital, LLC, a private money lender, since November 2018.

has chaired the Super Bowl Host Committee a record three (3) times, in the years 2007, 2010 and 2020.

Barreto was appointed

to serve as a director of the Company based on his significant leadership and entrepreneurial experience.

director is related to any other director or executive officer of our Company or our subsidiaries, and, there are no arrangements

or understandings between a director and any other person pursuant to which such person was elected as director.

in Certain Legal Proceedings

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.

Delgado is the only “independent”

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

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

Phipps acts as our Chairman and Chief Executive Officer.

We have no policy requiring either that the positions of the Chairman

of the Board and the Chief Executive Officer be separate or that they be occupied by the same individual.

The Board of Directors

believes that this issue is properly addressed as part of the succession planning process and that a determination on this subject

should be made when it elects a new chief executive officer or at such other times as when consideration of the matter is warranted

by circumstances.

Currently, the Board of Directors believes that the Chief Executive Officer is best situated to serve as Chairman

because he is the director most familiar with the Company’s business and industry, and most capable of effectively identifying

strategic priorities and leading the discussion and execution of strategy.

Independent directors and management have different

perspectives and roles in strategy development.

Delgado, our independent director, brings experience, oversight and expertise

from outside the Company and from a variety of industries, while the CEO brings extensive experience and expertise specifically

related to the Company’s business.

The Board of Directors believes that the current combined role of Chairman and CEO promotes

strategy development and execution, and facilitates information flow between management and the Board of Directors, which are

essential to effective governance.

of the key responsibilities of the Board of Directors is to develop strategic direction and hold management accountable for the

execution of strategy once it is developed.

The Board of Directors believes the current combined role of Chairman and Chief Executive

Officer, combined with having an independent director, is in the best interest of stockholders because it provides the appropriate

balance between strategy development and independent oversight of management.

Board of Directors is primarily responsible for overseeing our risk management processes on behalf of the Company.

Directors receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate

regarding our Company’s assessment of risks.

The Board of Directors focuses on the most significant risks facing our Company

and our Company’s general risk management strategy, and also ensures that risks undertaken by our Company are consistent

with the Board’s appetite for risk.

While the Board oversees our Company’s risk management, management is responsible

for day-to-day risk management processes.

We believe this division of responsibilities is the most effective approach for addressing

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

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.

Committee of the Board of Directors

members of the Audit Committee are Kendall Carpenter, Louis Cusimano and Hector Delgado.

Each member of the Audit Committee is independent

as defined by the Nasdaq Rules.

Kendall Carpenter is the Chairperson of the Audit Committee.

In addition, each member of the Audit Committee

satisfies the additional requirements of the SEC and Nasdaq Rules for audit committee membership, including the additional independence

requirements and the financial literacy requirements.

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

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

The primary purpose of the

Audit Committee is to oversee the quality and integrity of our accounting and financial reporting processes and the audit of our financial

The Audit Committee is responsible for selecting, compensating, overseeing and terminating the selection of our independent

registered public accounting firm.

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.

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

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

A copy of the Company’s

Code of Ethics may be obtained on our website at www.NextPlat.com .

We intend to disclose future amendments to such code, or any

waivers of its requirements, applicable to any principal executive officer, principal financial officer, principal accounting officer

or controller, or persons performing similar functions or our directors on our website identified above.

The inclusion of our website

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

Report on Form 10-K.

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.

solely upon a review of reports on Forms 3, 4 and 5 and any amendments thereto furnished to the Company pursuant to Section 16 of the

Exchange Act, and written representations from the Section 16 officers and directors that no other reports were required, the Company

reports that we believe all Forms 3, 4 and 5 showing ownership of and changes of ownership in our capital stock or similar reportable

transactions which took place during the 2021 fiscal year were timely filed with the SEC, other than the inadvertent late filing of one

Form 3 for Mr.

Cohen of reporting 2 transactions, one Form 3 for Mr.

Ellenoff reporting 9 transactions, one Form 3 for Mr.

Thomson reporting

2 transactions, one Form 3 for Sarwar Uddin, one Form 3 for Mr.

Cusimano, one Form 3 for Mr.

Fernandez reporting 3 transactions, one

Form 3 for Ms.

Carpenter, one Form 3 for Mr.

Miller, one Form 4 for Mr.

Phipps reporting one transaction, one Form 4 for Mr.

reporting one transaction, and one Form 3 for Mr.

Seifert reporting three transactions.

believe it is important that our Board of Directors is composed of individuals reflecting the diversity represented by our employees,

our customers, and our communities.

We provide below disclosure regarding the diversity of our Board of Directors as required by the

listing standards of the NASDAQ Capital Market.

Diversity Matrix (as of March 28, 2022)

Number of Directors

Not Disclose Gender

Gender Identity

Demographic Background

American or Black

Native or Native American

Hawaiian or Pacific Islander

or More Races or Ethnicities

Not Disclose Demographic Background

Executive Compensation

2 unchanged sentences

of Regulation S-K) for the fiscal years ended December 31, 2021 and December 31, 2020.

and Principal Position

Incentive Plan

Chief Executive

President and Chairman (1)

Chief Financial

Secretary and Treasurer (2)

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

Name and Principal Position

Stock Awards ($) (2)

Option Awards ($) (2)

Non-Equity Incentive Plan Compensation ($)

Nonqualified Deferred Compensation Earnings ($)

Other Compensation ($) (3)

Fernandez Chief Executive

Officer and Chairman (3)(4)

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

Former* Chief Executive

Officer and Chairman of NextPlat (3)(5)

Douglas Ellenoff Vice Chairman and Chief Business Development

Strategist (6)

information regarding the Company’s current executive officers is provided above in the section entitled “ Information

About Directors and Executive Officers .”

October 7, 2021, on the approval and recommendation of the Compensation Committee, the Board approved a plan to make bonus payments

of $3,000 per month (each, a “Monthly Bonus”) to each of Mr.

Fernandez and Mr.

The Monthly Bonus payments were

approved in recognition of Messrs.

Fernandez’s and Phipps’ contributions to the Company.

The Monthly Bonus payments will

renew on a quarterly basis until terminated by the Board upon 30 days’ prior notice to Messrs.

Fernandez and Phipps.

shown in the “Stock Awards” and “Option Awards” column reflect the aggregate grant date fair value calculated

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

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

by our named executive officers.

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

the Black-Scholes option pricing model.

The assumptions used for the valuations are set forth in Note 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.

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 – Stockholders’ Equity

in the Notes included in the 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 proxy statement and related

notes for information with respect to stock options granted prior to fiscal 2020.

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

Health Insurance Coverage ($)

Automobile Allowance ($)

Board of Director Compensation ($)

Douglas Ellenoff

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

Phipps served as the President of the Company since February 19, 2015 and as a member of the Board since February 24, 2015, and

Chairman of the Board from February 24, 2015 until May 23, 2021 and Chief Executive Officer of the Company from February 25, 2015

to June 5, 2021.

Fernandez received the following equity awards on December 16, 2021:

of 101,000 shares of restricted common stock of the Company under the 2020 Plan.

All shares fully vested and issued on the Effective

of 275,000 shares of restricted common stock of the Company under the 2021 Plan.

Half of the shares fully vested and issued on the

Effective Grant Date.

The second half of the shares are to be issued and to vest on the first anniversary of the Effective Grant

of an option under the 2021 Plan to buy 75,000 shares of Company common stock at an exercise price of $3.81 per share.

vests one half on grant date and one half on the one-year anniversary of grant date.

The option has a term of 10 years.

Phipps received the following equity awards on December 16, 2021:

of 275,000 shares of restricted common stock of the Company under the 2021 Plan.

All shares fully vested and issued on the Effective

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

between the Company and Mr.

Ellenoff (the “Ellenoff Employment Agreement”),

the terms of the Ellenoff Employment Agreement, Mr.

Ellenoff was awarded, in lieu of cash compensation:

(i) a restricted stock award

of 100,000 shares of Common Stock of the Company, 40,000 of which were issued on September 9, 2021, and vested immediately, with

an additional 20,000 shares of restricted stock to be issued and to vest on each of August 24, 2022, August 24, 2023 and August 24,

2024, provided Mr.

Ellenoff continues to serve on the Board of Directors at any time during the year in which the restricted stock

is to vest, (ii) options to purchase a total of 1,500,000 shares of the Company’s Common Stock, 300,000 of which were vested

immediately, 150,000 of which will vest on each of the next three annual anniversaries of the commencement of his employment, and

the remaining 750,000 of which will vest at the rate of 250,000 per year on each of the first three anniversaries of the commencement

of his employment if during each such year Mr.

Ellenoff introduces the Company to twelve (12) or more potential Business Transactions

(as defined in the Ellenoff Agreement and which transactions need not be consummated);

provided that the Company’s Chief Executive

Officer may, in his sole discretion, waive the vesting requirement in any given year.

Such options will have an exercise price of

$5.35 per share and will terminate 5 years after they vest.

These equity awards to Mr.

Ellenoff were material to induce Mr.

to enter into the Ellenoff Agreement and were issued outside of a shareholder approved stock or option plan pursuant to the Nasdaq

“inducement grant” exception (Nasdaq Listing Rule 5635(c)(4)).

to Summary Compensation Table

Phipps compensation are set forth in his Employment Agreement, dated June 5, 2021, which was effective June 2, 2021 (as

amended, the “2021 Phipps Agreement”), which sets Mr.

Phipps’ annual base compensation at $350,000.

The terms of Mr.

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

which sets Mr.

Fernandez’s annual base compensation at $350,000.

The terms of Mr.

Ellenoff’s compensation are set forth in

the Ellenoff Employment Agreement which provides for equity compensation in lieu of a base cash compensation arrangement.

The 2021 Phipps

Employment Agreement, the June Agreement and the Ellenoff Employment Agreement are described below under the section titled “ Employment

Agreements ”.

the years ended December 31, 2021 and 2020, the Company recorded stock-based compensation of $3,758,424 and $904,900, respectively.

Employment Agreements

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

Phipps, with an

automatic one-year extension.

Under the Agreement, Mr.

Phipps will serve as the Company’s Chief Executive Officer and

President and will receive an annual base salary equal to the sum of $170,000 and £48,000 to be paid through our operating

subsidiary, GTCL.

For the years ended December 31, 2019 and 2018, the £48,000 equivalent to USD is $61,293 and $62,219 and

the yearly conversion rate is 1.276933 and 1.296229, respectively.

The agreement provides for a performance bonus based on exceeding

our annual revenue goals and on our ability to attract new investment.

The Agreement also provides for medical plan coverage,

an auto allowance, paid vacation, and discretionary stock grants and option awards.

In the event of termination without cause,

termination as a result of a change in control, or resignation with good reason (as defined in the Agreement), Mr.

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

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

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

The Agreement is for a period of two (2) years, with an automatic one (1) year extension.

Carlise’s base salary

is $150,000 per year.

The Agreement provides for performance bonuses based on exceeding our annual revenue goals and on our ability

to attract new investment.

The Agreement also provides for medical plan coverage, an auto allowance, paid vacation, and discretionary

stock grants and option awards.

In the event of termination without cause, termination as a result of a change in control, or

resignation with good reason (as defined in the Agreements), Ms.

Carlise will be entitled to a severance equal to twice her base

salary, the immediate vesting of all unvested options, and other benefits.

The Agreement terminates and supersedes the Original

Agreements and any subsequent amendments, effective as of the June 14, 2018.

On March 13, 2020, the Company 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

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.

Under the terms of the 2018 Phipps Agreement, Mr.

Phipps served as the Company’s Chief Executive

Officer and President and received an annual base salary equal to the sum of $170,000 and £48,000 paid through our operating subsidiary,

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

rate is 1.276933 and 1.296229, respectively.

The 2018 Phipps Agreement provided for a performance bonus based on exceeding our annual

revenue goals and on our ability to attract new investment.

The Agreement also provided for medical plan coverage, an auto allowance,

paid vacation, and discretionary stock grants and option awards.

In the event of termination without cause, termination as a result of

a change in control, or resignation with good reason (as defined in the 2018 Phipps Agreement), Mr.

Phipps was entitled to a severance

equal to twice his base salary, the immediate vesting of all unvested options, and other benefits.

As described below, the 2018 Phipps

Agreement terminated in accordance with its terms on June 14, 2020, and Mr.

Phipps and the Company subsequently entered into a new employment

March 13, 2020, the Company and David Phipps executed a waiver of the provisions in his employment agreement requiring prior written

notice of non-renewal to the other party.

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

in his employment agreement and the agreement terminated as of June 14, 2020.

After a series of monthly extensions Mr.

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

As described in more detail below, on June 5,

2021, the Company entered into a new three year employment agreement with Mr.

Phipps (the “2021 Phipps Employment Agreement”)

that was effective as of June 2, 2021 and that replaced his existing employment agreement.

The 2021 Phipps Employment Agreement set Mr.

Phipps’ annual base compensation at $350,000.

On June 5, 2021, the Company

to enter into a new three-year employment agreement with Mr.

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

as the 2021 Phipps Employment Agreement).

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

Phipps will serve as the serve

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

The term will be automatically extended for additional

one-year terms thereafter unless terminated by the Company or Mr.

Phipps by written notice.

Phipps’ annual base compensation

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

during its term.

In addition, Mr.

Phipps will be entitled to receive an annual cash bonus if the Company meets or exceeds criteria adopted

by the Compensation Committee of the Board of Directors.

Phipps is also entitled to participate in any other executive compensation

plans adopted by the Board of Directors and is eligible for such grants of awards under stock option or other equity incentive plans

as the Compensation Committee of the Company may from time to time determine (the “Share Awards”).

Share Awards will be subject

to the applicable Plan terms and conditions, provided, however, that Share Awards will be subject to any additional terms and conditions

as are provided therein or in any award certificate(s), which shall supersede any conflicting provisions governing Share Awards provided

under the equity incentive plan.

The Company is required to pay or to reimburse Mr.

Phipps for all reasonable out-of-pocket expenses

actually incurred or paid by Mr.

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

be entitled to participate in such pension, profit sharing, group insurance, hospitalization, and group health and benefit plans and

all other benefits and plans, including perquisites, if any, as the Company provides to its senior employees.

The 2021 Phipps Agreement

may be terminated based on death or disability of Mr.

Phipps, for cause or without good reason, for cause or with good reason, and as

a result of the change of control of the Company.

The 2021 Phipps Agreement also contains certain provisions that are customary for agreements

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

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

Phipps’ compensation to include

a car allowance of $1,000 a month and (ii) clarify Mr.

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

of Global Operations.

Employment Agreements

May Employment Agreement

On May 23, 2021, the Company

entered into a three (3) year Employment Agreement (the “May Agreement”) with Mr.

Fernandez to serve as Chairman of the Board.

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

Under the terms of May Agreement, Mr.

Fernandez’s employment

commenced on May 28, 2021.

As compensation for services under the May Agreement, Mr.

Fernandez was to receive, in monthly installments

during the term, the sum of $12,000 per month.

Fernandez was also be entitled to such cash bonus opportunity and equity compensation

arrangements as the Compensation Committee may determine following the effectiveness of this registration statement.

The May Agreement

also provided for the Company to reimburse Mr.

Fernandez for any and all premium payments made by him to obtain and continue in full

force and effect throughout the entire period of employment for personal catastrophe and disability insurance coverages.

Such insurance

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

Fernandez’s Base Salary per annum.

In addition, Mr.

Fernandez was entitled to participate in such pension, profit sharing, group insurance, hospitalization, and group health and benefit

plans and all other benefits and plans, including perquisites, if any, as the Company provides to its senior executives.

Under the May

Agreement, the Company was also obligated to reimburse Mr.

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

Fernandez’s business

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

Fernandez, whether in connection with Mr.

Fernandez’s association with the Company or otherwise.

In connection to the June

Offering, which is described above, the Company granted Mr.

Fernandez an award of restricted stock with a grant date fair value equal

to $3,000,000 determined at the per unit offering price of $5.00 per unit (the “RSA”), which RSA will vest 1/3 at each of

the three anniversaries of the grant date.

Notwithstanding the vesting schedule, full vesting will occur upon a Change in Control, as

that term is defined in the RSA.

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

the securities granted to Employee pursuant to the RSA.

June Employment Agreement

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

Fernandez, with

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

The June Agreement replaced “the May Agreement”.

Under the June Agreement, Mr.

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

The June Agreement

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

Fernandez by written notice.

Fernandez’s annual base compensation under the June Agreement is $350,000 per year.

The Company may increase (but not

decrease) his compensation during the June Agreement’s term.

In addition, Mr.

Fernandez is entitled to receive an annual cash

bonus if the Company meets or exceeds criteria adopted by the Compensation Committee of the Board.

Fernandez is also entitled to

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

Awards will be subject to the applicable Plan terms and conditions, provided, however, that Share Awards will be subject to any

additional terms and conditions as are provided therein or in any award certificate(s), which will supersede any conflicting

provisions governing Share Awards provided under the equity incentive plan.

The Company is required to pay or to reimburse Mr.

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

Fernandez in the course of his employment,

consistent with the Company’s policy.

Fernandez will also be entitled to participate in such pension, profit sharing, group insurance, hospitalization, and group health and

benefit plans and all other benefits and plans, including perquisites, if any, as the Company provides to its senior employees.

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

Fernandez, for cause or without good reason, for cause or with good reason,

as a result of the change of control of the Company and at the option of Mr.

Fernandez with or without cause.

The June Agreement also

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

covenants, indemnification provisions, etc.

Company will also reimburse Mr.

Fernandez for any and all premium payments made by him to obtain and continue personal catastrophe and

disability insurance coverages for himself, which policy will have policy limits not to exceed one hundred percent (100%) of his base

salary per annum at any given time.

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

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

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

The Company will also pay

for any and all fees and costs incurred by Mr.

Fernandez in connection with professional services provided to him, not to exceed $10,000

per year, including, without limitation, services provided to the Company by attorneys, accountants, financial planners and the like,

regardless of whether or not such services are provided to Mr.

Fernandez in connection with his employment with the Company.

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

received an award of restricted stock with a grant date fair value equal to $3,000,000 determined at the per unit offering price in the

June Offering ($5 per Unit) (the “RSA”), which RSA will vest 1/3 at each of the three anniversaries of the grant date.

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

Notwithstanding the vesting schedule, full vesting

will occur upon a Change in Control, as that term is defined in the Restricted Stock Agreement pursuant to which the RSA was made (the

“May Restricted Stock Agreement”).

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

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

Fernandez’s employment is terminated for any reason at any time by the Company prior to the full vesting of the RSA without

“Cause” (as that term is defined in the June Agreement), the RSA will vest and Mr.

Fernandez will receive all right, title

and interest in the balance of the securities granted to him in the RSA.

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

Fernandez is employed by the Company, he may nominate two directors to the Company’s

Board of Directors.

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

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

Fernandez’s compensation by (i) providing

for medical plan coverage for Mr.

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

Employment Agreement

August 24, 2021, Douglas S.

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

The appointment was made on the approval and recommendation of the Nominating

Committee of the Board.

Ellenoff was not appointed to any committees of the Board.

connection with Mr.

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

and the Company entered into a three year Employment Agreement, dated August 24, 2021, which is also referred to herein as the

“Ellenoff Agreement”., Under the Ellenoff Agreement, which sets forth the terms of his employment, including with

regard to compensation.

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

the terms of the Ellenoff Employment Agreement, Mr.

Ellenoff will receive, in lieu of cash compensation:

(i) a restricted stock

award of 100,000 shares of Common Stock of the Company, 40,000 of which will be issued within 5 business days of the execution of the

Ellenoff Employment Agreement and vest immediately, and the remaining 60,000 of which will be issued and vest at the rate of 20,000

shares at the end of each of the next three annual anniversaries of his employment, provided that Mr.

Ellenoff serves on the Board at

any time during such year;

and (ii) options to purchase a total of 1,500,000 shares of the Corporation’s Common Stock, 300,000

of which will issued within 5 business days of the execution of the Ellenoff Employment Agreement and vest immediately, 150,000

of which will vest on each of the next three annual anniversaries of the commencement of his employment, and the remaining 750,000 of

which will vest at the rate of 250,000 per year on each of the first three anniversaries of the commencement of his employment if during

each such year Mr.

Ellenoff introduces the Company to twelve (12) or more potential Business Transactions (as defined in the Ellenoff

Employment Agreement and which transactions need not be consummated);

provided that the Company’s Chief Executive Officer

may, in his sole discretion, waive the vesting requirement in any given year.

Such options have an exercise price of $5.35 per share

and will terminate 5 years after they vest.

These equity awards to Mr.

Ellenoff were material to induce Mr.

Ellenoff to enter into the

Ellenoff Employment Agreement and were issued outside of a shareholder approved stock or option plan pursuant to the Nasdaq “inducement

grant” exception (Nasdaq Listing Rule 5635(c)(4)).

incentive plans are described below under the heading “ Incentive Plans .”

Equity Awards at 2021 Fiscal Year-End

table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive

officer as of December 31, 2020.

The table below sets forth certain information concerning

our outstanding equity awards for each named executive officer as of December 31, 2021.

The market values of the Common Stock reported

in this table are calculated based on the closing market price of the Common Stock on Nasdaq on December 31, 2021, which was $3.24

Equity Awards At Fiscal Year-End

1 unchanged sentence

of Securities Underlying Unexercised Options (#) Unexercisable

Incentive Plan Awards:

Number of Securities Underlying Unexercised Unearned Options (#)

7 unchanged sentences

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

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

Director Compensation

Douglas Ellenoff

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

Incentive Plan

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

The purpose of the 2018 Plan is

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

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

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

An award may also be granted to any consultant, agent, advisor

or independent contractor for bona fide services rendered to the Company or any Related Company (as defined in the 2018 Plan) that;

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

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

The 2018 Plan is administered by the Board its Compensation

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

The 2018 Plan provides that up to

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

Subject to earlier termination in accordance with the terms of the 2018 Plan and the instrument evidencing the option, the maximum term

of an incentive stock option shall not exceed ten years, and in the case of an incentive stock option granted to a Ten Percent Stockholder

(as defined in the 2018 Plan), shall not exceed five years.

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

a plan participant’s Termination of Service (as defined in the 2018 Plan) shall expire on such date.

In the event of a Change in

Control (as defined in the 2018 Plan);

all outstanding awards, other than performance shares and performance units, shall become fully

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

prior to the Change in Control and shall terminate at the effective time of the Change in Control;

provided, however, that with respect

to a Change in Control that is a Company Transaction (as defined in the 2018 Plan), such awards shall become fully and immediately exercisable,

and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, only if and to the extent such awards are

not converted, assumed or replaced by the Successor Company (as defined in the 2018 Plan.

and Restated 2020 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”) in order to provide a means for the Company to continue to attract, motivate and retain management, key employees, directors

and consultants.

On December 31, 2020, the Company’s Board of Directors approved and adopted an amendment that increased the number

of shares available for issuance under the 2020 Plan from 450,000 shares to 800,000 shares of the Company’s common stock.

10, 2021, the Company’s Board of Directors further amended the 2020 Plan and adopted and approved an Amended and Restated 2020

Equity Incentive Plan (the “A&R 2020 Plan”), in order to, among other things:

(i) clarify that the exercise price of

stock options will be set at “Fair Market Value,” and (ii) make conforming revision to reflect the 1-for-5 reverse split

that was effective on May 28, 2021.

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

Company’s 2021 Annual Meeting of Stockholders.

A&R 2020 Plan provides for discretionary awards of, among others, stock options, stock awards, stock unit awards and stock appreciation

rights to participants.

Each award made under the A&R 2020 Plan will be evidenced by a written award agreement specifying the terms

and conditions of the award as determined by the Committee in its sole discretion, consistent with the terms of the A&R 2020 Plan.

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

A&R 2020 Plan is administered by the “Committee” which is defined in the A&R 2020 Plan as the Compensation Committee

of the Board or such other committee as may be designated by the Board from time to time to administer the Plan, or, if no such committee

has been designated at the time of any grants, it shall mean the Board.

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

Shares issuable under the A&R 2020 Plan

may be authorized but unissued shares or treasury shares.

If there is a lapse, forfeiture, expiration, termination or cancellation of

any award made under the A&R 2020 Plan for any reason, the shares subject to the award will again be available for issuance.

shares subject to an award that are delivered to us by a participant, or withheld by us on behalf of a participant, as payment for an

award or payment of withholding taxes due in connection with an award will not again be available for issuance, and all such shares will

count toward the number of shares issued under the A&R 2020 Plan.

The number of common shares issuable under the A&R 2020 Plan

is subject to adjustment, in the event of any reorganization, recapitalization, stock split, stock distribution, merger, consolidation,

split-up, spin-off, combination, subdivision, consolidation or exchange of shares, any change in the capital structure of the company

or any similar corporate transaction.

In each case, the Committee has the discretion to make adjustments it deems necessary to preserve

the intended benefits under the A&R 2020 Plan.

No award granted under the A&R 2020 Plan may be transferred, except by will, the

laws of descent and distribution.

maximum number of shares subject to Awards granted under the A&R 2020 Plan or otherwise during any one calendar year to any Director

for service on the Board (other than to Mr.

Phipps and the Company’s CEO and President, if serving on the Board, to whom no annual

limit is applicable), taken together with any cash fees paid by the Company to such Director during such calendar year for service on

the Board, will not exceed $100,000 in total value (calculating the value of any such Awards based on the grant date fair value or such

value as determined by the Board, at its discretion, of such Awards for financial reporting purposes).

Committee may amend any award agreement at any time, provided that no amendment may adversely affect the right of any participant under

any agreement in any material way without the written consent of the participant, unless such amendment is required by applicable law,

regulation or stock exchange rule.

The Board may terminate, suspend or amend the A&R 2020 Plan, in whole or in part, from time to

time, without the approval of the shareholders, unless such approval is required by applicable law, regulation or stock exchange rule,

and provided that no amendment may adversely affect the right of any participant under any outstanding award in any material way without

the written consent of the participant, unless such amendment is required by applicable law, regulation or rule of any stock exchange

on which the shares are listed.

Notwithstanding the foregoing, neither the A&R 2020 Plan nor any outstanding award agreement can

be amended in a way that results in the repricing of a stock option.

Repricing is broadly defined to include reducing the exercise price

of a stock option or cancelling a stock option in exchange for cash, other stock options with a lower exercise price or other stock awards.

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

Incentive Award Plan

Company’s Board of Directors approved and adopted the 2021 Incentive Award Plan (“2021 Plan”), subject to stockholder

approval, on August 10, 2021.

The 2021 Plan was approved by the Company’s stockholders on December 16, 2021, at the Company’s

2021 Annual Meeting of Stockholders.

purpose of the 2021 Plan is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected

to make) important contributions to the Company and its subsidiaries by providing these individuals with equity ownership opportunities.

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

number of shares initially available for issuance will be increased on January 1 of each calendar year beginning in 2022 and ending in

2031, by an amount equal to the lesser (A) an amount such that the resulting sum (the new “Overall Share Limit”) is equal

to 12% of the aggregate number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and

(B) such smaller number of shares of Common Stock as is determined by the Board.

Shares issued under the 2021 Plan may be authorized

but unissued shares, shares purchased in the open market or treasury shares.

If an award under the 2021 Plan expires, lapses or is terminated,

exchanged for cash, surrendered to an exchange program, repurchased, cancelled without having been fully exercised or forfeited, any

shares subject to such award will, as applicable, become or again be available for new grants under the 2021 Plan.

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

As of October

22, 2021, eighteen individuals are eligible to receive awards under the 2021 Plan.

2021 Plan is generally administered by the Board, which may delegate its duties and responsibilities to committees of Board and or officers

of the Company (referred to collectively as the “plan administrator”).

The plan administrator will have the authority to

make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the 2021

Plan, subject to its express terms and conditions.

The plan administrator will also set the terms and conditions of all awards under

the 2021 Plan, including any vesting and vesting acceleration conditions.

The plan administrator may also institute and determine the

terms and conditions of an “exchange program,” which could provide for the surrender or cancellation, transfer, or reduction

or increase of exercise price, of outstanding awards, subject to the limitations provided for in the Incentive Award Plan.

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

restricted stock;

dividend equivalents;

restricted stock units, or RSUs;

stock appreciation rights, or SARs;

and other stock or cash-based

All awards under the 2021 Plan will be set forth in award agreements, which will detail the terms and conditions of the awards,

including any applicable vesting and payment terms and post-termination exercise limitations.

Stock or Cash Based Awards may be granted to participants, including awards entitling participants to receive Shares to be delivered

in the future and including annual or other periodic or long-term cash bonus awards (whether based on specified performance criteria

or otherwise), in each case subject to any conditions and limitations in the 2021 Plan.

The plan administrator will determine the terms

and conditions of other stock or cash-based awards.

awards include any of the foregoing awards that are granted subject to vesting and/or payment based on the attainment of specified performance

goals or other criteria the plan administrator may determine, which may or may not be objectively determinable.

Performance criteria

upon which performance goals are established by the plan administrator.

connection with certain transactions and events affecting the Company’s Common Stock, including a change in control (as defined

in the 2021 Plan), or change in any applicable laws or accounting principles, the plan administrator has broad discretion to take action

under the 2021 Plan to prevent the dilution or enlargement of intended benefits, facilitate such transaction or event, or give effect

to such change in applicable laws or accounting principles.

This includes canceling awards in exchange for either an amount in cash or

other property with a value equal to the amount that would have been obtained upon exercise or settlement of the vested portion of such

award or realization of the participant’s rights under the vested portion of such award, accelerating the vesting of awards, providing

for the assumption or substitution of awards by a successor entity, adjusting the number and type of shares available, replacing awards

with other rights or property and/or terminating awards under the 2021 Plan.

Potential Payments Upon Termination or Change-in-Control

In the event of a termination

Fernandez’s or Mr.

Phipps’ (the “Subject Employees”) employment as a result of his death or Total

Disability (as defined in the respective employment agreement) the Subject Employee or his estate or beneficiaries, as applicable, will

be entitled to the following severance benefits:

(i) continued provision for a period of twelve (12) months following the Subject Employee’s

death or Total Disability of benefits under the Company’s benefit plans extended by the Company to its senior employees;

payment on a pro-rated basis of any bonus or other payments earned prior to the date of termination in connection with any bonus plan

to which the Subject Employee was a participant as of the date of death or Total Disability.

In the event of a termination

of a Subject Employee’s employment due to the expiration of the term of the respective employment agreement, and where the Company

offered to renew the term of employment and the Subject Employee chooses not to continue in the employ of the Company, the Subject Employee

will not be entitled to any severance benefits.

Upon termination of employment

by the Subject Employee for “good reason” (as defined in the respective employment agreement) or if the Company tenders a

non-renewal notice to the Subject Employee without “Cause” (as defined in the respective employment agreement), then the

Subject Employee will be entitled to the following severance benefits:

(i) a cash payment, based on the current scale of the Subject

Employee’s base salary, equal to six months of base salary;

(ii) continued provision for a period of twelve (12) months after the

date of termination of the benefits under the Company’s benefit plans extended by the Company to its senior employees;

(iii) payment

on a pro-rated basis of any bonus or other payments earned in connection with any bonus plan to which the Subject Employee was a participant

as of the date of the Subject Employee’s termination of employment;

and (iv) any options or restricted stock will be immediately

vested upon termination of Subject Employee’s employment.

Upon termination of the Subject

Employee’s employment at the Subject Employee’s option (without good reason) or by the Company for “Cause,” then

the Subject Employee will be entitled to the following benefits:

(i) continued provision, for a period of one (1) month after the date

of the Subject Employee’s termination of employment, of benefits under the Company’s benefit plans extended to the Employee

at the time of termination and (ii) any conversion rights available under the Company’s benefit plans and as otherwise provided

by law, including the Comprehensive Omnibus Budget Reconciliation Act.

In addition, notwithstanding

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

Fernandez’s RSA will occur upon a Change

in Control, as that term is defined in the May Restricted Stock Agreement pursuant to which the RSA was made.

employment is terminated for any reason at any time by the Company prior to the full vesting of the RSA without “Cause” (as

that term is defined in the June Agreement), the RSA will vest and Mr.

Fernandez will receive all right, title and interest in the balance

of the securities granted to him in the RSA.

In the event of a termination

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

the expiration of the initial term of the Ellenoff Employment Agreement, Mr.

Ellenoff’s resignation for any reason or no reason

(upon thirty (30) days prior written notice), or for “Cause” (as defined in the Ellenoff Employment Agreement);

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

Ellenoff or his estate or beneficiaries,

as applicable, will be entitled to receive any RSAs and options earned and/or vested through the such date, but all other RSAs and options

shall immediately terminate.

Upon termination of Mr.

Ellenoff’s employment (as defined in the Ellenoff Employment Agreement), in

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

Ellenoff will be entitled to receive

any RSAs and options provided for under the Ellenoff Employment Agreement;

any RSAs and Options that previously had not been vested will

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

will be promptly issued by the Company.

table below summarizes all compensation of our directors for our last completed fiscal year.

Only non-employee Directors received compensation

for service on the Board of Directors.

Earned or Paid in Cash ($)

Awards ($) (2)

Incentive Plan Compensation ($)

2 unchanged sentences

Other Compensation ($)

are included in Summary Compensation Table.

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

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 3,492,000 have been granted, allowing for an available balance of 508,000 as of

Carpenter (4)

paid to Charles M.

Fernandez, David Phipps and Douglas S.

Ellenoff, is set in Summary Compensation Table.

shown in the “Stock Awards” and “Option Awards” column reflect the aggregate grant date fair value calculated

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

addition to the stock award noted in the table above, at December 31, 2021, Mr.

Delgado held (i) 11,046 fully vested options, exercisable

into common shares, and (ii) 10,000 unvested restricted stock award, which will vest on the one year anniversary of its issuance,

December 16, 2022.

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

of our executive officers serves as a member of the Board of Directors or compensation committee of any other entity that has

one or more of its executive officers serving as a member of our Board of Directors.

addition to the restricted stock award noted in the table above, at December 31, 2021, the director has a 10,000 unvested restricted

stock award, which will vest on the one year anniversary of its issuance, December 16, 2022.

Director Compensation

November 18, 2021, our Board, on the recommendation of the Compensation Committee, approved the director compensation packages for the

2022 fiscal year.

The 2022 director compensation packages consists of a cash retainer of $48,000 for each non-employee Director, plus

an equity award of 20,000 shares of restricted stock to each non-employee Director (“2022 Equity Awards”).

Half of each 2022

Equity Award will be issued and vest on day of grant and the remaining half of the 2022 Equity Awards will be issued and vest on the

first anniversary of the grant date.

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

OWNERSHIP OF CERTAIN

OWNERS AND MANAGEMENT

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

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 9, 2021 upon the

exercise of options, warrants or other convertible securities.

Each beneficial owner’s percentage ownership is determined

by assuming that convertible securities that are held by that beneficial owner, but not those held by any other person, and which

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

The following tables sets forth,

as of March 28, 2022, the number of and percent of the Company’s common stock beneficially owned by:

(1) each of our directors;

(2) each of our named executive officers;

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

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 28, 2022, upon the exercise

of options, warrants or other convertible securities.

Each beneficial owner’s percentage ownership is determined by assuming that

convertible securities that are held by that beneficial owner, but not those held by any other person, and which are exercisable within

60 days of March 28, 2022, have been exercised and converted.

and Address of Beneficial Owner (2)

4 unchanged sentences

Stockholders :

Chestnut Realty LLC

Don Setina Family LP

Consulting LLC

P B Capital B.V.

Stockholders as a Group (2 persons)

* Indicates beneficial ownership of less than

1% of the outstanding common stock.

‡ Named Executive

person is deemed to be the beneficial owner of securities that can be acquired by him within 60 days from March 28, 2022, upon the

exercise of options, warrants or other convertible securities.

Percentage is based on 9,293,096 shares of common stock outstanding

as of March 28, 2022.

otherwise indicated in the footnotes, the address of the beneficial owners is c/o NextPlat Corp, 3250 Mary St., Suite 410, Coconut

Grove, FL 33133.

(i) 1,549,453 shares of common stock, and (ii) 37,500 shares of common stock issuable upon exercise of options and (iii) 600,000

shares of common stock issuable upon the exercise of warrants.

Does not include (i) a 600,000 share stock award granted on May 28,

2021, that vest in three equal tranches on the first, second and third-year anniversaries of the grant and which are held indirectly

through eApeiron Partners, LLC, of which Mr.

Fernandez is owner and manager, (ii) 137,500 shares stock award granted

on December 16, 2021, that vests in on the first year anniversary of the grant and (iii) 37,500 shares of common stock issuable upon

exercise of options, granted on December 16, 2021, that vests on the first-year anniversary of the grant.

(i) 393,288 shares of common stock, and (ii) 301,333 shares of common stock issuable upon exercise of options.

Represents (i) 65,000 shares of common stock held directly

by Douglas Ellenoff and 46,297 shared held indirectly through Sabrina Allan and (ii) options to purchase 300,000 shares of common

stock that are currently exercisable.

Douglas Ellenoff may be deemed to share voting and investment power over the shares held Sabrina

Does not include a (i) 60,000 shares of a restricted stock award granted on August 24, 2021, that vests in three equal tranches

on the first, second and third year anniversaries of the grant, (ii) 1,200,000 shares of common stock issuable upon exercise of options,

granted on August 24, 2021, pursuant to the Ellenoff Employment Agreement (described above), that vests in six tranches on the first,

second and third year anniversaries of the grant date, subject to satisfaction of certain conditions.

(i) 14,360 shares of common stock, and (ii) 11,046 shares of common stock issuable upon exercise of options.

Does not include

a 10,000 share stock award, granted on December 16, 2021, that vests on the first year anniversary of the grant.

(i) 25,433 shares of common stock.

Does not include a 10,000 share stock award, granted on December 16, 2021, that vests on the first

year anniversary of the grant.

(i) 10,000 shares of common stock.

Does not include a 10,000 share stock award, granted on December 16, 2021, that vests on the first

year anniversary of the grant.

Represents (i) 380,371 shares of common stock.

Does not include a 10,000 share stock award, granted on January 20, 2022, that vests on the first year anniversary of the grant.

addition to the Named Executive Officers, the Executive Officers as a Group includes:

Thomson, the Company’s Executive Vice President and Chief Financial Officer, and

beneficial owner of 65,433 shares;

Theresa Carlise, the Company’s Chief Accounting

Officer, Treasurer and Secretary, and beneficial owner of 32,864 shares;

and Andrew S.

the Company’s Senior Vice President of Operations, and beneficial owner of 35,000 shares.

(i) 450,000 shares of common stock, (ii) warrants to purchase 314,362 shares of common stock that are currently exercisable and 679,013

shares of common stock in the name of P B Capital B.V., of which Mr.

Palmer is a director and authorized signatory.

address of the beneficial owner is Vossiusstraat 44-M, Amsterdam, Netherlands 1071 AJ.

address of the beneficial owner is P B Capital B.V., PB Capital, Herengracht 458, 1017CA

Amsterdam, Netherlands.

Authorized for Issuance under Equity Compensation Plans

Compensation Plan Information

of December 31, 2021, we had issued and outstanding options to purchase 929,892 shares of common stock.

The weighted average exercise

price of the options was $3.53.

Options totalling 353,808 were issued outside of equity compensation plans.

weighted average exercise price of the options was $6.83.

The following table summarizes

information, as of December 31, 2021, relating to equity compensation plans of the Company under which the Company’s common stock

is authorized for issuance.

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

average exercise price of outstanding options, warrants and rights

of securities remaining available for future issuance under equity compensation plans

compensation plans approved by security holders:

Equity compensation plans

Incentive Plan

Equity compensation plans

2021 Incentive Plan

compensation plans not approved by security holders:

Incentive Plan

compensation issued pursuant to individual compensation arrangements

3,443,808 (4)

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.

29th Ave., Suite

700, Aventura, Florida 33180.

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

This amount includes 1,000 shares to be issued upon vesting of outstanding restricted stock

Rights to receive restricted stock have been excluded from the computation of the weighted-average

exercise price since these awards have no exercise price.

This amount includes 177,500 shares

to be issued upon vesting of outstanding restricted stock awards.

This amount includes 3,090,000 shares

to be issued upon vesting of outstanding restricted stock awards.

equity compensation made outside of a shareholder approved stock or option plan pursuant to the Nasdaq “inducement grant”

exception (Nasdaq Listing Rule 5635(c)(4)).

Certain Relationships and Related Transactions, and Director Independence

rules require us to disclose any transaction or currently proposed transaction in which the Company is a participant and in which

any related person has or will have a direct or indirect material interest involving the lesser of $120,000 or one percent (1%)

of the average of the Company’s total assets as of the end of last two completed fiscal years.

A related person is any executive

officer, director, nominee for director, or holder of 5% or more of the Company’s common stock, or an immediate family member

of any of those persons.

the years ended December 31, 2020 and 2019, Orbital Satcom purchased an aggregate of approximately $1,245,308 and $1,068,093 of

inventory from GTCL.

For the years ended December 31, 2020 and 2019, GTCL purchased an aggregate of approximately $25,728 and

$7,158 of inventory from Orbital Satcom.

rules require us to disclose any transaction or currently proposed transaction in which the Company is a participant and in which any

related person has or will have a direct or indirect material interest involving the lesser of $120,000 or one percent (1%) of the average

of the Company’s total assets as of the end of last two completed fiscal years.

A related person is any executive officer, director,

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

the years ended December 31, 2021 and 2020, Orbital Satcom purchased an aggregate of approximately $1,583,682 and $1,245,308 of inventory

For the years ended December 31, 2021 and 2020, GTC purchased an aggregate of approximately $62,380 and $25,728 of inventory

from Orbital Satcom.

For the year ended December 31, 2021, NextPlat advanced $2,100,000, pursuant to approval from the Company’s

board of directors for inventory.

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

to establishing the Audit Committee in March 2021, the Board at large was 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.

Upon establishing the Audit Committee in March 2021, the Audit Committee was responsible for reviewing, approving

and overseeing any transaction between the Company and a related person.

The Audit Committee’s responsibility includes, but is

not limited to, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in

which we were or will be a participant and (a) the amount involved exceeds the lesser of $120,000 or one percent (1%) of the average

of the Company’s total assets as of the end of last two completed fiscal years, and (b) a related person had or will have a direct

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

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

rules of the Nasdaq Stock Market, or the Nasdaq Rules, require a majority of a listed company’s Board of Directors to be composed

of independent directors.

In addition, the Nasdaq Rules require that, subject to specified exceptions, each member of a listed company’s

audit, compensation and nominating and governance committees be independent.

Under the Nasdaq Rules, a director will only qualify as

an independent director if, in the opinion of our Board, that person does not have a relationship that would interfere with the exercise

of independent judgment in carrying out the responsibilities of a director.

The Nasdaq Rules also require that audit committee members

satisfy independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than

in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or

indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an

affiliated person of the listed company or any of its subsidiaries.

In considering the independence of compensation committee members,

the Nasdaq Rules require that our board of directors must consider additional factors relevant to the duties of a compensation committee

member, including the source of any compensation we pay to the director and any affiliations with our company.

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

Based upon information

requested from and provided by each director concerning his background, employment and affiliations, including family relationships,

our Board has determined that Hector Delgado, John Miller, Kendall Carpenter, Louis Cusimano and Rodney Barreto are independent, as defined

under the Nasdaq Rules, and that David Phipps, Douglas Ellenoff and Charles M.

Fernandez are not independent.

Principal Accounting Fees and Services

the fiscal years ending December 31, 2020 and 2019, RBSM LLP was the Company’s independent registered public accounting

following table sets forth fees billed to us by our independent registered public accounting firm during the fiscal years ended

December 31, 2020 and 2019.

Audit-related

Other Fees (2)

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

included in our quarterly reports and current reports.

other fees reflect fees for review of the Company’s registration statement on Form S-1 and amendments thereto.

the fiscal years ending December 31, 2021, and 2020, RBSM LLP was the Company’s independent registered public accounting firm.

following table sets forth fees billed to us by our independent registered public accounting firm during the fiscal years ended December

31, 2021, and 2020.

Audit Fees (1)

Audit-related Fees

All Other Fees (2)

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

in our quarterly reports and current reports.

other fees reflect fees for review of the Company’s registration statement on Form S-1 and amendments thereto.

Committee Pre-approval Policies and Procedures

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

However, the full board of directors currently performs the duties of

an audit committee.

The board of directors has certain policies and procedures in place requiring the pre-approval of audit and

non-audit services to be performed by our independent registered public accounting firm.

Such pre-approval can be given as part

of the board’s approval of the scope of the engagement of the independent public registered accounting firm or on an individual

The approved non-audit services must be disclosed in our periodic reports filed with the SEC.

All work performed by our

independent registered public accounting firm for us in 2020 and 2019 was pre-approved by the board of directors.

Audit Committee on an annual basis reviews audit and non-audit services performed by the independent auditors.

All audit and non-audit

services are pre-approved by the Audit Committee, which considers, among other things, the possible effect of the performance of such

services on the auditors’ independence.

Exhibits, Financial Statement Schedules.

1 unchanged sentence

See Index to Consolidated Financial Statements, which appears on page F-1 hereof.

The financial statements listed

in the accompanying Index to Consolidated Financial Statements are filed herewith in response to this Item.

The financial statements listed in

the accompanying Index to Consolidated Financial Statements are filed herewith in response to this Item.

Statements Schedules.

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,

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).

Certificate of Change to the Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.7 to the Company’s Current Report on Form 8-K filed with the SEC on May 28, 2021).

Certificate of Amendment of the Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 20, 2022).

and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC

on January 20, 2022).

of NextPlat Corp’s Securities Registered Under Section 12 of the Exchange Act.

Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1/A filed with the SEC on April 7, 2021).

Form of Warrant Agent Agreement (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1/A filed with the SEC on April 7, 2021).

Form of Underwriter’s Warrant (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1/A filed with the SEC on April 7, 2021).

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

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

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

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

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

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

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

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

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

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

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

Convertible Promissory Note by and between Orbital Tracking Corp.

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

(Incorporated by reference

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

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*

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Employment Agreement, dated June 2, 2021 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report filed

with the SEC on August 17, 2021).

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

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

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

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

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

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

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

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

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

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

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

Alibaba.com Transaction Services Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Current Report on Form 8-K filed with the SEC on July 13, 2021).

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

Amendment No.

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

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

Amendment No.

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

Amendment No.

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

Amendment No.

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

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

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

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

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

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

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

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

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

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

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

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

Amendment No.

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

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

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

Restricted Stock Award Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen.

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

Amendment No.

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

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

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

of Registration Rights Agreement dated as of December 31, 2021, by and among Orbsat Corp and the Investors (incorporated by reference

to Exhibit A of Exhibit 10.54 to this Annual Report on Form 10-K).

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

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

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

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

Amendment No.

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

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

Amendment No.

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

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

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

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

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

Fernandez (275,000 shares of restricted stock).

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

Fernandez (101,000 shares of restricted stock).

Restricted Stock Award Agreement, dated December 18, 2021, by and between Orbsat Corp and David Phipps.

Form of Restricted Stock Award Agreement between the Company and each of Paul R Thomson (10,000 shares) and Theresa Carlise (15,000 shares), entered into in December 2021.

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

Miller, entered into in December 2021.

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

Fernandez (75,000 shares), Paul R Thomson (10,000 shares) and Theresa Carlise (15,000 shares), entered into in December 2021.

Restricted Stock Award Agreement, dated December 20, 2021, by and between Orbsat Corp and Rodney Barreto.

Subsidiaries of NextPlat Corp

Consent of RBSM LLP

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

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

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

XBRL Instance Document

XBRL Taxonomy Schema Document

XBRL Taxonomy Calculation Document

XBRL Taxonomy Linkbase Document

XBRL Taxonomy Label Linkbase Document

XBRL Taxonomy Presentation Linkbase Document

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

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

A copy of any omitted schedule will be furnished supplementally

to the Securities and Exchange Commission upon request;

provided, however that the Company may request confidential treatment

pursuant to Rule 24b-2 of the Exchange Act for any schedule or exhibit so furnished.

A copy of any omitted schedule will be furnished supplementally to

the Securities and Exchange Commission upon request;

provided, however that the Company may request confidential treatment pursuant

to Rule 24b-2 of the Exchange Act for any schedule or exhibit so furnished.

Filed herewith.

1 unchanged sentence

Form 10-K Summary

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

March 31, 2022

Chief Executive Officer and Chairman

Executive Officer)

Thomas Seifert

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

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf

of the registrant and in the capacities and on the dates indicated.

Executive Officer and Chairman (Principal Executive Officer)

Thomas Seifert

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

NEXTPLAT CORP

Executive Chairman and Chief Executive Officer (Principal Executive Officer)

Chief Financial Officer, (Principal Financial Officer)

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the

registrant and in the capacities and on the dates indicated.

Executive Officer and Executive Chairman (Principal Executive Officer)

and Chief Executive Officer of Global Operations

Paul R Thomson

Vice President and Chief Financial Officer (Principal Financial Officer)

Theresa Carlise

Accounting Officer, Secretary and Treasurer (Principal Accounting Officer)

Vice President of Operations

Chairman and Chief Business Development Strategist

Hector Delgado

Louis Cusimano

Rodney Barreto

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

of Independent Registered Public Accounting Firm

Financial Statements

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

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

to Consolidated Financial Statements

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

Consolidated Financial Statements

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2021 and 2020

Statements of Stockholders’ Equity for the Years Ended December 31, 2021 and 2020

Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

1 unchanged sentence

Corp and Subsidiaries

known as Orbsat Corp)

on the Financial Statements

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.

have audited the accompanying consolidated balance sheets of NextPlat Corp & Subsidiaries (formerly known as Orbsat Corp) (the “Company”)

as of December 31, 2021 and 2020, 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, 2021, and the related notes and schedules (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, 2021 and 2020, and the consolidated results of its operations and its cash

flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in

the United States of America.

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.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but

not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

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.

did not identify any critical audit matters during the course of our audit for the year ended December 31, 2021.

have served as the Company’s auditor since 2014.

ID Number 587

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

BALANCE SHEETS

receivable, net

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

for income taxes

of discontinued operations

Accounts receivable, net

Unbilled revenue

VAT receivable

Prepaid expenses – current portion

Other current assets

Total Current Assets

Property and equipment, net

Intangible Assets, net

Prepaid expenses – long term portion

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

Term Liabilities:

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

payable Coronavirus –

lease liabilities –

Stockholders’

stock, $0.0001 par value;

Accounts payable and accrued expenses

Contract liabilities

Note payable – current portion

Note payable Coronavirus loans– current portion

Due to related party

Line of credit

Operating lease liabilities - current

Provision for income taxes

Stock subscription payable

Liabilities from discontinued operations

Total Current Liabilities

Long Term Liabilities:

Convertible debt, net of discount, unamortized $ 0 and $ 1,084,944

Notes payable Coronavirus – long term

Operating lease liabilities – long term

Total Liabilities

Stockholders’ Equity

Preferred stock, $ 0.0001 par value;

3,333,333 shares authorized

stock, $0.0001 par value;

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

Common stock, $ 0.0001

50,000,000 shares authorized, 7,053,146

shares issued and outstanding as of December 31, 2021, and 817,450

issued and outstanding at December 31, 2020, respectively

paid-in capital

other comprehensive loss

Stockholders’

Liabilities and Stockholders’

Additional paid-in capital

Accumulated deficit

( 21,986,215 )

( 13,878,553 )

Accumulated other comprehensive income (loss)

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

accompanying notes to consolidated financial statements.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

the Years Ended

general and administrative

wages and payroll taxes

and amortization

For the Years Ended

Cost of sales

Operating expenses:

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

and diluted net (loss) per share

accompanying notes to consolidated financial statements.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

STATEMENT OF STOCKHOLDERS’

THE TWO YEARS ENDED DECEMBER 31, 2020

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.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

STATEMENT OF STOCKHOLDERS’

THE TWO YEARS ENDED DECEMBER 31, 2020

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.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

STATEMENT OF STOCKHOLDERS’

THE TWO YEARS ENDED 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.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

STATEMENT OF STOCKHOLDERS’

THE TWO YEARS ENDED DECEMBER 31, 2020

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

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

( 6,622,333 )

( 2,033,880 )

Other (income) expense:

Interest earned

Interest expense

Foreign currency exchange rate variance

Gain on debt extinguishment

Other expenses

Total other expense

Loss before provision for income taxes

( 8,107,662 )

( 2,763,375 )

Provision for income taxes

( 8,107,662 )

( 2,763,375 )

Comprehensive loss:

( 8,107,662 )

( 2,763,375 )

Foreign currency translation adjustments

Comprehensive loss

$ ( 8,061,594 )

$ ( 2,804,055 )

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

Weighted number of common shares outstanding – basic & diluted

Basic and diluted net (loss) per share

accompanying notes to consolidated financial statements.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

STATEMENT OF STOCKHOLDERS’

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE TWO YEARS ENDED DECEMBER 31, 2021

January 1, 2019

$0.0001 Par Value

Balance, January 1, 2020

$ ( 11,115,178 )

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

Issuance of common stock from convertible debt

Beneficial conversion feature of convertible debt

Issuance of common stock for options exercised

Stock-based compensation in connection with options granted

Stock-based compensation in connection with restricted stock awards

Issuance common stock from exercise of warrant

Issuance common stock from exercise of warrant, shares

Issuance of common stock related to offering

Issuance of common stock related to offering, shares

Issuance of common for over-allotment

Issuance of common for over-allotment, shares

Issuance of warrants for over-allotment

Comprehensive loss

( 2,763,375 )

common stock from convertible debt

conversion feature of convertible debt

common stock for options exercised

of options granted

based compensation

Comprehensive

December 31, 2020

Balance, December 31, 2020

$ ( 13,878,553 )

Issuance of common stock from convertible debt

Beneficial conversion feature of convertible debt

Issuance of common stock for options exercised

Issuance of common stock from exercise of warrant

Issuance of common stock related to offering

Issuance of common for over-allotment

Issuance of warrants for over-allotment

Stock-based compensation in connection with options granted

Stock-based compensation in connection with restricted stock awards

Comprehensive gain

( 8,107,662 )

Balance, December 31, 2021

$ ( 21,986,215 )

accompanying notes to consolidated financial statements.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

STATEMENT OF STOCKHOLDERS’

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE TWO YEARS ENDED DECEMBER 31, 2021

Comprehensive

Stockholders’

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

Stockholders’

Income (Loss)

Balance January 1, 2020

Issuance of common stock from convertible debt

Beneficial conversion feature of convertible debt

Issuance of common stock for options exercised

Stock-based compensation in connection with options granted

Stock-based compensation in connection with

restricted stock awards

Comprehensive loss

( 2,763,375 )

Balance, December 31, 2020

Issuance of common stock from convertible debt

Beneficial conversion feature of convertible debt

Issuance of common stock for options exercised

Issuance of common stock from exercise of warrant

Issuance of common stock related to June offering

Issuance of common for over-allotment

Issuance of warrants for over-allotment

Stock-based compensation in connection with options granted

Stock-based compensation in connection with

restricted stock awards

Comprehensive gain

( 8,107,662 )

Balance, December 31, 2021

accompanying notes to consolidated financial statements

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

STATEMENT OF CASH FLOWS

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

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

STATEMENTS OF CASH FLOWS

For the Years Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 8,107,662 )

$ ( 2,763,375 )

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

Depreciation expense

Amortization of intangible asset

Amortization of right of use asset

Amortization of debt discount, net

Stock-based compensation in connection with restricted stock awards

Stock-based compensation in connection with options granted

Gain on debt extinguishment

Changes in operating assets and liabilities:

Accounts receivable

Unbilled revenue

Prepaid expense

VAT receivable

Other current assets

Operating lease liabilities

Accounts payable and accrued liabilities

Provision for income taxes

Contract liabilities

Net cash used in operating activities

( 4,092,090 )

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 (repayments to) note payable Coronavirus loans

Proceeds from exercise of options

Proceeds from common stock offering

Proceeds from common over-allotment

Proceeds from warrants over-allotment

Proceeds from exercise of warrant

Proceeds from December offering

Proceeds from (repayments to) convertible notes payable

(Repayments to) proceeds from 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 FINANCING AND INVESTING ACTIVITIES DURING THE YEAR

Beneficial conversion feature on convertible debt

Issuance common stock from convertible debt

accompanying notes to consolidated financial statements

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

and Description of Business

Corp (the “Company”) was formerly Great West Resources, Inc., a Nevada corporation.

The Company is a provider of satellite-based

hardware, airtime and related services both in the United States and internationally.

The Company’s principal focus is on

growing the Company’s existing satellite-based hardware, airtime and related services business line and developing the Company’s

own tracking devices for use by retail customers worldwide.

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

NextPlat currently generates

its revenues from the provision of a comprehensive array of communication services and related equipment sales.

In recent years the Company

has successfully leveraged e-commerce solutions to establish a truly global reach.

We intend to achieve our mission and further grow

our business by pursuing the following strategies:

increased product offerings, marketplace expansion, government sourced revenue, product

innovation, future acquisitions and E-Commerce Platforms.

Company was originally incorporated in 1997 in Florida.

On April 21, 2010, the Company merged with and into a wholly-owned subsidiary

for the purpose of changing its state of incorporation to Delaware, effecting a 2:1 forward split of its common stock, and changing

its name to EClips Media Technologies, Inc.

for the purpose of changing its state of incorporation to Delaware, effecting a 2:1 forward split of its common stock, and changing its

name to EClips Media Technologies, Inc.

On April 25, 2011, the Company changed its name to Silver Horn Mining Ltd.

to a merger with a wholly-owned subsidiary.

wholly-owned subsidiary, Orbital Satcom Corp.

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

March 28, 2014, the Company merged with and into a wholly-owned subsidiary of the Company (“Great West”) solely for

the purpose of changing its state of incorporation to Nevada from Delaware (the “Reincorporation”), effecting a 1:150

reverse split of its common stock, and changing its name to Great West Resources, Inc.

in connection with the plans to enter into

the business of potash mining and exploration.

During late 2014, the Company abandoned its efforts to enter the potash mining

and exploration business.

All references in the audited consolidated financial statements and notes thereto have been retroactively

restated to reflect the reverse stock split of 1:150.

the effective date of the Merger:

Each share of the Company’s Common Stock issued and outstanding immediately prior to the effective date changed and converted

into 1/150th fully paid and non-assessable shares of Great West Common Stock;

Each share of the Company’s Series A Preferred Stock issued and outstanding immediately prior to the effective date changed

and converted into 1/150th fully paid and non-assessable shares of the Great West Series A Preferred Stock;

Each share of the Company’s Series D Preferred Stock issued and outstanding immediately prior to the effective date changed

and converted into 1/150th fully paid and non-assessable shares of the Great West Series B Preferred Stock;

All options to purchase shares of the Company’s Common Stock issued and outstanding immediately prior to the effective date

changed and converted into equivalent options to purchase 1/150th of a share of Great West Common Stock at an exercise price of

$0.0001 per share;

All warrants to purchase shares of the Company’s Common Stock issued and outstanding immediately prior to the effective

date changed and converted into equivalent warrants to purchase 1/150th of a share of Great West Common Stock at 150 times the

exercise price of such converted warrants;

Each share of Great West Common Stock issued and outstanding immediately prior to the Effective Date were canceled and returned

to the status of authorized but unissued Great West Common Stock.

Telesat Communications Limited (“GTCL”) was formed under the laws of England and Wales in 2008.

On February 19, 2015,

the Company entered into a share exchange agreement with GTCL and all of the holders of the outstanding equity of GTCL pursuant

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

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

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

the Company with GTCL considered the accounting acquirer, and the financial statements of the accounting acquirer became the financial

statements of the registrant.

pursuant to a merger

with a wholly owned subsidiary.

Telesat Communications Limited (“GTC”) was formed under the laws of England and Wales in 2008.

On February 19, 2015, we entered

into a share exchange agreement with GTC and all of the holders of the outstanding equity of GTC pursuant to which GTC became a wholly

owned subsidiary of ours.

March 28, 2014, we merged with a newly-formed wholly-owned subsidiary of ours solely for the purpose of changing our state of incorporation

to Nevada from Delaware, effecting a 1:150 reverse split of our common stock , and changing our name to Great West Resources, Inc.

connection with the plans to enter into the business of potash mining and exploration.

During late 2014, we abandoned our efforts to

enter the potash business.

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

with GTC considered the accounting acquirer, and the financial statements of the accounting acquirer became the financial statements

of the registrant.

The completion of the Share Exchange resulted in a change of control.

The Share Exchange was accounted

for as a reverse acquisition and re-capitalization.

The GTCL shareholders obtained approximately 39% of voting control on the

date of Share Exchange.

GTCL was the acquirer for financial reporting purposes and the Company was the acquired company.

The consolidated

financial statements after the acquisition include the balance sheets of both companies at historical cost, the historical results

of GTCL and the results of the Company from the acquisition date.

All share and per share information in the accompanying consolidated

financial statements and footnotes has been retroactively restated to reflect the recapitalization.

See Note 13 - Stockholders

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.

The Share Exchange was accounted for as a reverse

acquisition and re-capitalization.

The GTC shareholders obtained approximately 39% of voting control on the date of Share Exchange.

was the acquirer for financial reporting purposes and the Company was the acquired company.

The consolidated financial statements after

the acquisition include the balance sheets of both companies at historical cost, the historical results of GTC and the results of the

Company from the acquisition date.

All share and per share information in the accompanying consolidated financial statements and footnotes

has been retroactively restated to reflect the recapitalization.

See Note 12 – Stockholders’ Equity.

Company’s former operations were developing and manufacturing products and services, which reduce fuel costs, save power

and energy and protect the environment.

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

private sectors.

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

prior periods have been restated in the Company’s consolidated financial statements and related footnotes to conform to

this presentation.

remaining liabilities for discontinued operations are presented in the consolidated balance sheets under the caption “Liabilities

of discontinued operation”

and relates to the discontinued operations of developing and manufacturing of energy saving and

fuel-efficient products and services.

Satcom Corp, a Nevada corporation was formed on November 14, 2014.

January 22, 2015, we changed our name to “Orbital Tracking Corp” from “Great West Resources, Inc.” pursuant to

a merger with a newly formed wholly owned subsidiary.

March 8, 2018, following the approval of a majority of our shareholders, we effected a reverse split of our common stock at a ratio of

On August 19, 2019, we effected a reverse split of our common stock at a ratio of 1 for 15 .

As a result of the reverse split,

our common stock now has the CUSIP number:

All share and per share information in the accompanying consolidated financial

statements and footnotes has been retroactively restated to reflect these reverse splits.

on August 19, 2019, we changed our name to “Orbsat Corp” from “Orbital Tracking Corp.” pursuant to a merger with

a newly formed wholly owned subsidiary.

March 24, 2021, the Company’s shareholders via majority shareholder consent authorized a stock

split not to exceed 1-for-5 reverse stock split .

A definitive Information Statement relating to the shareholder consent was filed with the SEC on March 13, 2021.

The Company’s

Board of Directors (the “Board”) subsequently approved the 1-for-5

reverse stock split .

The Company filed a Certificate

of Change to its Amended and Restated Articles of Incorporation to effect a reverse stock split of its issued and outstanding common

stock, at a ratio of 1-for-5 .

The effective time of the reverse stock split was 12:01 a.m.

ET on May 28, 2021.

The Company’s common stock began trading on a

split-adjusted basis commencing upon market open on May 28, 2021.

The common stock has been assigned a new CUSIP number, 68557F 209.

The warrants were assigned the CUSIP number, 68557F 118.

No fractional shares of common stock were issued as a result of the reverse

Stockholders of record who would otherwise be entitled to receive a fractional share received a whole share.

December 16, 2021, at the Annual Meeting of Stockholders (the “Annual Meeting”) of the Company the stockholders approved

certificate of amendment to the Company’s Amended and Restated Articles of Incorporation changing the Company’s name to NextPlat

The Name Change Amendment was filed on January 18, 2022, and t he Company’s

name change from Orbsat Corp to NextPlat Corp was effective as of January 21, 2022.

January 21, 2022, the trading symbol for the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”)

on the NASDAQ Capital Market will be “NXPL” and the trading symbol for the Company’s Warrants (the “Warrants”)

on the NASDAQ Capital Market will be “NXPLW.” The CUSIP number for our Common Stock (68557F209) and our Warrants (68557F118)

remain unchanged.

Prior to January 21, 2022, our common stock and warrants were traded on the Nasdaq Capital Market under the symbols

“OSAT” and “OSATW,” respectively

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Company’s former operations were developing and manufacturing products and services, which reduce fuel costs, save power and energy

and protect the environment.

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

December 2009, the Company discontinued these operations and disposed of certain of its subsidiaries, and prior periods have been restated

in the Company’s consolidated financial statements and related footnotes to conform to this presentation.

remaining liabilities for discontinued operations are presented in the consolidated balance sheets under the caption “Liabilities

from discontinued operation” and relates to the discontinued operations of developing and manufacturing of energy saving

and fuel-efficient products and services.

The carrying amounts of the major classes of these liabilities as of December 31, 2021, and

2020 are summarized as follows:

of discontinued operations

payables and accrued expenses

of discontinued operations

SUMMARY OF CARRYING AMOUNT OF MAJOR CLASSES OF LIABILITIES

December 31, 2021

December 31, 2020

Assets of discontinued operations

Accounts payables and accrued expenses

$ ( 112,397 )

Liabilities from discontinued operations

$ ( 112,397 )

of Presentation and Principles of Consolidation

consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States

of America (“US GAAP”).

The consolidated financial statements of the Company include the Company and its wholly-owned

subsidiaries, Orbital Satcom Corp.

and Global Telesat Communications Ltd.

All material intercompany balances and transactions

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

consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America

The consolidated financial statements of the Company include the Company and its wholly-owned subsidiaries,

Orbital Satcom Corp, (“Orbital Satcom”) and Global Telesat Communications Limited, (“GTC”).

All material intercompany

balances and transactions have been eliminated in consolidation.

an early-stage growth company, NextPlat’s ability to access capital is critical.

On June 2, 2021, through an upsized underwritten

public offering of 2,880,000

units at a price to the public of $ 5.00

per unit, the Company received gross proceeds

of $ 14,404,666 (the

“June Offering”).

See Note 12, Stockholders’ Equity, for more information

regarding the June Offering.

connection with closing of the June Offering, the Underwriter partially exercised its overallotment option and purchased an additional

432,000 warrants at $ 0.01 per warrant for additional gross proceeds to the Company of $ 4,320 .

On June 28, 2021, the Underwriter, upon

the exercise in full of the balance of its over-allotment option, purchased 432,000 additional shares of the common stock for additional

gross proceeds of $ 2,155,680 from the sale of the Shares.

of the date of this report, the Company’s existing cash resources and existing borrowing availability are sufficient to support

planned operations for the next 12 months.

As a result, management believes that the Company’s existing financial resources are

sufficient to continue operating activities for at least one year past the issuance date of the financial statements.

financial statements have been prepared by management in accordance with GAAP and this basis assumes that the Company will continue as

a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course

These financial statements do not include any adjustments that may result from the outcome of this uncertainty.

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.

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.

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.

TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION

AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

and Cash Equivalents

Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents.

The Company places its cash with a high credit quality financial institution.

The Company’s account at this institution

is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.

To reduce its risk associated with

the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in

which it holds deposits.

places its cash with a high credit quality financial institution.

The Company’s account at this institution is insured by the Federal

Deposit Insurance Corporation (“FDIC”) up to $ 250,000 .

All cash amounts in excess of $ 250,000 , $ 17,017,978 , are unsecured.

To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the

financial institution in which it holds deposits.

Receivable and Allowance for Doubtful Accounts

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

in its existing accounts receivable.

The Company periodically reviews its accounts receivable to determine whether an allowance

is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account

may be in doubt.

Account balances deemed to be uncollectible are offset against sales and relieved from accounts receivable, after

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

As of December 31, 2020, and

2019, there is an allowance for doubtful accounts of $15,596 and $3,187, respectively.

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

existing accounts receivable.

The Company periodically reviews its accounts receivable to determine whether an allowance is necessary

based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt.

balances deemed to be uncollectible are offset against sales and relieved from accounts receivable, after all means of collection have

been exhausted and the potential for recovery is considered remote.

As of December 31, 2021, and 2020, there is an allowance for doubtful

accounts of $ 0 and $ 15,596 , respectively.

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

The Company assesses the valuation

of its inventories and reduces the carrying value of those inventories that are obsolete or in excess of the Company’s forecasted

usage to their estimated net realizable value.

The Company estimates the net realizable value of such inventories based on analysis

and assumptions including, but not limited to, historical usage, expected future demand and market requirements.

A change to the

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

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

Prepaid expenses include prepayments in cash

for accounting fees, prepayments in equity instruments and license fees which are being amortized over the terms of their respective

agreements and product costs associated with deferred revenue.

The current portion consists of costs paid for future services

which will occur within a year.

The Company estimates the net realizable value of such inventories based on analysis and

assumptions including, but not limited to, historical usage, expected future demand and market requirements.

A change to the carrying

value of inventories is recorded to cost of goods sold.

expenses current and long term amounted to $ 97,068

and $ 49,867 ,

respectively for the year ended December 31, 2021, as compared to $ 1,784

at for the year ended December 31, 2020.

Prepaid expenses include prepayments in cash for accounting fees, prepayments in equity instruments, which are being amortized over the

terms of their respective agreements, as well as cost associated with certain contract liabilities.

The current portion consists of costs

paid for future services which will occur within a year.

Currency Translation

Company’s reporting currency is U.S.

The accounts of one of the Company’s subsidiaries, GTCL, is maintained

using the appropriate local currency, Great British Pound, as the functional currency.

All assets and liabilities are translated

Dollars at balance sheet date, shareholders’

equity is translated at historical rates and revenue and expense

accounts are translated at the average exchange rate for the year or the reporting period.

The translation adjustments are reported

as a separate component of stockholders’

equity, captioned as accumulated other comprehensive (loss) gain.

Transaction gains

and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency

are included in the statements of operations.

Company’s reporting currency is U.S.

The accounts of one of the Company’s subsidiaries, GTC, is maintained using

the appropriate local currency, Great British Pound, as the functional currency.

All assets and liabilities are translated into U.S.

Dollars at balance sheet date, shareholders’ equity is translated at historical rates and revenue and expense accounts are translated

at the average exchange rate for the year or the reporting period.

The translation adjustments are reported as a separate component of

stockholders’ equity, captioned as accumulated other comprehensive (loss) gain.

Transaction gains and losses arising from exchange

rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of operations.

relevant translation rates are as follows:

for the year ended December 31, 2021, closing rate at 1.353372 US$:

GBP, yearly average

rate at 1.286618 US$:

GBP, yearly average rate

at 1.375083 US$:

GBP, for the year ended December 31, 2020 closing rate at 1.3665 US$:

GBP, yearly average rate at 1.276933

GBP, yearly average rate at 1.286618 US$:

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recognition and Unearned Revenue

Company recognizes revenue from satellite services when earned, as services are rendered or delivered to customers.

sales revenue is recognized when the equipment is delivered to and accepted by the customer.

Only equipment sales are subject

Historically, the Company has not incurred significant expenses for warranties.

Equipment sales which have been prepaid,

before the goods are shipped are recorded as contract liabilities and once shipped is recognized as revenue.

The Company also

records as contract liabilities, certain annual plans for airtime, which are paid in advance.

Once airtime services are incurred,

they are recognized as revenue.

Unbilled revenue is recognized for airtime plans whereby the customer is invoiced for its data

usage the following month after services are incurred.

Company’s customers generally purchase a combination of our products and services as part of a multiple element arrangement.

The Company’s assessment of which revenue recognition guidance is appropriate to account for each element in an arrangement

can involve significant judgment.

Equipment sales revenue

is recognized when the equipment is delivered to and accepted by the customer.

Only equipment sales are subject to warranty.

Historically,

the Company has not incurred significant expenses for warranties.

Equipment sales which have been prepaid, before the goods are shipped

are recorded as contract liabilities and once shipped is recognized as revenue.

The Company also records as contract liabilities, certain

annual plans for airtime, which are paid in advance.

Once airtime services are incurred, they are recognized as revenue.

Unbilled revenue

is recognized for airtime plans whereby the customer is invoiced for its data usage the following month after services are incurred.

Company’s customers generally purchase a combination of our products and services as part of a multiple element arrangement.

Company’s assessment of which revenue recognition guidance is appropriate to account for each element in an arrangement can involve

significant judgment.

This assessment has a significant impact on the amount and timing of revenue recognition.

1 unchanged sentence

which we expect to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that the

Company determines are within the scope of ASC 606, we perform the following five steps:

To determine revenue recognition for arrangements that the Company

determines are within the scope of ASC 606, we perform the following five steps:

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

(ii) identify the performance obligations in the contract;

(ii) identify

the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction

price to the performance obligations in the contract;

(iv) allocate the transaction price to the performance

obligations in the contract;

and (v) recognize revenue when (or as) we satisfy a performance obligation.

The five-step model is applied to contracts when it is probable that we will collect the consideration we are entitled to in exchange

for the goods or services transferred to the customer.

At contract inception, once the contract is determined to be within the

scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations

and assess whether each promised good or service is distinct.

We then recognize revenue in the amount of the transaction price

that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The five-step model is applied

to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services transferred

to the customer.

At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services

promised within each contract and determine those that are performance obligations and assess whether each promised good or service is

We then recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation

when (or as) the performance obligation is satisfied.

accordance with ASU No.

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

Narrow-Scope Improvements and Practical

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

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

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.

Based on the terms and conditions

of the product arrangements, the Company believes that its products and services can be accounted for separately as its products

and services have value to the Company’s customers on a stand-alone basis.

When a transaction involves more than one product

or service, revenue is allocated to each deliverable based on its relative fair value;

otherwise, revenue is recognized as products

are delivered or as services are provided over the term of the customer contract.

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

At December 31, 2020, we had contract

liabilities of approximately $36,704.

Narrow-Scope Improvements and Practical Expedient ,

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

(2) permit an entity to exclude

amounts collected from customers for all sales (and other similar) taxes from the transaction price;

(3) specify that the measurement

date for noncash consideration is contract inception;

(4) provide a practical expedient that permits an entity to reflect the aggregate

effect of all modifications that occur before the beginning of the earliest period presented when identifying the satisfied and unsatisfied

performance obligations, determining the transaction price, and allocating the transaction price to the satisfied and unsatisfied performance

(5) clarify that a completed contract for purposes of transition is a contract for which all (or substantially all) of the

revenue was recognized under legacy GAAP before the date of initial application, and (6) clarify that an entity that retrospectively

applies the guidance in Topic 606 to each prior reporting period is not required to disclose the effect of the accounting change for

the period of adoption.

The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods

within those fiscal years.

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

Based on the terms and conditions of the product arrangements, the Company believes that its products and services can be accounted for

separately as its products and services have value to the Company’s customers on a stand-alone basis.

When a transaction involves

more than one product or service, revenue is allocated to each deliverable based on its relative fair value;

otherwise, revenue is recognized

as products are delivered or as services are provided over the term of the customer contract.

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

At December 31, 2021, we had contract liabilities

of approximately $ 36,765 .

At December 31, 2020, we had contract liabilities of approximately $ 36,704 .

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

of Product Sales and Services

of sales consists primarily of materials, airtime and overhead costs incurred internally and amounts incurred to contract manufacturers

to produce our products, airtime and other implementation costs incurred to install our products and train customer personnel,

and customer service and third-party original equipment manufacturer costs to provide continuing support to our customers.

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

Refer to revenue recognition

above as to what constitutes deferred revenue.

and handling costs are included as a component of costs of product sales in the Company’s consolidated statements of operations

to produce our products, airtime and other implementation costs incurred to install our products and train customer personnel, and customer

service and third-party original equipment manufacturer costs to provide continuing support to our customers.

There are certain costs

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

Refer to revenue recognition above as to what constitutes

deferred revenue.

and handling costs are included as a component of costs of product sales in the Company’s consolidated statements of operations

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

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

These assets are amortized over 10

Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are tested for impairment

whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable.

and other intangible assets

accordance with ASC 350-30-65, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable

intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

the Company considers to be important which could trigger an impairment review include the following:

underperformance relative to expected historical or projected future operating results;

changes in the manner of use of the acquired assets or the strategy for the overall business;

negative industry or economic trends.

the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of

the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows,

the Company records an impairment charge.

The Company measures any impairment based on a projected discounted cash flow method

using a discount rate determined by management to be commensurate with the risk inherent in the current business model.

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

recorded an impairment charge of $0 and $50,000, during the years ended December 31, 2020 and 2019, respectively.

These assets are amortized over 10 years.

Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are tested for impairment whenever events

or changes in circumstances indicate that the carrying amount may no longer be recoverable.

and Equipment

and equipment are carried at historical cost less accumulated depreciation.

Depreciation is based on the estimated service lives

of the depreciable assets and is calculated using the straight-line method.

Expenditures that increase the value or productive

capacity of assets are capitalized.

Fully depreciated assets are retained in the property and equipment, and accumulated depreciation

accounts until they are removed from service.

When property and equipment are retired, sold or otherwise disposed of, the asset’s

carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations.

Repairs and maintenance are expensed as incurred.

Depreciation is based on the estimated service lives of the

depreciable assets and is calculated using the straight-line method.

Expenditures that increase the value or productive capacity of assets

are capitalized.

Fully depreciated assets are retained in the property and equipment, and accumulated depreciation accounts until they

are removed from service.

When property and equipment are retired, sold or otherwise disposed of, the asset’s carrying amount and

related accumulated depreciation are removed from the accounts and any gain or loss is included in operations.

Repairs and maintenance

are expensed as incurred.

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

furniture and fixtures

SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT

Office furniture and fixtures

Computer equipment

Rental equipment

Website development

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

expense for the years ended December 31, 2021, and 2020 was $ 292,102 and $ 269,926 , respectively.

of Long-lived Assets

Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount

of the assets may not be fully recoverable, or at least annually.

The Company recognizes an impairment loss when the sum of expected

undiscounted future cash flows is less than the carrying amount of the asset.

The amount of impairment is measured as the difference

between the asset’s estimated fair value and its book value.

The Company did not consider it necessary to record any impairment

charges during the periods ended December 31, 2020 and December 31, 2019, respectively.

Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the

assets may not be fully recoverable, or at least annually.

The Company recognizes an impairment loss when the sum of expected undiscounted

future cash flows is less than the carrying amount of the asset.

The amount of impairment is measured as the difference between the asset’s

estimated fair value and its book value.

The Company did not consider it necessary to record any impairment charges during the periods

ended December 31, 2021 and December 31, 2020, respectively.

for Derivative Instruments

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

These derivatives, including embedded derivatives in the Company’s

structured borrowings, are separately valued and accounted for on the Company’s balance sheet.

Fair values for exchange

traded securities and derivatives are based on quoted market prices.

Where market prices are not readily available, fair values

are determined using market-based pricing models incorporating readily observable market data and requiring judgment and estimates.

derivative liability

January 1, 2019

in fair value included in earnings

March 31, 2019

in fair value included in earnings

at December 31, 2019

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

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.

Based Compensation

compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition

in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity

instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively,

the vesting period).

The ASC also requires measurement of the cost of employee and director services received in exchange for

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

These derivatives, including embedded derivatives in the Company’s

structured borrowings, are separately valued and accounted for on the Company’s balance sheet.

Fair values for exchange traded

securities and derivatives are based on quoted market prices.

Where market prices are not readily available, fair values are determined

using market-based pricing models incorporating readily observable market data and requiring judgment and estimates.

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.

compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the

consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments

over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period).

The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date

fair value of the award.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

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

The expense is recognized over the vesting period of the award.

Until the measurement date is reached, the total

amount of compensation expense remains uncertain.

The Company initially records compensation expense based on the fair value of

the award at the reporting date.

Further, ASC Topic 718, 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 price of $0.

Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes”

740-10”) which requires, among other things, an asset and liability approach to calculating deferred income taxes.

and liability approach require the recognition of deferred tax assets and liabilities for the expected future tax consequences

of temporary differences between the carrying amounts and the tax bases of assets and liabilities.

A valuation allowance is provided

to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will

not be realized.

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

date.” The expense is recognized over the vesting period of the award.

Until the measurement date is reached, the total amount

of compensation expense remains uncertain.

The Company initially records compensation expense based on the fair value of the award at

the reporting date.

Further, ASC Topic 718, 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 price

Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”)

which requires, among other things, an asset and liability approach to calculating deferred income taxes.

The asset and liability approach

require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between

the carrying amounts and the tax bases of assets and liabilities.

A valuation allowance is provided to offset any net deferred tax assets

for which management believes it is more likely than not that the net deferred asset will not be realized.

Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions.

When tax returns are filed,

there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained.

In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the

period during which, based on all available evidence, management believes it is more likely than not that the position will be

sustained upon examination, including the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset

or aggregated with other positions.

positions that meet the more likely than not recognition threshold is measured at the largest amount of tax benefit that is more

than 50 percent likely of being realized upon settlement with the applicable taxing authority.

The portion of the benefit associated

with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax

benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing

authorities upon examination.

When tax returns are filed, there

may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained.

In accordance

with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which,

based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination,

including the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset or aggregated with other positions.

positions that meet the more likely than not recognition threshold is measured at the largest amount of tax benefit that is more than

50 percent likely of being realized upon settlement with the applicable taxing authority.

The portion of the benefit associated with

tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits

in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon

Company believes its tax positions are all more likely than not to be upheld upon examination.

1 unchanged sentence

a liability for uncertain tax benefits.

Company has adopted ASC 740-10-25, “Definition of Settlement,”

which provides guidance on how an entity should determine

whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides

that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally

extinguished.

For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even

if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and

the statute of limitations remains open.

The federal and state income tax returns of the Company are subject to examination by

the IRS and state taxing authorities, generally for three years after they are filed.

Company has adopted ASC 740-10-25, “Definition of Settlement,” which provides guidance on how an entity should determine

whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a

tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished.

For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position

is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations

remains open.

The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities,

generally for three years after they are filed.

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.

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.

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.

Variable lease expenses are recorded

when incurred.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election,

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

excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and

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

December 31, 2021 and 2020, the Company had aggregated current and long-term operating lease liabilities of $ 19,763 and $ 0 , respectively,

and right of use assets of $ 22,643 and $ 55,606 , respectively.

and Development

Company accounts for research and development costs in accordance with the Accounting Standards Codification subtopic 730-10,

Research and Development (“ASC 730-10”).

Under ASC 730-10, all research and development costs must be charged to expense

Company accounts for research and development costs in accordance with the Accounting Standards Codification subtopic 730-10, Research

and Development (“ASC 730-10”).

Under ASC 730-10, all research and development costs must be charged to expense as incurred.

Accordingly, internal research and development costs are expensed as incurred.

Third-party research and development

costs are expensed when the contracted work has been performed or as milestone results have been achieved.

Company-sponsored research

and development costs related to both present and future products are expensed in the period incurred.

On February 19, 2015, the

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

31, 2019, there were no additional expenditures on research and development.

Third-party research and development costs are expensed

when the contracted work has been performed or as milestone results have been achieved.

Company-sponsored research and development costs

related to both present and future products are expensed in the period incurred.

For the years ended December 31, 2021 and 2020, there

were no expenditures on research and development.

Other Comprehensive Income (Loss)

Comprehensive

income (loss) is comprised of net income (loss) and all changes to the statements of stockholders’

For the Company,

comprehensive loss for the years ended December 31, 2020 and 2019 included net loss and unrealized losses from foreign currency

translation adjustments.

income (loss) is comprised of net income (loss) and all changes to the statements of stockholders’ equity.

For the Company, comprehensive

loss for the years ended December 31, 2021and 2020 included net loss and unrealized losses from foreign currency translation adjustments.

per Common Share

income (loss) per common share is calculated in accordance with ASC Topic 260:

Earnings per Share (“ASC 260”).

income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding

during the period.

The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted

average shares outstanding as they would be anti-dilutive.

In periods where the Company has a net loss, all dilutive securities

are excluded.

Earnings per Share (“ASC 260”).

(loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during

The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average

shares outstanding as they would be anti-dilutive.

In periods where the Company has a net loss, all dilutive securities are excluded.

following are dilutive common stock equivalents during the year ended:

preferred stock

SCHEDULE OF DILUTIVE COMMON STOCK EQUIVALENTS

notes payable (1)

6,227,340 shares of our common stock issuable upon conversion of $1,294,268 of Convertible Notes Payable as of December 31, 2020,

not accounting for 4.99% beneficial ownership limitations.

(1) 1,245,468

shares of our common stock issuable upon conversion of $ 1,294,268

of Convertible Notes Payable as of December 31, 2020, not accounting for 4.99 %

beneficial ownership limitations.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

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

In accordance with ASC 260-10-S99, such extinguishment on preferred shares considered as redemptions of preferred shares and the

difference between the fair value of the consideration and the carrying amount of the preferred shares will adjust the net income

(loss) available to common stockholders in the calculation of earnings per shares.

The following are the adjustment to the net

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

December 31, 2020

December 31, 2019

shares redemption adjustment

loss available to common shareholders

LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

number of common shares outstanding –

basic & diluted

applicable to common shareholders per share

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Party Transactions

1 unchanged sentence

is controlled by, or is under common control with the Company.

Related parties also include principal owners of the Company, its

management, members of the immediate families of principal owners of the Company and its management and other parties with which

the Company may deal if one party controls or can significantly influence the management or operating policies of the other to

an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

A party which

can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest

in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties

might be prevented from fully pursuing its own separate interests is also a related party.

Related parties also include principal owners of the Company, its management,

members of the immediate families of principal owners of the Company and its management and other parties with which the Company may

deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of

the transacting parties might be prevented from fully pursuing its own separate interests.

A party which can significantly influence

the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties

and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing

its own separate interests is also a related party, (see Note 17).

Accounting Pronouncements

Pronouncements Recently Adopted

January 2016, the FASB issued ASU No.

2016-01, Financial Instruments —

Recognition and Measurement of Financial

Assets and Financial Liabilities.

The guidance affects the accounting for equity investments, financial liabilities under

the fair value option and the presentation and disclosure requirements of financial instruments.

The guidance is effective in

the first quarter of fiscal 2019.

Early adoption is permitted for the accounting guidance on financial liabilities under the fair

value option.

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

July 2017, the FASB issued ASU No.

2017-11, Earnings Per Share, Distinguishing Liabilities from Equity and Derivatives and

Hedging , which changes the accounting and earnings per share for certain instruments with down round features.

The amendments

in this ASU are applied using a cumulative-effect adjustment as of the beginning of the fiscal year or retrospective adjustment

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

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.

Topic 842 with ASU No.

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.

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

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.

May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic

470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity

(Subtopic 815-40).

ASU 2021-04 clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding

equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.

provides guidance to clarify whether an issuer should account for a modification or an exchange of a freestanding equity-classified written

call option that remains equity classified after modification or exchange as (1) an adjustment to equity and, if so, the related earnings

per share effects, if any, or (2) an expense and, if so, the manner and pattern of recognition.

ASU 2021-04 is effective for annual beginning

after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted, including adoption in an interim

The Company is currently evaluating the impact that this standard will have on its consolidated financial statements.

October 2021, the FASB issued guidance which requires companies to apply Topic 606, Revenue from Contracts with Customers, to recognize

and measure contract assets and contract liabilities from contracts with customers acquired in a business combination.

Public entities

must adopt the new guidance for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years, with early

adoption permitted.

The Company is currently evaluating the impact and timing of adoption of this guidance

new accounting standards, not disclosed above, that have been issued or proposed by FASB that do not require adoption until a future

date are not expected to have a material impact on the consolidated financial statements upon adoption.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

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

to have a material impact on the consolidated financial statements upon adoption.

The Company does not discuss recent pronouncements

that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or

2 - GOING CONCERN CONSIDERATIONS

accompanying consolidated financial statements are prepared assuming the Company will 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.

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

a material impact on the consolidated financial statements upon adoption.

The Company does not discuss recent pronouncements that are

not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

2 – INVENTORIES

December 31, 2021 and 2020, inventories consisted of the following:

SCHEDULE OF INVENTORIES

reserve for obsolete inventory

the years ended December 31, 2021 and 2020, the Company did not make any change for reserve for obsolete inventory.

3 – VAT RECEIVABLE

January 1, 2021, VAT rules relating to imports and exports between the UK and EU changed as a result, of the UK’s departure from

the EU, (“BREXIT”).

For the year ending December 31, 2021, the Company recorded a receivable in the amount of $ 491,417 for

amounts available to reclaim against the tax liability from UK and EU countries.

Subsequently to December 31, 2021, the Company has received

a total of £ 70,756 or $ 95,759 , using an exchange rate close of 1.3533720 GBP:USD, in regard to this receivable.

4 – PREPAID EXPENSES

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

Prepaid expenses include prepayments in cash

for accounting fees, prepayments in equity instruments, which are being amortized over the terms of their respective agreements,

as well as cost associated with certain contract liabilities.

The current portion consists of costs paid for future services which

will occur within a year.

expenses current and long term amounted to $ 97,068

and $ 49,867 ,

respectively for the year ended December 31, 2021,

as compared to $ 1,784 and

for the year ended December 31, 2020.

Prepaid expenses include prepayments in cash for accounting fees, prepayments in equity instruments,

which are being amortized over the terms of their respective agreements, as well as cost associated with certain contract liabilities.

The current portion consists of costs paid for future services which will occur within a year.

5 – PROPERTY AND EQUIPMENT

and equipment consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

furniture and fixtures

Property, Plant and Equipment, Gross

accumulated depreciation

( 1,502,501 )

( 1,211,099 )

expense was $ 292,102 and $ 269,926 for the year ended December 31, 2021 and 2020, respectively.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6 – INTANGIBLE ASSETS

December 10, 2014, the Company entered the satellite voice and data equipment sales and service business through the purchase

of certain contracts from Global Telesat Corp., (“GTC”).

These contracts permit the Company to utilize the Globalstar,

and Globalstar LLC (collectively, “Globalstar”) mobile satellite voice and data network.

The purchase price for

the contracts of $250,000 was paid by the Company under an asset purchase agreement by and among the Company, its wholly-owned

subsidiary Orbital Satcom, GTC and World Surveillance Group, Inc.

December 10, 2014, the Company entered the satellite voice and data equipment sales and service business through the purchase of certain

contracts from Global Telesat Corp., (“GTC”).

These contracts permit the Company to utilize the Globalstar, Inc.

and Globalstar

LLC (collectively, “Globalstar”) mobile satellite voice and data network.

The purchase price for the contracts of $ 250,000

was paid by the Company under an asset purchase agreement by and among the Company, its wholly-owned subsidiary Orbital Satcom, GTC and

World Surveillance Group, Inc.

in the purchased assets are:

(i) the rights and benefits granted to GTC under each of the Globalstar Contracts, subject to certain

exclusions, (ii) account and online access to the Globalstar Cody Simplex activation system, (iii) GTC’s existing customers

who are serviced pursuant to the Globalstar Contracts (only as to their business directly and exclusively related to the Globalstar

Contracts), and (iv) all of GTC’s rights and benefits directly and exclusively related to the Globalstar Contracts.

(i) the rights and benefits granted to GTC under each of the Globalstar Contracts, subject to certain exclusions,

(ii) account and online access to the Globalstar Cody Simplex activation system, (iii) GTC’s existing customers who are serviced

pursuant to the Globalstar Contracts (only as to their business directly and exclusively related to the Globalstar Contracts), and (iv)

all of GTC’s rights and benefits directly and exclusively related to the Globalstar Contracts.

of customer contracts are included in depreciation and amortization.

1 unchanged sentence

Future amortization of intangible assets is as follows:

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

The design is in need of further enhancements, before the Company can include it in its existing product lines.

receipt of sufficient additional capital, the Company intends to complete the launch of its new tracking design.

The Company has

recorded an impairment of $50,000, in relation to this other asset, as it has not received funding to date to launch the design.

SCHEDULE OF FUTURE AMORTIZATION OF INTANGIBLE ASSETS

the years ended December 31, 2021 and 2020, there were no additional expenditures on research and development

7 - ACCOUNTS PAYABLE AND ACCRUED OTHER LIABILITIES

payable and accrued other liabilities consisted of the following:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED OTHER LIABILITIES

deposits payable

4 unchanged sentences

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8 – LINE OF CREDIT

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

The one-year term loan

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

For the years ended December 31,

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

The short-term line of credit balance as

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

NOTE EXCHANGE AGREEMENT

April 30, 2019, the Company entered into a Shares for Note Exchange Agreement (each, an “Agreement”

and collectively,

the “Agreements”) with certain holders of the Company’s preferred stock (the “Converting Stockholders”).

Pursuant to the terms of the Agreements, the Company agreed to exchange the preferred shares held by the respective Converting

Stockholders for promissory notes as follows:

exchange for the above-referenced shares of preferred stock, the Company issued a promissory note (each, a “Note”

and collectively, the “Notes”) to each of the Converting Stockholders on April 30, 2019.

Each Note bears interest

at a rate of 6% per annum and is due on the second anniversary of the issuance date.

Interest accrues on a simple interest, non-compounded

basis and will be added to the principal amount on the maturity date.

In the event that any amount due under a Note 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 prepay the Notes at any time.

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.

The one-year term loan was

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

For the years ended December 31, 2021, and

2020, the Company recorded interest expense of $ 0 and $ 952 , respectively.

The short-term line of credit balance as of December 31, 2021,

and 2020, was $ 0 , respectively.

9– CONVERTIBLE NOTES PAYABLE

Notes Payable –

current portion

January 14, 2019, under the terms of a Securities Purchase Agreement, we issued a Convertible Promissory Note in the amount of

$65,000 (the “Note”) to Power Up Lending Group Ltd.

(“Power Up”).

The Note bears interest at a rate of

twelve percent (12%) per year and is due one (1) year from the date of issue.

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.

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

The Note may be pre-paid at a premium for

the first 150 days after issue, with the pre-payment amount ranging from 115% of the balance to 140% of the balance.

days from issue, pre-payment of the Note is not allowed.

On May 14, 2019, the Company repaid the convertible note payable, an

aggregate of $87,778, representing principal of $65,000, prepayment penalty of $20,257 and accrued interest of $2,522.

has paid the debenture in cash and not converted the note to its common stock, any note amortization and derivative liabilities

have been reversed.

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

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

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, 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 –

May 14, 2019 (the “Issue Date”), the Company entered into a Note Purchase Agreement (the “NPA”) by and

among the Company and the lenders set forth on the lender schedule to the NPA (the “Lenders”), as amended by that

certain Amendment to Note Purchase Agreement (the “Amendment,”

and, together with the NPA, the “Agreement”)

by and among the Company and the Lenders.

In total, pursuant to the Agreement, the Company issued an aggregate principal amount

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

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

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

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

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

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

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

defined below).

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

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

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

than as required by the Agreement.

The Notes are general, unsecured obligations of the Company.

The proceeds of the Notes will

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

For the years ended December

31, 2020 and 2019, the Company recorded simple interest expense of $41,597 and $30,568, respectively.

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

A Holder may elect to convert its Note,

and all of the Indebtedness outstanding as of such time, into the number of fully paid and non-assessable shares of Common Stock

(the “Conversion Shares”) as determined by dividing the Indebtedness by $0.10, subject to certain adjustments, but

excluding adjustment for a reserve stock split of no more than 1:20 contemplated by the Company at the Issue Date.

right of conversion is subject to a beneficial ownership limitation of 4.99% of the number of shares of Common Stock outstanding

immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion.

Agreement contains customary representations and warranties and customary affirmative and negative covenants.

These covenants

include, among other things, certain limitations on the ability of the Company to:

(i) pay dividends on its capital stock;

make distributions in respect of its capital stock;

(iii) acquire shares of capital stock;

and, (iv) sell, lease or dispose of

Pursuant to the Agreement, the Holders are granted demand registration rights and pre-emptive rights as set forth in the

The Agreement 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”).

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

common share, the lesser amount of the conversion feature or debt was $805,000 and presented a beneficial conversion feature.

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 $169,668 discount on the debt to interest expense, resulting in a balance

of unamortized discount notes payable of $635,333.

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%

notes payable – long term

2021 Financing

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 (the “Lender”).

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”).

2021 Note is a general, unsecured obligation of the Company and bears simple interest at a rate of 7 %

per annum and matures on the third anniversary of the date of issuance (the “Maturity Date”), 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 was 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 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.

The Company may not pre-pay or redeem the March 2021 Note other than as required

by the Agreement.

Noteholder had 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) $7.50 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 conversion.

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 March 2021 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 events .

“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, as amended.

The Noteholder is granted registration rights and pre-emptive rights.

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.

The Company’s issuance of the March 2021 Note under the terms of the

March 2021 NPA was made pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Securities

Act”) in reliance on Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.

in the March 2021 Note is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities

There were no discounts or brokerage fees associated with this offering.

The Company used the offering proceeds for working capital

and general corporate purposes.

In April 2021 the Noteholder waived contractual pre-emptive rights set forth in the March 2021 NPA.

On May 27, 2021, the Lender converted $ 350,000 of the March 2021 Note into 100,000 shares of common stock.

2020 Financing

December 1, 2020, the Company entered into a Note Purchase Agreement by and among the Company and certain lenders where the Company sold

an aggregate principal amount of $ 244,000 of its convertible promissory notes (the “December 2020 Notes”).

The December 2020

Note holders had an optional right of conversion such that a Noteholder may elect to convert his December 2020 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 adjustments.

2020 Financing

August 21, 2020, the Company entered into a Note Purchase Agreement by and among the Company and certain lenders where the Company sold

an aggregate principal amount of $ 933,000 of its convertible promissory notes (the “August 2020 Notes”).

The August 2020

Note holders had an optional right of conversion such that a Noteholder may elect to convert his August 2020 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.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

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.

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 9– CONVERTIBLE NOTES PAYABLE

balances of the Company’s convertible note payable consist of the following:

SCHEDULE OF CONVERTIBLE NOTES PAYABLE

( 1,084,944 )

the years ended December 31, 2021 and 2020, we amortized the discount on the debt, to interest expense of $ 1,425,365

and $ 538,087 ,

resulting in a balance of unamortized notes payable of $ 0

and $ 331,171 ,

respectively.

the year ended December 31, 2021, the Holders converted a total of $ 1,644,267

of the convertible debt to 1,345,468

shares of common shares.

June 15, 2020, the change in conversion price from $ 0.50 to $ 1.00 per share, resulted in a difference in the carrying value of the balance

of the note payable.

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

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

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

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

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

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

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

the amended note of $ 17,041 , resulting in a balance of unamortized discount notes payable of $ 775,892 as of June 30, 2020.

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 .

the year ended December 31, 2020, the Holders converted a total of $ 687,734 of the convertible debt to 699,800 shares of common shares,

26,823 of which were at the conversion rate of $ 0.50 per share and 672,978 of which were at the conversion rate of $ 1.00 per share.

balance of the convertible notes at December 31, 2020, net of unamortized discount of $ 1,084,944 , is $ 209,323 .

NOTE 10 STOCK SUBSCRIPTION PAYABLE

On December 31, 2021, after

markets closed, a securities purchase agreement (the “Purchase Agreement”) was circulated to, and signatures were received

from, certain institutional and accredited investors (the “December Investors”) in connection with the sale in a private

placement by the Company of 2,229,950 shares of the Company’s common stock (the “December Offering”).

On January 2,

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

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

For the year ended December

31, 2021, the Company received gross proceeds of $ 1,400,000 of the $ 7,225,038 , pursuant to the December Offering, see Note 19 Subsequent

On January 5, 2022, the Company received an additional $ 5,825,038 , resulting in the issuance of 2,229,950 shares of the Company’s

common stock, eliminating the stock subscription payable as well as, the closing of the offering.

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

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 $ 338,343

at an exchange rate of GBP:USD of 1.3533720 .

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

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.

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

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

January 1, 2019

in fair value included in earnings

March 31, 2019

in fair value included in earnings

liability reversed

at December 31, 2019

Company used the following assumptions for determining the fair value of the convertible instruments granted under the Black-Scholes

option pricing model:

interest rate

dividend yield

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, 2021, and

2020, the Company has recorded $ 56,391

as current portion of notes payable and $ 253,757

and $ 320,626

as notes payable long term, respectively.

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

The loan was for $ 20,832

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

On May 23, 2021, BlueVine, the Company’s

SBA approved mortgage lender and originator, notified the Company, that the loan in the amount of $ 20,832 , had been forgiven.

As of December

31, 2021, the Company has recorded $ 20,832 as forgiveness of debt

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.

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

number of shares of authorized capital stock to 800,000,000 shares consisting of (i) 750,000,000 shares of common stock and (ii)

50,000,000 shares of preferred stock from 220,000,000 shares consisting of (i) 200,000,000 shares of common stock and (ii) 20,000,000

shares of preferred stock.

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12 - STOCKHOLDERS’ EQUITY

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.

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

of shares of authorized capital stock to 800,000,000 shares consisting of (i) 750,000,000 shares of common stock and (ii) 50,000,000

shares of preferred stock from 220,000,000 shares consisting of (i) 200,000,000 shares of common stock and (ii) 20,000,000 shares of

preferred stock.

March 8, 2018, we conducted a reverse split of our common stock at a ratio of 1 for 150 .

All share and per share information in

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

The Certificate of Change provides for (i) a 1-for-15 reverse split (the “Reverse Split”) of the Company’s

common stock, $0.0001 par value per share, and the Company’s preferred stock, $0.0001 par value per share, (ii) a reduction

in the number of authorized shares of common stock in direct proportion to the Reverse Split (i.e.

from 750,000,000 shares to

50,000,000 shares), and (iii) a reduction in the number of authorized shares of preferred stock in direct proportion to the Reverse

from 50,000,000 shares to 3,333,333 shares).

All share and per share information in 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 State.

The Certificate of Change provides for (i) a 1-for-15 reverse split (the “Reverse Split”) of the Company’s common stock,

$ 0.0001 par value per share, and the Company’s preferred stock, $ 0.0001 par value per share, (ii) a reduction in the number of

authorized shares of common stock in direct proportion to the Reverse Split (i.e.

from 750,000,000 shares to 50,000,000 shares), and

(iii) a reduction in the number of authorized shares of preferred stock in direct proportion to the Reverse Split (i.e.

from 50,000,000

shares to 3,333,333 shares).

No fractional shares will be issued in connection with the Reverse Split.

Stockholders who otherwise would be entitled to receive fractional shares of common stock or preferred stock, as the case may

be, will have the number of post-Reverse Split shares to which they are entitled rounded up to the nearest whole number of shares.

No stockholders will receive cash in lieu of fractional shares.

Stockholders who otherwise would

be entitled to receive fractional shares of common stock or preferred stock, as the case may be, will have the number of post-Reverse

Split shares to which they are entitled rounded up to the nearest whole number of shares.

No stockholders will receive cash in lieu of

fractional shares.

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

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, 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

the Certificates of Designation for our Series C, D, E, H, I, J, and K Preferred Stock.

The amendments changed the conversion

rights of these classes of preferred stock such that the Maximum Conversion as defined in each such Certificate of Designation

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

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

of the Series E preferred stock, the Company filed an Amended and Restated Certificate of Designations for the Company’s

Series E preferred stock.

The amendments had the effect of changing the conversion rights such that the 9.99% blocker was eliminated

July 12, 2019, pursuant to the approval of our board of directors and a majority of the shareholders in each class, we amended

the Certificates of Designation for our Series E, I and L Preferred Stock.

The amendments had the effect of authorizing the Company’s

Board to require the conversion of the Series E, I and L preferred stock into common stock of the Company at the then-applicable

conversion ratio, without the approval of any holders of Series E, I and L preferred stock.

on July 12, 2019, the Company filed Certificates of Withdrawal of Certificate of Designations for the Company’s Series A,

B, C, D, F, G, H and J preferred stock, pursuant to which the Series A, B, C, D, F, G, H and J preferred stock was cancelled.

July 15, 2019, the Company filed a Certificate of Withdrawal of Certificate of Designations (the “Series K Certificate”)

for the Company’s Series K preferred stock, pursuant to which the Series K preferred stock was cancelled.

July 18, 2019, the Company filed Certificates of Withdrawal of Designations for the Company’s Series E, I and L preferred

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

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.

May 28, 2021, the Company effected a reverse

stock split of its common stock at a ratio of 1-for-5 (the

“Reverse Split”).

No fractional shares of common stock were issued as a result of the Reverse Split.

Stockholders of record

who were otherwise entitled to receive a fractional share received a whole share.

The conversion or exercise prices of Company’s

issued and outstanding convertible securities, stock options and warrants will be adjusted accordingly.

All information presented in

this Annual Report on Form 10-K, assumes a 1-for-5

reverse stock split of Company’s outstanding

shares of common stock, and unless otherwise indicated, all such amounts and corresponding conversion price or exercise price data set

forth in this Annual Report on Form 10K have been adjusted to give effect to such assumed reverse stock split.

on the Nasdaq Capital Market

common stock and warrants have been trading on the Nasdaq Capital Market under the symbols “NXPL” and “NXPLW,”

respectively, since January 21, 2022.

Prior to January 21, 2022, our common stock and warrants were traded on the Nasdaq Capital Market

under the symbols “OSAT” and “OSATW,” respectively.

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

As of December 31, 2021, and 2020,

there were and 7,053,146

shares of common stock and 0

shares of preferred stock issued and outstanding,

respectively.

of December 31, 2021 and 2020, there were no preferred shares issued and outstanding.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

of December 31, 2021, there were 2,836,092 registered warrants authorized to purchase of common stock and 2,530,092 registered warrants

issued and outstanding.

June 2, 2021, the Company issued 2,880,000 warrants to purchase 2,880,000 shares of common stock in an offering, at an exercise price

of $ 5.00 and a term of 5 years.

June 10, 2021, the Company issued 1,000 shares of common stock in our June Offering, as described below, for the exercise of 1,000 warrants,

at an exercise price of $ 5.00 , for cash consideration of $ 5,000 .

June 28, 2021, the Company issued an additional 432,000 warrants to purchase 432,000 shares of common stock in June Offering, at an exercise

price of $ 5.00 and a term of 5 years.

July 6, 2021, the Company issued 78,500 shares of common stock, for the exercise of 78,500 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 392,500 .

July 8, 2021, the Company issued 425,000 shares of common stock, for the exercise of 425,000 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 2,125,000 .

July 12, 2021, the Company issued 2,000 shares of common stock, for the exercise of 2,000 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 10,000 .

July 13, 2021, the Company issued 59,853 shares of common stock, for the exercise of 59,853 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 299,265 .

July 14, 2021, the Company issued 278,555 shares of common stock, for the exercise of 278,555 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 1,392,775 .

July 15, 2021, the Company issued 5,000 shares of common stock in connection with the exercise of 5,000 options, for cash consideration

July 19, 2021, the Company issued 1,000 shares of common stock, for the exercise of 1,000 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 5,000 .

July 30, 2021, the Company issued 80,000 shares of common stock, for the exercise of 80,000 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 400,000 .

addition to, but separate from, the registered warrants included in the units sold in the June Offering, the Company issued 144,000 warrants

to Maxim Group LLC, the underwriter (the “Underwriter Warrants”) in connection with the June Offering.

The Underwriter Warrants

expire five years from the effective date of the June Offering and are exercisable at a per share price equal to $ 5.50 per share, or

110 % of the public offering price per unit in the June Offering.

of December 31, 2021, there were 144,000

Underwriter Warrants issued and outstanding.

summary of the status of the Company’s total outstanding warrants and changes during the year ended December 31, 2021 is as follows:

SCHEDULE OF OUTSTANDING STOCK WARRANTS ACTIVITIES

Balance at January 1, 2020

Balance outstanding and exercisable at December 31, 2020

at January 1, 2021

outstanding and exercisable at December 31, 2021

of December 31, 2021, and December 31, 2020, there were 2,530,092 and 800 warrants outstanding, respectively.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

the year ended December 31, 2021

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,

January 12, 2021, the Company issued an aggregate of 30,000 shares of common stock upon the conversion of $ 30,000 of its convertible

debt, at the conversion rate of $ 1.00 per share.

February 23, 2021, the Company issued an aggregate of 80,289 shares of common stock upon the conversion of $ 80,289 of its convertible

debt, at the conversion rate of $ 1.00 per share.

February 23, 2021, the Company issued an aggregate of 120,000 shares of common stock upon the conversion of $ 150,000 of its convertible

debt, at the conversion rate of $ 1.25 per share.

February 23, 2021, the Company issued an aggregate of 1,000 shares of common stock for services in the amount of $ 14,200 .

March 1, 2021, the Company issued an aggregate of 149,532 shares of common stock upon the conversion of $ 149,532 of its convertible debt,

at the conversion rate of $ 1.00 per share.

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

March 1, 2021, the Company issued an aggregate of 38,616 shares of common stock upon the conversion of $ 48,270 of its convertible debt,

at the conversion rate of $ 1.25 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

March 24, 2021, the Company’s shareholders via majority shareholder consent authorized a stock split not to exceed 1

for 5 reverse stock split.

A definitive Information Statement relating to the shareholder consent was filed with the SEC on March 13,

The Company’s Board of Directors subsequently approved the 1-for-5 reverse stock split.

The Company has filed a Certificate

of Change to its Amended and Restated Articles of Incorporation to effect a reverse stock split of its issued and outstanding common

stock, at a ratio of 1-for-5.

The effective time of the reverse stock split will be 12:01 a.m.

ET on May 28, 2021 .

The Company’s common stock will begin trading on a split-adjusted basis commencing upon market open on May 28, 2021.

stock will be assigned a new CUSIP number, 68557F 209.

The warrants will be assigned the CUSIP number, 68557F 118.

No fractional shares

of common stock will be issued as a result of the reverse stock split.

Stockholders of record who would otherwise be entitled to receive

a fractional share will receive a whole share.

May 20, 2021, Company issued an aggregate of 29,800 shares of common stock upon the conversion of $ 29,800 of its convertible debt, at

a weighted average conversion rate of $ 1.00 .

On May 27, 2021, Company issued

an aggregate of 897,231 shares of common stock upon the conversion of $ 1,156,377 of its convertible debt, at a weighted average conversion

rate of $ 1.29 .

May 28, 2021, Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Maxim Group LLC(the “Underwriter”),

pursuant to which the

Company agreed to issue and sell to the Underwriter in an underwritten public offering 2,880,000

units consisting of one share of common stock and one

warrant, exercisable for one share of common stock at a public offering price of $ 5.00

per unit, (after giving effect to a 1-for-5 reverse

stock split, discussed above) for aggregate gross proceeds of approximately $ 14,400,000

before deducting underwriting discounts, commissions,

and other offering expenses (the “June Offering”).

The common stock and warrants were immediately separable and were issued

The common stock and warrants began trading on the Nasdaq Capital Market, on May 28, 2021, under the symbols “OSAT”

and “OSATW,” respectively.

In addition, the Company In addition, the Company has granted the Underwriter a 45-day option

to purchase an additional 432,000

shares of common stock and/or warrants to purchase

up to an aggregate of 432,000

shares of common stock, in any combination thereof,

at the public offering price per security, less the underwriting discounts and commissions, to cover over-allotments, if any.

Offering closed on June 2, 2021.In connection with closing of the June Offering, the Underwriter partially exercised its overallotment

option and purchased an additional 432,000

warrants at $ 0.01

per warrant for additional gross proceeds to

the Company of $ 4,320 .

On June 28, 2021, the Underwriter, upon the exercise in full of the balance of its over-allotment option, purchased 432,000

additional gross and net proceeds after

deducting underwriting discounts of $ 2,160,000 and $ 1,983,226 , respectively.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

have issued to the Underwriter warrants to purchase up to a total of 144,000

shares of common stock ( 5 % of the shares of common

stock included in the Units, excluding the over-allotment, if any) (the “Underwriter Warrants”).

The Underwriter Warrants

are exercisable at any time, and from time to time, in whole or in part, during the period commencing 180 days from the effective date

of the registration statement and expire five years from the effective date of the offering, which period is in compliance with

FINRA Rule 5110(e).

The Underwriter Warrants are exercisable at a per share price equal to $ 5.50

per share, or 110 %

of the public offering price per unit in the offering.

The Underwriter Warrants have been deemed compensation by FINRA and are therefore

subject to a 180-day lock-up pursuant to Rule 5110(e)(1) of FINRA.

The underwriter (or permitted assignees under Rule 5110(e)(2)) will

not sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will they engage in

any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants

or the underlying securities for a period of 180 days from the effective date of the registration statement.

In addition, the warrants

provide for certain piggyback registration rights.

The piggyback registration rights provided will not be greater than five years from

the effective date of the registration statement in compliance with FINRA Rule 5110(g)(8).

We will bear all fees and expenses attendant

to registering the securities issuable on exercise of the Underwriter Warrants.

The exercise price and number of shares issuable upon

exercise of the Underwriter Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary

cash dividend or our recapitalization, reorganization, merger or consolidation.

However, the warrant exercise price or underlying shares

will not be adjusted for issuances of shares of common stock at a price below the warrant exercise price.

The June Offering of

common stock and warrants, and the underwriter’s exercise of the over-allotment option in connection therewith, resulted in

total gross proceeds of approximately $ 16,560,000

before deducting underwriting discounts, commissions, and other offering expenses.

June 10, 2021, the Company issued 1,000 shares of common stock, for the exercise of 1,000 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 5,000 .

July 6, 2021, the Company issued 78,500 shares of common stock, for the exercise of 78,500 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 392,500 .

July 8, 2021, the Company issued 425,000 shares of common stock, for the exercise of 425,000 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 2,125,000 .

July 12, 2021, the Company issued 2,000 shares of common stock, for the exercise of 2,000 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 10,000 .

July 13, 2021, the Company issued 59,853 shares of common stock, for the exercise of 59,853 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 299,265 .

July 14, 2021, the Company issued 278,555 shares of common stock, for the exercise of 278,555 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 1,392,775 .

July 15, 2021, the Company issued 5,000 shares of common stock in connection with the exercise of 5,000 options, for cash consideration

July 19, 2021, the Company issued 1,000 shares of common stock, for the exercise of 1,000 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 5,000 .

July 30, 2021, the Company issued 80,000 shares of common stock, for the exercise of 80,000 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 400,000 .

September 3, 2021, the Company issued 10,000 shares of common stock in connection with restricted stock awards, with a fair market value

of $ 5.35 per share, from the date of the award.

September 14, 2021, the Company issued 40,000 shares of common stock in connection with restricted stock awards, with a fair market value

of $ 5.35 per share, from the date of the award.

September 22, 2021, the Company issued a total of 12,437

common shares for the exercise of 14,200

options through a cashless exercise using

options for the $ 1.00

exercise price and in connection with a 1,000

restricted stock award.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

October 21, 2021, the Company issued 10,000

shares of common stock in connection with restricted

stock awards, with a fair market value of $ 4.75

per share, from the date of the award, for stock-based

compensation of $ 47,500 .

December 21, 2021, the Company issued 563,500 shares of common stock in connection with restricted stock awards, with a fair market value

of $ 3.74 per share, from the date of the award for stock-based compensation of $ 2,107,490 .

December 28, 2021, the Company awarded at total of 15,000

restricted stock awards, at a fair market value

from the date of issuance.

The Company issued 10,393

shares of common stock, withholding 4,607

of the award for the payment of taxes, this resulted

in net stock-based compensation of $ 39,597 .

the year ended December 31, 2020

Company issued a total of 791,760 shares of common stock during the year ended December 31, 2020, as described below:

January 30, 2020, the Company issued an aggregate of 3,629 common stock upon the conversion of $ 1,815 of its convertible debt, at the

conversion rate of $ 0.50 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

January 31, 2020, the Company issued an aggregate of 3,629 common stock upon the conversion of $ 1,815 of its convertible debt, at the

conversion rate of $ 0.50 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.

February 10, 2020, the Company issued an aggregate of 5,084 common stock upon the conversion of $ 2,542 of its convertible debt, at the

conversion rate of $ 0.50 per share.

February 11, 2020, the Company issued an aggregate of 4,716 common stock upon the conversion of $ 2,358 of its convertible debt, at the

conversion rate of $ 0.50 per share.

February 18, 2020, the Company issued an aggregate of 2,638 common stock upon the conversion of $ 1,319 of its convertible debt, at the

conversion rate of $ 0.50 per share.

February 19, 2020, the Company issued an aggregate of 894 common stock upon the conversion of $ 446 of its convertible debt, at the conversion

rate of $ 0.50 per share.

March 9, 2020, the Company issued an aggregate of 2,061 common stock upon the conversion of $ 1,031 of its convertible debt, at the conversion

rate of $ 0.50 per share.

April 17, 2020, the Company issued an aggregate of 1,409 common stock upon the conversion of $ 705 of its convertible debt, at the conversion

rate of $ 0.50 per share.

April 22, 2020, the Company issued an aggregate of 74 common stock upon the conversion of $ 37 of its convertible debt, at the conversion

rate of $ 0.50 per share.

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

rate of $ 1.00 per share.

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

rate of $ 1.00 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 4,000

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.

restricted shares of its common stock to the

consultant (the “Consulting Shares”), 1,000

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 4,000

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.

common stock valued at $ 50,200

and on November 13, 2020, the Company issued

common stock valued at $ 11,250 .

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

rate of $ 1.00 per share.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

August 25, 2020, David Phipps exercised 80,000 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.

Additionally, on August 25, 2020, Hector Delgado and

two employees exercised 22,000 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 85,960 shares

of common stock were issued.

August 25, 2020, the Company issued 1,000 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.

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

the conversion rate of $ 1.00 per share.

September 1, 2020, the Company issued an aggregate of 38,219 common stock upon the conversion of $ 38,219 of its convertible debt, at

the conversion rate of $ 1.00 per share.

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

conversion rate of $ 1.00 per share.

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

the conversion rate of $ 1.00 per share.

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

at the conversion rate of $ 1.00 per share.

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

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

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

the conversion rate of $ 1.00 per share.

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

the conversion rate of $ 1.00 per share.

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

the conversion rate of $ 1.00 per share.

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

the conversion rate of $ 1.00 per share.

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

the conversion rate of $ 1.00 per share.

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

conversion rate of $ 1.00 per share.

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

the conversion rate of $ 1.00 per share.

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

the conversion rate of $ 1.00 per share.

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

conversion rate of $ 1.00 per share.

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

conversion rate of $ 1.00 per share.

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

conversion rate of $ 1.00 per share.

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

the conversion rate of $ 1.00 per share.

November 13, 2020, the Company issued an aggregate of 38,894 common stock upon the conversion of $ 38,894 of its convertible debt, at

the conversion rate of $ 1.00 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

Stock, 43,667 shares of Series D Preferred Stock and 2,569 shares of Series K Preferred Stock.

April 22, 2019, we issued an aggregate of 2,780 shares of common stock upon the conversion of 17 shares of Series J Preferred

Stock and 3,868 shares of Series K Preferred Stock.

May 21, 2019, we issued an aggregate of 22,846 shares of common stock upon the conversion of 342,691 shares of Series E Preferred

May 20, 2019, we issued an aggregate of 209 shares of common stock upon the conversion of 1,563 shares of Series D Preferred Stock.

July 15, 2019, we issued an aggregate of 2,955 shares of common stock upon the conversion of 2,256 shares of Series E Preferred

33 shares of Series I Preferred Stock and 667 shares of Series L Preferred Stock.

August 27, 2019, we issued 557 shares of common stock in connection with the rounding up of fractional shares of common

stock, in relation to the 1:15 reverse stock split.

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

Issued Outside of Equity Incentive Plan

August 24, 2021, the Company issued to Douglas Ellenoff, Chief Business Development Strategist, 300,000 options which are fully vested,

to purchase its common stock.

The Company will issue an additional 150,000 options per year for the next three years which will be fully

vested at the end of each year, as long as Mr.

Ellenoff remains employed by the Company.

During the next three years, Mr.

Ellenoff will

be eligible to receive an additional 250,000 per year on each of the first three anniversaries of the commencement of his employment

if during each such year Mr.

Ellenoff introduces the Company to twelve (12) or more potential Business Transactions (as defined in the

Ellenoff Agreement and which transactions need not be consummated);

provided that the Company’s Chief Executive Officer may, in

his sole discretion, waive the vesting requirement in any given year.

Such options have an exercise price of $5.35 per share and will

terminate 5 years after they vest .

on August 24, 2021, the Company granted 25,000 options to Paul R Thomson, its Executive Vice President and current Chief Financial Officer.

The options were issued outside of the Company’s 2020 Equity Incentive Plan and are not governed by the 2020 Plan.

have an exercise price of $ 5.35 per share, vest immediately, and have a term of five years.

325,000 options granted were valued on the grant date at approximately $ 3.24 per option or a total of $ 1,053,064 using a Black-Scholes

option pricing model with the following assumptions:

stock price of $ 5.37 per share (based on the closing price of the Company’s

common stock of the date of grant), volatility of 75.25 %, expected term of 5 years, and a risk-free interest rate of 0.28 %.

October 8, 2021, the Company granted 25,000 options to Andrew Cohen, its Senior Vice President of Operations.

The options were issued

outside of the Company’s Equity Incentive Plans and are not governed by any Plans.

The options have an exercise price of $ 5.35

per share, vest immediately, and have a term of five years .

25,000 options granted were valued on the grant date at approximately $ 2.90 per option or a total of $ 72,350 using a Black-Scholes option

pricing model with the following assumptions:

stock price of $ 4.75 per share (based on the closing price of the Company’s common

stock of the date of grant), volatility of 80 %, expected term of 5 years , and a risk-free interest rate of 0.28 %.

Incentive Plan

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.

Additionally, on January 18, 2019, two employees

exercised 18,333 options through a cashless exercise.

The Company withheld newly acquired shares pursuant to the exercise of the

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 21,619

shares of common stock were issued.

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

The purpose of the 2018 Plan is

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

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

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

An award may also be granted to any consultant, agent, advisor

or independent contractor for bona fide services rendered to the Company or any Related Company (as defined in the 2018 Plan) that;

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

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

The 2018 Plan is administered by the Board its Compensation

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

The 2018 Plan provides that up to

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

Subject to earlier termination in accordance with the terms of the 2018 Plan and the instrument evidencing the option, the maximum term

of an incentive stock option shall not exceed ten years, and in the case of an incentive stock option granted to a Ten Percent Stockholder

(as defined in the 2018 Plan), shall not exceed five years.

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

a plan participant’s Termination of Service (as defined in the 2018 Plan) shall expire on such date.

In the event of a Change in

Control (as defined in the 2018 Plan);

all outstanding awards, other than performance shares and performance units, shall become fully

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

prior to the Change in Control and shall terminate at the effective time of the Change in Control;

provided, however, that with respect

to a Change in Control that is a Company Transaction (as defined in the 2018 Plan), such awards shall become fully and immediately exercisable,

and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, only if and to the extent such awards are

not converted, assumed or replaced by the Successor Company (as defined in the 2018 Plan.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

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.

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

and Restated 2020 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”) in order to provide a means for the Company to continue to attract, motivate and retain management, key employees, directors

and consultants.

On December 31, 2020, the Company’s Board of Directors approved and adopted an amendment that increased the number

of shares available for issuance under the 2020 Plan from 450,000 shares to 800,000 shares of the Company’s common stock.

10, 2021, the Company’s Board of Directors further amended the 2020 Plan and adopted and approved an Amended and Restated 2020

Equity Incentive Plan (the “A&R 2020 Plan”), in order to, among other things:

(i) clarify that the exercise price of

stock options will be set at “Fair Market Value,” and (ii) make conforming revision to reflect the 1-for-5 reverse split

that was effective on May 28, 2021.

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

Company’s 2021 Annual Meeting of Stockholders.

A&R 2020 Plan provides for discretionary awards of, among others, stock options, stock awards, stock unit awards and stock appreciation

rights to participants.

Each award made under the A&R 2020 Plan will be evidenced by a written award agreement specifying the terms

and conditions of the award as determined by the Committee in its sole discretion, consistent with the terms of the A&R 2020 Plan.

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

A&R 2020 Plan is administered by the “Committee” which is defined in the A&R 2020 Plan as the Compensation Committee

of the Board or such other committee as may be designated by the Board from time to time to administer the Plan, or, if no such committee

has been designated at the time of any grants, it shall mean the Board.

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