What changed in this filing

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Item 1. Financial Statements

2022-05-16 compared with 2021-11-15 · 706 added, 1177 removed, 548 unchanged (77% of the section changed)

Financial Statements

unaudited financial statements of Orbsat Corp (“Orbsat,” the “Company,” “we,” or “our”),

for the nine months ended September 30, 2021 and for comparable periods in the prior year are included below.

The financial statements

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

unaudited financial statements of NextPlat Corp, F/K/A/ Orbsat Corp, (“NextPlat,” the “Company,” “we,”

or “our”), for the three months ended March 31, 2022 and for comparable periods in the prior year are included below.

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

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

CONSOLIDATED BALANCE SHEETS AS OF

September 30, 2021

December 31, 2020

receivable, net

expenses – current portion

current assets

Accounts receivable, net

Unbilled revenue

VAT receivable

Prepaid expenses

Other current assets

Total current assets

Property and equipment, net

Intangible assets, net

Prepaid expenses – long term portion

LIABILITIES AND STOCKHOLDERS’ EQUITY

current assets

and equipment, net

expenses – long term portion

AND STOCKHOLDERS’ EQUITY

payable and accrued liabilities

payable Coronavirus loans– current portion

to related party

liabilities - current

for income taxes

subscription payable

from discontinued operations

current liabilities

Accounts payable and accrued liabilities

Contract liabilities

Note payable – current portion

Note payable Coronavirus loans– current portion

Due to related party

Lease liabilities – current

Provision for income taxes

Liabilities from discontinued operations

Total current liabilities

Long term liabilities:

Convertible debt, net of discount, unamortized, $ 0 and $ 1,084,944 , respectively

Note payable Coronavirus loans– long term

Lease liabilities – long term

Total Liabilities

Stockholders’ Equity:

Common stock, ($ 0.0001 par value;

50,000,000 shares authorized, 6,469,263 shares issued and outstanding as of September 30, 2021 and 817,450 shares issued and outstanding at December 31, 2020, respectively)

Additional paid-in capital

Accumulated (deficit)

term liabilities:

payable Coronavirus loans– long term

Stockholders’

Stock, $ 0.0001 par value;

3,333,333 shares authorized

stock, ($ 0.0001 par value;

50,000,000 shares authorized, 9,293,096 shares issued and outstanding as of March 31, 2022 and 7,053,146

outstanding at December 31, 2021, respectively)

paid-in capital

( 22,836,298 )

( 21,986,215 )

Accumulated other comprehensive income (loss)

Total stockholders’ equity

Total liabilities and stockholders’ equity

other comprehensive income (loss)

stockholders’ equity

liabilities and stockholders’ equity

the accompanying notes to the unaudited condensed consolidated financial statements.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

COMPREHENSIVE LOSS

Three Months Ended

September 30, 2021

Three Months Ended

September 30, 2020

Nine Months Ended

September 30, 2021

Nine Months Ended

September 30, 2020

Cost of sales

COMPREHNSIVE LOSS

general and administrative

wages and payroll taxes

and amortization

operating expenses

Selling and general administrative

Salaries, wages and payroll taxes

Stock based compensation

Professional fees

Depreciation and amortization

Total operating expenses

Loss before other expenses and income taxes

( 2,236,846 )

( 3,085,111 )

Other (income) expense

Gain on debt extinguishment

Interest earned

Interest expense

Foreign currency exchange rate variance

Total other (income) expense

Net (loss) income before tax expense

$ ( 2,305,549 )

$ ( 1,100,451 )

$ ( 4,567,085 )

$ ( 1,358,745 )

Provision for income taxes

Net (loss) income

( 2,305,549 )

( 1,100,451 )

( 4,567,085 )

( 1,358,745 )

Comprehensive income (loss):

Net (loss) income

( 2,305,549 )

( 1,100,451 )

before other expenses and income taxes

currency exchange rate variance

$ ( 850,083 )

$ ( 803,142 )

Foreign currency translation adjustments

Comprehensive income (loss)

Comprehensive

(loss) income:

$ ( 850,083 )

$ ( 803,142 )

currency translation adjustments

Comprehensive

$ ( 865,413 )

$ ( 801,531 )

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

Weighted number of common shares outstanding – basic & diluted

Basic and diluted net (loss) income per share

LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

number of common shares outstanding – basic & diluted

and diluted net (loss) per share

the accompanying notes to the unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

ORBITAL TRACKING CORP.

CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

the Nine months Ended September 30, 2021

$0.0001 Par Value

Comprehensive

Stockholders’

Income (Loss)

Balance, December 31, 2020

$ ( 13,878,553 )

Issuance common stock from convertible debt

Issuance of common related to offering

Issuance of common for over-allotment

Issuance of warrants for over-allotment

Issuance of common stock from exercise of warrant

Issuance of common stock for exercise of options

Stock based compensation in connection with options granted

Stock issued for services

Stock issued for services, shares

Stock based compensation in connection with restricted stock awards

Issuance of common stock for services

Beneficial conversion feature of convertible debt

Comprehensive loss

( 4,567,085 )

Balance, September 30, 2021

the Three Months Ended March 31, 2022

December 31, 2021

$ ( 21,986,215 )

the Nine months Ended September 30, 2020

of common related to offering

of common related to restricted stock award

Comprehensive

Stockholders’

Income (Loss)

Balance, December 31, 2019

$ ( 11,115,178 )

Issuance common stock from convertible debt

Issuance of common stock for options exercised

Stock issued for services

Stock based compensation in connection with options granted

Beneficial conversion feature of convertible debt

Comprehensive loss

March 31, 2022

$ ( 22,836,298 )

the Three Months Ended March 31, 2021

December 31, 2020

$ ( 13,878,553 )

Balance, September 30, 2020

common stock from convertible debt

of common related to restricted stock award

conversion feature of convertible debt

Comprehensive

March 31, 2021

$ ( 14,681,695 )

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CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

the Three Months Ended September 30, 2021

$0.0001 Par Value

the Three Months Ended March 31, 2022

Comprehensive

Stockholders’

Income (Loss)

Balance, June 30, 2021

$ ( 16,140,089 )

Issuance of common stock related to exercise of options

Stock based compensation for restricted stock awards

Stock based compensation for options granted

Issuance of common stock from exercise warrant

Comprehensive income

( 2,305,549 )

Balance, September 30, 2021

$ ( 18,445,638 )

the Three Months Ended September 30, 2020

$0.0001 Par Value

December 31, 2021

of common related to offering

of common related to restricted stock award

Comprehensive

March 31, 2022

the Three Months Ended March 31, 2021

Comprehensive

Stockholders’

Income (Loss)

Balance, June 30, 2020

$ ( 11,373,472 )

Issuance common stock from convertible debt

Issuance of common stock related to exercise of options

Stock issued for services

Stock based compensation for options granted

December 31, 2020

common stock from convertible debt

of common related to restricted stock award

Beneficial conversion feature of convertible debt

Comprehensive loss

( 1,100,451 )

Balance, September 30, 2020

$ ( 12,473,923 )

Comprehensive

March 31, 2021

accompanying notes to unaudited condensed consolidated financial statements.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THE NINE MONTHS ENDED

September 30, 2021

September 30, 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 4,567,085 )

THE THREE MONTHS ENDED

FLOWS FROM OPERATING ACTIVITIES:

$ ( 850,083 )

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

Depreciation expense

Amortization of intangible asset

Stock based compensation

Stock issued for services

Amortization of right to use

Amortization of convertible debt discount, net

Gain on debt extinguishment

Change in operating assets and liabilities:

Accounts receivable

Unbilled revenue

VAT receivable

Prepaid expense

Other current assets

Accounts payable and accrued liabilities

Lease liabilities

Provision for income taxes

Contract liabilities

Net cash used in operating activities

$ ( 803,142 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from convertible note payable

Proceeds from related party payable

Proceeds from common stock offering

Proceeds from warrant offering

Proceeds from exercise of warrant

Proceeds from exercise of options

Proceeds of note payable

Repayments of line of credit

Repayments of related party payable

Repayments of note payable

Repayments of Coronavirus note payable

Net cash provided by financing activities

Effect of exchange rate on cash

Net increase in cash

Cash beginning of period

Cash end of period

SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid during the period for

Non-cash adjustments during the period for

Beneficial conversion feature on convertible debt

Conversion of convertible debt into common shares

Obtaining right of use asset for lease liability

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

of intangible asset

of right to use

of convertible debt, net

based compensation

in operating assets and liabilities:

current assets

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) note payable, related party, net

from common stock offering

of note payable

to note payable Coronavirus loans

of convertible debt

cash provided by financing activities

of exchange rate on cash

increase (decrease) in cash

beginning of period

end of period

CASH FLOW INFORMATION

paid during the period for

adjustments during the period for

Common stock issued for stock subscription

conversion feature on convertible debt

of convertible debt into common shares

the accompanying notes to the unaudited condensed consolidated financial statements.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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statements not misleading.

The unaudited financial statements for the nine months ending September 30, 2021, are not necessarily indicative

The unaudited financial statements for the three months ending March 31, 2022, are not necessarily indicative

of the results for the remainder of the fiscal year.

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The accounting policies and procedures employed in the preparation of these condensed

consolidated financial statements have been derived from the audited financial statements of Orbsat Corp F/K/A/ Orbital Tracking Corp.

(the “Company”) for the year ended December 31, 2020, which are contained in the Company’s annual report on Form 10-K

as filed with the Securities and Exchange Commission (the “SEC”) on March 22, 2021.

The consolidated balance sheet as of

December 31, 2020 was derived from those financial statements.

consolidated financial statements have been derived from the audited financial statements of NextPlat Corp F/K/A/ Orbsat Corp (the “Company”)

for the year ended December 31, 2021, which are contained in the Company’s annual report on Form 10-K as filed with the Securities

and Exchange Commission (the “SEC”) on March 31, 2022.

The consolidated balance sheet as of December 31, 2021 was derived

from those financial statements.

of Presentation and Principles of Consolidation

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Orbital Satcom Corp.

(“Orbital Satcom”) and Global Telesat Communications Limited (“GTC”).

material intercompany balances and transactions have been eliminated in consolidation.

Corp 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.

and Global Telesat Communications Ltd.

All material intercompany balances and transactions have been eliminated

in consolidation.

Corp, a Nevada corporation (the “Company”), was formerly Orbsat Corp (“NextPlat”).

The business of NextPlat has been, and is currently, the provision of a comprehensive array of Satellite Industry communication services,

and related equipment sales.

As detailed in Online Storefronts and E-Commerce Platforms below, the Company operates two main e-commerce

websites as well as 25 third-party e-commerce storefronts such as Alibaba, Amazon and Walmart.

These e-commerce venues form an effective

global network serving thousands of consumers, enterprises, and governments.

NextPlat has announced its intention to broaden its e-commerce

platform and is implementing a comprehensive systems upgrade to support this initiative.

The Company has also begun the design and development

of a next generation platform for digital assets built for Web3 (an internet service built using decentralized blockchains).

platform (“NextPlat Digital”) is currently in the design and development phase and will enable the use of a range of digital

assets, such as non-fungible tokens (“NFTs”), in e-commerce and in community-building activities.

Company was originally incorporated in 1997 in Florida.

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with a wholly owned subsidiary.

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.

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

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enter the potash business.

wholly-owned subsidiary, Orbital Satcom Corp.

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

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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 .

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

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 a 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 .

Board of Directors subsequently approved a 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 was 12:01 a.m.

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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.

information presented in this Quarterly Report on Form 10-Q other than in Company’s consolidated financial statements

and the notes thereto 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 Quarterly Report

on Form 10-Q have been adjusted to give effect to such assumed reverse stock split.

May 28, 2021, our common stock and Warrants commenced trading on Nasdaq under the symbols “OSAT” and “OSATW,”

Stockholders of record who would otherwise be entitled to receive a fractional share were received a whole share.

January 18, 2022, the Company filed a Certificate of Amendment of the Amended and Restated Articles of Incorporation of the Company with

the Secretary of State of the State of Nevada in order to change the Company’s corporate name from Orbsat Corp to NextPlat Corp.

This name change was effective as of January 21, 2022.

The name change was approved by the Company’s stockholders at the 2021 annual

meeting of stockholders held on December 16, 2021.

information presented in this Quarterly Report on Form 10-Q other than in Company’s consolidated financial statements and the notes

thereto 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 Quarterly Report on Form 10-Q have been adjusted

to give effect to such assumed reverse stock split.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Telesat Communications Limited (“GTC”) was formed under the laws of England and Wales in 2008.

On February 19, 2015, the

Company 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 the Company.

an early-stage growth company, Orbsat’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 $ 14,400,000

(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.

Orbsat management has plans to raise additional capital in 2021.

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.

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

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the assumptions used to calculate stock-based compensation, derivative liabilities and common stock issued for services.

Reclassification

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

These reclassifications had no effect on

the reported results of operations.

and Cash Equivalents

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been exhausted and the potential for recovery is considered remote.

As of September 30, 2021, and December 31, 2020, there is

an allowance for doubtful accounts of $ 15,782

and $ 15,596 ,

respectively.

As of March 31, 2022, and December 31, 2021, there were no

allowances for doubtful accounts.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

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value of inventories is recorded to cost of goods sold.

expenses amounted to $ 8,653 at September 30, 2021 and $ 1,784 at December 31, 2020.

Prepaid expense includes prepaid rent of $ 6,169 , 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 amounted to $ 172,950 and $ 146,935 , at March 31, 2022 and December 31, 2021, respectively.

Prepaid expenses include prepayments

in cash for rent, insurance, pre-payments associated with the Company’s new office and software license fees which are being amortized

over the terms of the respective agreement.

The current portion consists of costs paid for future services which will occur within a

Currency Translation

Company’s reporting currency is U.S.

The accounts of one of the Company’s subsidiaries, GTC, is maintained using

The accounts of one of the Company’s subsidiaries, GTCL, is maintained using

the appropriate local currency, Great British Pound, as the functional currency.

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relevant translation rates are as follows:

for the three and nine months ended September 30, 2021, closing rate at 1.342642

GBP, quarterly average rate at 1.3784972

GBP and yearly average rate at 1.3853499

GBP, for the three and nine

months ended September 30, 2020, closing rate at 1.2923

for the three months ended March 31, 2022, closing rate at 1.3138 US$:

GBP, quarterly average

rate at 1.3419173 US$:

GBP, for the three months ended March 31, 2021, closing rate at 1.3783 US$:

GBP, quarterly average rate at 1.379068

GBP and yearly average rate of 1.271713 .

For the year ended December 31, 2020 closing rate at 1.260983

GBP, average rate at 1.260983

GBP, for the year ended 2021 closing rate at 1.353372 US$:

GBP, yearly average rate at 1.375083 US$:

Recognition and Unearned Revenue

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CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration

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as products are delivered or as services are provided over the term of the customer contract.

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

At September 30, 2021 and December

31, 2020, we had contract liabilities of $ 40,956 and $ 36,704 , respectively.

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

At March 31, 2022

and December 31, 2021, we had contract liabilities of approximately $ 30,364

and $ 36,765 ,

respectively.

of Product Sales and Services

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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.

Significant management judgment is

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

The Company recorded an impairment charge

of $ 0 and $ 0 , during the nine months ended September 30, 2021 and for the year ended December 31, 2020, respectively.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

and Equipment

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SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT

Office furniture and fixtures

Computer equipment

Rental equipment

Website development

expense for the three months ended September 30, 2021 and 2020 were $ 72,206

and $ 67,447 ,

respectively.

Depreciation expense for the nine months ended September 30, 2021 and 2020 were $ 206,654

and $ 199,242 ,

respectively.

furniture and fixtures

of long-lived assets

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The Company did not consider it necessary to record any impairment charges during the periods

ended September 30, 2021 and September 30, 2020, respectively.

ended March 31, 2022 and March 31, 2021, respectively.

for Derivative Instruments

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CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Based Compensation

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

March 31, 2022 and December 31, 2021, the Company had aggregated current and long-term operating lease liabilities of $ 11,045

and $ 19,763 ,

respectively, and right of use assets of $ 13,840

and $ 22,643 ,

respectively.

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

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

and Development

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related to both present and future products are expensed in the period incurred.

For the nine months ended September 30, 2021 and 2020,

there were no expenditures on research and development.

For the three months ended March 31, 2022 and the March

31, 2021, there were no

expenditures on research and development.

per Common Share

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In periods where the Company has a net loss, all dilutive securities are excluded.

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

following are dilutive common stock equivalents during the year ended:

SCHEDULE OF DILUTIVE COMMON STOCK EQUIVALENTS

September 30, 2021

September 30, 2020

Convertible notes payable (1)

Stock Options

Stock Warrants

were 0 and 1,152,411 shares of our common stock issuable upon conversion of $ 1,152,411 of Convertible Notes Payable at a conversion

rate of $ 1.00 per share, as of September 30, 2021 and 2020, not accounting for 9.99 % beneficial ownership limitation.

notes payable (1)

(1) 87,697 shares of

our common stock issuable upon conversion of $ 1,186,176 of Convertible Notes Payable as of March 31, 2021 not accounting for 4.99 % beneficial

ownership limitations.

Party Transactions

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its own separate interests is also a related party, (see Note 12).

Accounting Pronouncements

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Accounting Pronouncements

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 GBP:

USD using exchange rate close

for the nine months ended September 30, 2021, for liability of 1.3426420 or $ 34,286 .

An entity may choose to use either (1) its effective

date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application.

If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the

date of initial application and the effective date.

The entity must also recast its comparative period financial statements and provide

the disclosures required by the new standard for the comparative periods.

Consequently, financial information will not be updated, and

the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.

September 30, 2021, the Company had current and long-term operating lease liabilities of $ 27,801 and $ 0 , respectively, and right of use

assets of $ 30,658 .

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Pronouncements Recently Adopted

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.

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

3 unchanged sentences

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2 - INVENTORIES

September 30, 2021 and December 31, 2020, inventories consisted of the following:

March 31, 2022 and December 31, 2021, inventories consisted of the following:

SCHEDULE OF INVENTORIES

September 30, 2021

December 31, 2020

Finished goods

Less reserve for obsolete inventory

the nine months ended September 30, 2021 and the year ended December 31, 2020, the Company did not make any change for reserve for obsolete

reserve for obsolete inventory

the three months ended March 31, 2022 and the year ended December 31, 2021, the Company did not make any change for reserve for obsolete

3 – VAT RECEIVABLE

1 unchanged sentence

the EU, (“BREXIT”).

For the nine months ending September 30, 2021, the Company recorded a receivable in the amount of $ 446,657

for amounts available to reclaim against the tax liability from UK and EU countries.

Subsequently to September 30, 2021, the Company

has received a total of $ 174,402 , in regard to this receivable.

For the three months ended March 31, 2022 and the year ended December 31, 2021, the Company recorded

a receivable in the amount of $ 458,373

and $ 491,417 ,

respectively, for amounts available to reclaim

against the tax liability from UK and EU countries.

Subsequently to March 31, 2022, the Company has received a total of £ 33,978

or $ 44,640 ,

using an exchange rate close of 1.31380

GBP:USD, in regard to this receivable.

4 – PREPAID EXPENSES

expenses amounted to $ 8,653 at September 30, 2021 and $ 1,784 at December 31, 2020.

Prepaid expense includes prepaid rent of $ 6,169 , 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 amounted to $ 172,950 and $ 146,935 , at March 31, 2022 and December 31, 2021, respectively.

Prepaid expenses include prepayments

in cash for rent, insurance, pre-payments associated with the Company’s new office and software license fees which are being amortized

over the terms of the respective agreement.

The current portion consists of costs paid for future services which will occur within a

5 - PROPERTY AND EQUIPMENT

September 30, 2021 and December 31, 2020, property and equipment, net of fully depreciated assets, consisted of the following:

March 31, 2022 and December 31, 2021, property and equipment, net of fully depreciated assets, consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

September 30, 2021

December 31, 2020

Office furniture and fixtures

Computer equipment

Rental equipment

Website development

Property, Plant and Equipment, Gross

Less accumulated depreciation

furniture and fixtures

accumulated depreciation

( 1,583,609 )

( 1,502,501 )

expense for the three months ended September 30, 2021 and 2020 were $ 72,206

and $ 67,447 ,

respectively.

Depreciation expense for the nine months ended September 30, 2021 and 2020 were $ 206,654

and $ 199,242 ,

respectively.

expense was $ 93,319 and $ 67,450 for the three months ended March 31, 2022 and 2021, respectively.

For the year ended December 31, 2021,

depreciation expense was $ 292,102 .

6 – INTANGIBLE ASSETS

1 unchanged sentence

contracts from Global Telesat Corp.

(“Global Telesat”).

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, Global Telesat and World Surveillance Group,

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.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6 – INTANGIBLE ASSETS (continued)

in the purchased assets are:

(i) the rights and benefits granted to Global Telesat under each of the Globalstar Contracts, subject

to certain exclusions, (ii) account and online access to the Globalstar Cody Simplex activation system, (iii) Global Telesat’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 Global Telesat’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.

For the nine months ended September 30, 2021 and 2020, the Company

amortized $ 18,750 , respectively.

Future amortization of intangible assets is as follows:

For the three months ended March 31, 2022 and 2021, the Company

amortized $ 6,250 and $ 6,250 ,

respectively.

Future amortization of intangible

assets is as follows:

SCHEDULE OF FUTURE AMORTIZATION OF INTANGIBLE ASSETS

the nine months ended September 30, 2021 and 2020, there were no additional expenditures on research and development.

the three months ended March 31, 2022 and 2021, there were no additional expenditures on research and development.

7 - ACCOUNTS PAYABLE AND ACCRUED OTHER LIABILITIES

1 unchanged sentence

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED OTHER LIABILITIES

September 30, 2021

December 31, 2020

Accounts payable

Rental deposits

Customer deposits payable

VAT liability & sales tax payable

Pre-merger accrued other liabilities

Accrued interest

deposits payable

wages & payroll liabilities

liability & sales tax payable

accrued other liabilities

8 – LINE OF CREDIT

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

with Amazon Capital Services Inc.

The one-year term

loan is paid monthly, has an interest rate of

with late payment penalty interest of 11.72 %.

For the nine months ended September 30, 2021 and 2020, the Company recorded interest expense of $ 0

respectively.

The short-term line of credit balance as of September 30, 2021 and December 31, 2020, was $ 0

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9 – 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”).

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:

SCHEDULE OF EXCHANGE FOR CONVERSION OF PREFERRED SHARES FOR PROMISSORY NOTES

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

the periods ended September 30, 2021 and December 31, 2020, the Company repaid $ 121,848 and $ 0 of the notes, leaving a balance of $ 0

and $ 121,848 , respectively as short-term notes payable.

For the nine months ended September 30, 2021, the Company recorded interest in

relation to the note of $ 2,503 .

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10 – CONVERTIBLE NOTES PAYABLE

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”).

The March 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 is

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

The Company may not pre-pay or redeem the March 2021 Note other than as required by the Agreement.

The Noteholder have an optional right

of conversion such that a Noteholder may elect to convert his March 2021 Note, in whole or in part, outstanding as of such time, into

the number of fully paid and non-assessable shares of the Company’s common stock as determined by dividing the indebtedness under

the March 2021 Note price equal to the lesser of (a) $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:

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.

A “Qualified Transaction” refers the completion of the public offering of the Company’s

securities stock with gross proceeds of at least $ 10,000,000 pursuant to which the Company’s securities become registered pursuant

to Section 12(b) of the Securities Exchange Act of 1934, as amended, or a merger with a company listed on the Nasdaq or Canadian stock

exchanges, as amended.

The Noteholder is granted registration rights and pre-emptive rights.

In addition, the March 2021 NPA includes

customary events of default, including, among others:

(i) non-payment of amounts due thereunder, (ii) non-compliance with covenants thereunder,

(iii) bankruptcy or insolvency.

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.

The investor in the March 2021 Note is an

“accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

There were no discounts

or brokerage fees associated with this offering.

The Company used the offering proceeds for working capital and general corporate purposes.

balances of the Company’s convertible notes payable consist of the following:

SCHEDULE OF CONVERTIBLE NOTES PAYABLE

September 30,

May 2019 Notes

August 2020 Notes

December 2020 Notes

March 2021 Notes

Debt Discount

( 1,084,944 )

the nine months ended September 30, 2021 and 2020, we amortized the discount on the debt, to interest expense of $ 1,425,365

and $ 752,130 .

the nine months ended September 30, 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.

For the three

months ended September 30, 2020, the Company amortized discount on the debt, to interest expense of $ 348,563 , resulting in a balance

of unamortized discount notes payable of $ 427,329 .

the nine months ended September 30, 2020, the Holders converted $ 585,589

of the convertible debt to common stock, resulting

in an issuance of 597,657

common shares, 24,135

common shares

at the conversion rate of $ 0.50

per share and 573,522

common shares at the conversion rate of

The balance of the convertible notes at September 30, 2020, net of unamortized discount of $1,051,382, is $101,029.

other liabilities

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11 CORONA VIRUS LOANS

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

8 CORONAVIRUS LOANS

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

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

up to £ 250,000 .

On July 16, 2020 (the “Issue Date”), GTC, entered into a Coronavirus Interruption Loan Agreement (“Debenture”)

by and among the Company and HSBC UK Bank PLC (the “Lender”) for an amount of £ 250,000 ,

or USD $ 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 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

2 unchanged sentences

first repayment of £ 4,166.67

(exclusive of interest) will be made 13 month(s)

(exclusive of interest) was made 13 month(s)

after July 16, 2020.

7 unchanged sentences

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

As of September 30, 2021,

the Company has recorded $ 55,943

As of March 31, 2022, and

December 31, 2021, the Company has recorded $ 65,690

as current portion of notes payable and $ 218,967

as notes payable long term.

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 %.

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 , has been forgiven.

As of September

30, 2021, the Company has recorded $ 20,832 as gain on forgiveness of debt.

and $ 253,757

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.

9 - STOCKHOLDERS’ EQUITY

1 unchanged sentence

accompanying condensed 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

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

4 unchanged sentences

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 of the Company’s common stock,

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.

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

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.

The reverse split

was approved by FINRA on August 19, 2019.

May 28, 2021, the Company effected a reverse

stock split of its common stock at a ratio of 1-for-5 .

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.

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

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9 - STOCKHOLDERS’ EQUITY (continued)

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.

4 unchanged sentences

All information presented in this Quarterly Report on Form 10-Q,

other than in Company’s consolidated financial statements and the notes thereto 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 Quarterly Report on Form 10-Q have been adjusted to give effect to such assumed reverse stock split.

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 Quarterly Report on Form 10-Q have been adjusted

to give effect to such assumed reverse stock split.

on the Nasdaq Capital Market

May 28, 2021, our common stock and Warrants commenced trading on Nasdaq under the symbols “OSAT” and “OSATW,”

respectively.

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 per share.

As of March 31, 2022, and December 31, 2021, there were and 9,293,096 and 7,053,146 shares

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

of March 31, 2022, there were 3,333,333 shares of Preferred Stock authorized.

of March 31, 2022, there were no shares of Series A, B, C, D, E, F, G, H, I, J, K and L convertible preferred stock authorized, and no

shares issued and outstanding.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of September 30, 2021, the authorized capital of the Company consists of 50,000,000 shares of common stock, par value $ 0.0001 per share,

3,333,333 shares of preferred stock, par value $ 0.0001 per share.

of September 30, 2021, there were 3,333,333 shares of Preferred Stock authorized, none of which are issued and outstanding.

of September 30, 2021, there were 2,386,092 registered

warrants authorized to purchase of common stock 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 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 September 30, 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 nine months ended September 30, 2021 is

9 - STOCKHOLDERS’ EQUITY (continued)

of March 31, 2022, there were 2,836,092

registered warrants to purchase common

stock authorized of which 2,530,092

registered warrants were issued and outstanding,

at an exercise price of $ 5.00

and unregistered underwriter warrants of 144,000

issued and outstanding, at an exercise price

The warrants expire in June of 2026.

summary of the status of the Company’s total outstanding warrants and changes during the year ended December 31, 2021 and the three

months ended March 31, 2022 is as follows:

SCHEDULE OF OUTSTANDING STOCK WARRANTS ACTIVITIES

Average Exercise

Balance at January 1, 2021

Balance outstanding and exercisable at September 30, 2021

of September 30, 2021, and December 31, 2020, there were 2,530,092 and 800 warrants outstanding, respectively.

of September 30, 2021, there were 50,000,000 shares of common stock authorized and 6,469,263 shares issued and outstanding.

February 19, 2021, the Board of Directors of the Company unanimously adopted an amendment to the Company’s Articles of Incorporation

to effect a reverse stock split at a ratio of (i) no less than 1-for-2 shares of Common Stock, and (ii) no more than 1-for-5 shares of

Common Stock, the exact ratio to be determined in the sole discretion of the Board of Directors, at any time before August 31, 2021.

The Board of Directors has obtained (by written consent) the approval of the Company’s stockholders who, in the aggregate, own

2,686,337 shares of Common Stock, or 63.5 % of the outstanding shares of Common Stock of the Company prior to the reverse split action.

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.

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 24, 2021, the Company’s shareholders via majority shareholder consent authorized a stock split not to exceed 1 for 5 reverse

A definitive Information Statement relating to the shareholder consent was filed with the SEC on March 13, 2021.

The Company’s

Board of Directors subsequently approved a 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.

The common 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

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 .

May 27, 2021, Company issued an aggregate of 897,231

shares of common stock upon the conversion of

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 separately.

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.

The June 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 shares of the common stock for additional gross proceeds to the Company of

$ 2,155,680 .

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).

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

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.

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 2,763 options for the $ 1.00 exercise price and in connection with a 1,000 restricted stock award.

at January 1, 2021

outstanding and exercisable at December 31, 2021

at January 1, 2022

outstanding and exercisable at March 31, 2022

of March 31, 2022, there were 50,000,000 shares of common stock authorized and 9,293,096 shares issued and outstanding.

2022 Private Placement of Common Stock

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.

The purchase price for the common stock sold in the December Offering was $ 3.24 per share, the closing transaction price reported by

Nasdaq on December 31, 2021.

closing of the December Offering occurred on January 5, 2022.

The Company received gross proceeds from the sale of the common stock in

the December Offering of approximately $ 7.2 million.

The Company intends to use the proceeds from

the December Offering for general corporate purposes, including potential acquisitions and joint ventures.

Approximately 73 % of

funds raised in the December Offering were secured from existing shareholders and from the members of the Company’s senior management

and Board of Directors.

connection with the December Offering, the Company entered into a registration rights agreement with the December Investors (the “Registration

Rights Agreement”), pursuant to which, among other things, the Company agreed to prepare and file with the SEC a registration statement

to register for resale the shares of the Company’s common stock sold in the Offering.

shares of common stock offered and sold in the December Offering were sold in reliance on the exemption from registration provided by

Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act and corresponding provisions

of state securities or “blue sky” laws.

terms of the transaction disclosed above, including the provisions of the Purchase Agreement and Registration Rights Agreement, were

approved by the Board of Directors;

and because some of the securities were offered and sold to officers and directors of the Company,

such terms were separately reviewed and approved by the Audit Committee of the Board of Directors.

January 5, 2022, the Company issued 2,229,950

shares of common stock pursuant to a private

placement offering at a per share price of $ 3.24 ,

resulting in gross proceeds of $ 7,225,038 .

Legal and registration fees amounted to $ 220,000 ,

resulting in net proceeds of $ 7,005,038 .

Prior to the private placement close, proceeds of $ 1,400,000 , were received and recorded as a stock subscription payable, for the

year ended December 31, 2021.

January 21, 2022, the Company issued 10,000

shares of common stock in connection with restricted

stock awards, with a fair market value of $ 3.48

per share, on the date of issuance.

All shares were fully vested and upon issuance resulted in stock-based compensation of $ 34,800 .

Shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended,

as there was no general solicitation, and the transaction did not involve a public offering.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

Also 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.

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 issuance), volatility of 75.25 % ,

expected term of 5

years , and a risk-free interest rate of 0.28 % .

In connection with the above stock option grant, for the nine months ended September 30, 2021, the Company recorded stock-based compensation

of $ 1,053,064 .

summary of the status of the Company’s outstanding stock options and changes during the nine months ended September 30, 2021 is

SCHEDULE OF OUTSTANDING STOCK OPTIONS ACTIVITIES

9 - STOCKHOLDERS’ EQUITY (continued)

summary of the status of the Company’s outstanding stock options and changes during the three months ended March 31, 2022 is as

OF OUTSTANDING STOCK OPTIONS ACTIVITIES

Average Exercise

Balance at January 1, 2021

Balance outstanding at September 30, 2021

Options exercisable at September 30, 2021

August 24, 2021, in connection with Paul R.

Thomson employment as Executive Vice President, and currently Chief Financial Officer, and

as a material inducement to enter into the Thomson Agreement, Mr.

Thomson received a restricted stock grant of 25,000 shares of Common

Stock, 10,000 of which vest immediately, and the remaining 15,000 of which will vest at the rate of 5,000 shares at the end of each of

the next three annual anniversaries of his employment.

These equity awards to Mr.

Thomson were issued outside of a shareholder approved

stock or option plan pursuant to the Nasdaq “inducement grant” exception (Nasdaq Listing Rule 5635(c)(4)).

On October 7,

2021, the Board of Directors of the Company (the “Board”) appointed Paul R.

Thomson, the Executive Vice President of the

Company, to the additional position of Chief Financial Officer of the Company effective October 9, 2021.

on August 24, 2021, under the terms of the Ellenoff Agreement, Douglas Ellenoff, Chief Business Development Strategist, 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 were issued after the

execution of the Ellenoff Agreement and vest immediately, and the remaining 60,000

of which will be issued and vest at the rate

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;

These equity awards to

Ellenoff were material to induce Mr.

Ellenoff 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)).

connection to the above awards for the issuance of 50,000 common shares, the Company has recorded stock-based compensation of $ 268,500

for the nine months ended September 30, 2021, based on stock price of $ 5.37 per share (the closing price of the Company’s common

stock of the date of issuance).

the three and nine months ended September 30, 2021, the Company recorded total stock-based compensation for the awards

and options granted of $ 1,321,564 .

For the three and nine months ended September 30, 2020, the Company recorded stock-based compensation of $ 130,400 .

outstanding and excercisable at December 31, 2021

at January 1, 2022

outstanding and excercisable at March 31, 2022

10 - RELATED PARTY TRANSACTIONS

of September 30, 2021, the $ 67,273 due to related parties was comprised of;

accrued salary due to David Phipps of $ 17,227 ,

accrued salary and expenses due to Charles M.

Fernandez of $ 37,237 , accrued salary and expenses due to Sarwar Uddin, Theresa

Carlise and Paul Thomson of $ 3,771 , $ 3,740 and $ 5,298 , respectively.

Total related party payments due as of September 30, 2021,

and December 31, 2020, are $ 67,273 and $ 102,060 , respectively.

These related party payables were non-interest bearing and have been repaid

Company’s UK subsidiary, GTC has an over-advance line of credit with HSBC, for working capital needs.

The over-advance limit is

£ 25,000 or $ 33,566 at an exchange rate of 1.34262 , with interest at 3.95 % over Bank of England’s base rate or current rate

of 4.05 % variable.

The advance is guaranteed by David Phipps, the Company’s Chief Executive Officer.

The Company has an American

Express account for Orbital Satcom Corp.

and an American Express account for GTC, both in the name of David Phipps who personally guarantees

the balance owed.

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of March 31, 2022, the accounts payable due to related party includes advances for inventory and services due to David Phipps of $ 47,457

and Charles Fernandez of $ 7,588 .

Total related party payments due as of March 31, 2022 and December 31, 2021 were $ 55,045

and $ 35,308 ,

respectively.

Those related party payables are non-interest bearing and due on demand.

Company’s UK subsidiary, GTC had an over-advance line of credit with HSBC, for working capital needs, which was not renewed by

the Company on December 31, 2021.

The over-advance limit was £ 25,000

at an exchange rate of GBP:USD 1.353372 ,

with interest at 5.50 %

over Bank of England’s base rate or current rate of 6.25 %

The advance was guaranteed by David Phipps, the Company’s President and Chief Executive Officer of Global Operations.

The Company uses an American Express account for Orbital Satcom Corp and an American Express account for GTC, both in the name of David

Phipps who personally guarantees the balance owed.

Company employs three individuals who are related to Mr.

The individuals earned gross wages totaling $ 107,042 and $ 58,149 ,

for the nine months ended September 30, 2021 and 2020, respectively.

These three individuals earned gross wages totaling $ 33,078

for the three months ended March 31, 2022 and

2021, respectively.

11 - COMMITMENTS AND CONTINGENCIES

59 unchanged sentences

and, to some extent, global economic impact, including the current recession and any recession that may occur in the future.

success of our business depends on our global operations, including our supply chain and consumer demand, among other things.

of COVID-19, we have experienced shortages in inventory due to manufacturing issues, a reduction in the volume of sales in some parts

of our business, such as rental sales and direct website sales, and a reduction in personnel due to lockdown related issues.

of operations for the nine months ended September 30, 2021 and for the year ended December 31, 2020, reflect this impact;

expect that this trend may continue, and the full extent of the impact is unknown.

In recent months, some governmental agencies in the

US and Europe, where we produce the largest percentage of our sales, have lifted certain restrictions.

However, if customer demand continues

to be low, our future equipment sales, subscriber activations and sales margin will be impacted.

The success of our business depends

on our global operations, including our supply chain and consumer demand, among other things.

As a result of COVID-19, we have experienced

shortages in inventory due to manufacturing issues, a reduction in the volume of sales in some parts of our business, such as rental

sales and direct website sales, and a reduction in personnel due to lockdown related issues.

Our results of operations for the three

months ended March 31, 2022 and for the years ended December 31, 2021 and December 31, 2020, reflect this impact;

we expect that this trend may continue, and the full extent of the impact is unknown.

In recent months, some governmental agencies in

the US and Europe, where we produce the largest percentage of our sales, have lifted certain restrictions.

However, if customer demand

continues to be low, our future equipment sales, subscriber activations and sales margin will be impacted.

Compensatory Arrangements of Director

January 7, 2022, the Board appointed Rodney Barreto as a new director to the Board,

effective January 20, 2022.

No decision has been made with respect to the naming of Mr.

Barreto to any regular committees of the Board.

connection with Mr.

Barreto’s appointment to the Board, the Company executed a Director Services Agreement (the “Director

Agreement”) with Mr.

Barreto on January 11, 2022.

The Director Agreement has a two -year term (subject to the director’s nomination

and election) and provides for a cash retainer of $ 48,000 per year, plus an equity award of 20,000 shares of restricted stock, half of

which will be issued and vest on the day of grant, with the remaining half vesting and being issued on the first anniversary of the grant

The Director Agreement also contains customary confidentiality and indemnification provisions and require the Company to maintain

a specified amount of director and officer insurance.

There are no arrangements or understandings between Mr.

Barreto and any other person

pursuant to which Mr.

Barreto was selected as a director

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11 - COMMITMENTS AND CONTINGENCIES (continued)

Phipps Employment Agreement

On June 5, 2021, the Company

entered into a three year employment agreement with Mr.

Phipps that was effective as of June 2, 2021, (the “2021 Phipps

Employment Agreement”).

June 5, 2021, the Board caused the Company to enter into a new three-year employment

agreement with David Phipps, effective June 2, 2021 (“Phipps Agreement”).

The Phipps Agreement replaced his then

existing employment agreement and has an initial term of three years.

The Phipps agreement will be automatically extended

for additional one-year term thereafter unless terminated by the Company or Mr.

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

Phipps serves 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 is an aggregate of $ 350,000 .

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 herein or in any award certificate(s),

which shall supersede any conflicting provisions governing Share Awards provided under the equity incentive plan.

is required to pay or to reimburse Mr.

Phipps for all reasonable out-of-pocket expenses actually incurred or paid by him

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

Phipps will 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 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 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.

On August 7, 2021, the

Phipps Agreement was amended in order to, among other things, (i) change Mr.

Phipps’ title to “President of Orbsat

Corp and Chief Executive Officer of Global Operations” and (ii) to increase Mr.

Phipps’s compensation by providing for an

auto allowance $ 1,000

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

May Employment Agreement

Phipps is entitled to receive an annual cash bonus if the Company meets or exceeds criteria adopted by the Compensation

Committee of the Board of Directors (the “Compensation Committee”).

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 may from time to time determine (the “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 in the granting documents 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.

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.

Phipps will 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

The 2021 Phipps Employment 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 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.

On August 7, 2021, the 2021 Phipps Employment 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

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

Employment Agreements

May 23, 2021, the Company entered into a three (3) year Employment Agreement (the “May Agreement”) with Mr.

to serve as Chairman of the Board.

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

Fernandez’s employment

will commence on the later of our receipt of an approval for listing letter from Nasdaq and the effectiveness of the registration statement.

As compensation for services under the May Agreement, was to receive, in monthly installments during the Term, the

sum of $ 12,000 .

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 provides

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 personal catastrophe and disability insurance coverages for Mr.

Such insurance

shall be obtained through any insurance carrier of Mr.

Fernandez’s choosing, and shall have premium limits not to exceed one hundred

percent ( 100 % ) of Mr.

Fernandez’s Base Salary per annum.

In addition, Mr.

Fernandez will 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 Executives.

Under the agreement, the Company is also obligated to reimburse Mr.

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 Mr.

Fernandez, whether in connection with Mr.

Fernandez’s association

with the Company or otherwise.

In connection to the June Offering, the Company granted Mr.

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

Fernandez of 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 5 years effective on May 28, 2021.

The June Agreement replaced “the May Agreement”.

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 to serve as Chairman of the Board.

two weeks later on June 2, 2021, the Company entered

into a new employment agreement (the “June Agreement”) with Mr.

Fernandez, which superseded and replaced “the

May Agreement.” The June Agreement has an initial term of 5

years effective on May 28, 2021.

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.

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

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.

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 will supersede any conflicting provisions governing Share Awards provided under the equity incentive

Fernandez is entitled to receive an annual cash bonus if the

Company meets or exceeds criteria adopted by the Compensation Committee.

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.

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 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

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 is 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 June 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

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.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11 - COMMITMENTS AND CONTINGENCIES (continued)

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

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

Fernandez and/or his immediate family members, not to exceed $ 10,000

per fiscal year, regardless of whether or not

such expenses are incurred by Mr.

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.

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

Fernandez in connection with his employment with the Company.

4 unchanged sentences

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.

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

Fernandez of the securities granted to him pursuant

to the Restricted Stock Agreement.

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

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 by Mr.

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.

10 unchanged sentences

Employment Agreement

June 22, 2021, the Company appointed Sarwar Uddin as the Chief Financial Officer of the Company.

Uddin replaced Thomas Seifert, whose

employment by the Company terminated on the same date.

The initial term of Mr.

Uddin’s agreement is one year commencing on June

The term of the employment agreement will be automatically extended for additional one -year terms unless terminated by the

Company or Mr.

Uddin by written notice.

Uddin’s annual base compensation is $ 240,000 .

The Company may increase (but not decrease)

his compensation during its term.

In addition, Mr.

Uddin 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.

Uddin 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”).

The Company is required

to pay or to reimburse Mr.

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

Uddin in the course of his

employment, consistent with the Company’s policy.

Uddin shall 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 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.

On August 7, 2021, on the approval and recommendation of the Compensation

Committee of the Board of Directors of Orbsat Corp, the Company entered into an amendment to the current employment agreement to increase

Uddin’s compensation by providing for an allowance of $ 600 per month for the payment of medical plan coverage for Mr.

and his family.

October 4, 2021, Sarwar Uddin, the Chief Financial Officer of Orbsat Corp (the “Company”), notified the Company of his resignation

from all positions he holds with the Company.

Uddin’s resignation will be effective as of the close of business on October

Employment Agreement

June 22, 2021, the Company appointed Theresa Carlise, Controller, Treasurer and Secretary.

The initial term of Ms.

Carlise agreement

was one year.

The term of the employment agreement will be automatically extended for additional one-year terms unless terminated

by the Company or Ms.

Carlise by written notice.

Carlise’s annual base compensation is $ 180,000 .

The Carlise Agreement

provides for medical plan coverage and an auto allowance.

The Company may increase (but not decrease) her compensation during its

In addition, Ms.

Carlise 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.

Carlise 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”).

The Company is required to pay

or to reimburse Ms.

Carlise for all reasonable out-of-pocket expenses actually incurred or paid by Ms.

Carlise in the course of her employment,

consistent with the Company’s policy.

Carlise shall 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 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.

On August 7, 2021, on the approval and recommendation of the Compensation Committee of the

Board of Directors of Orbsat Corp, the Company entered into an amendment to the current employment agreement.

The Amendment for Ms.

amends her Employment Agreement in order to, among other things, change Ms.

Carlise’s title to “Chief Accounting Officer,

Secretary and Treasurer.

On October 8, 2021, on the approval and recommendation of the Compensation Committee, and following the subsequent

approval of the Board, the Company entered into an amendment to the Company’s current employment agreement with Theresa Carlise,

the Company’s Chief Accounting Officer, Treasurer and Secretary, to extend the initial term of her employment agreement from 1

year to 3 years (the “Carlise Amendment”).

Employment Agreement

August 24, 2021, Douglas S.

Ellenoff was appointed to the positions of Chief Business Development Strategist of Orbsat Corp (the “Company”)

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.

4 unchanged sentences

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 (the “Ellenoff Agreement”), that sets

forth the terms of his employment, including with regard to compensation.

Under the Ellenoff Agreement, Mr.

Ellenoff will be nominated

and renominated to serve on the Board during the term of the agreement.

Under the terms of the Ellenoff 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 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

and the Company entered into a three year Employment Agreement, dated August 24, 2021 (the “Ellenoff Agreement”).

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

Under the terms of the Ellenoff Agreement,

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

were 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 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

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

and (ii) options to purchase a total of 1,500,000

shares of the Company’s Common Stock, 300,000 of which were within 5 business days of the execution of the Ellenoff

Employment Agreement and 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);

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.

These equity awards to

Ellenoff were material to induce Mr.

Ellenoff 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)).

Ellenoff 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)).

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11 - COMMITMENTS AND CONTINGENCIES (continued)

Employment Agreement

June 22, 2021, the Company appointed Theresa Carlise as Controller, Treasurer and Secretary.

In connection with Ms.

appointment, Ms.

Carlise and the Company entered into an employment agreement (the “Carlise Agreement”) with an initial term

of one year The term of the Carlise Agreement will be automatically extended for additional one-year terms unless terminated

by the Company or Ms.

Carlise by written notice.

Carlise’s annual base compensation is $ 180,000 .

The Carlise Agreement provides for medical plan coverage and an auto allowance.

The Company may increase (but not decrease) her compensation

during its term.

In addition, Ms.

Carlise 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.

Carlise 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 Company is required to pay or to reimburse Ms.

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

Carlise in the course of her employment, consistent with the

Company’s policy.

Carlise shall 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

The Carlise 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 Carlise 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.

On August 7, 2021, on the approval and recommendation of the Compensation Committee, the Company entered

into the Carlise Agreement to, among other things, change Ms.

Carlise’s title to “Chief Accounting Officer, Secretary

and Treasurer.

On October 8, 2021, on the approval and recommendation of the Compensation Committee, and following the subsequent approval

of the Board, the Company entered into an amendment to Carlise, the Company’s

Chief Accounting Officer, Treasurer and Secretary, to extend the initial term of her employment agreement from 1

years (the “Carlise Amendment”).

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11 - COMMITMENTS AND CONTINGENCIES (continued)

Employment Agreement

August 24, 2021, Paul R.

4 unchanged sentences

Company (the “Thomson Agreement”).

The Thomson Agreement has an initial term of 3 years and will be automatically extended

for additional 1-year term unless terminated by the Company or Mr.

The Thomson Agreement has an initial term of three (3) years and will be automatically

extended for additional 1-year term unless terminated by the Company or Mr.

Thomson by written notice.

Thomson’s annual base compensation

is $ 250,000 .

Thomson’s annual base

compensation is $ 250,000 .

The Company may increase (but not decrease) his compensation during its term.

In addition, Mr.

Thomson will be entitled

to receive an annual cash bonus if the Company meets or exceeds criteria adopted by the Compensation Committee of the Board.

is also entitled to participate in any other executive compensation plans adopted by the Board 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”).

be entitled to receive an annual cash bonus if the Company meets or exceeds criteria adopted by the Compensation Committee of the Board.

Thomson is also entitled to participate in any other executive compensation plans adopted by the Board 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”).

connection with Mr.

Thomson’s employment, and as a material inducement to enter into the Thomson Agreements, Mr.

Thomson received

(i) immediately vested options to purchase 25,000 shares of Common Stock at a per share price of $5.35, and having a term of 5 years;

and (ii) a restricted stock grant of 25,000 shares of Common Stock, 10,000 of which vest immediately, and the remaining 15,000 of which

will vest at the rate of 5,000 shares at the end of each of the next three annual anniversaries of his employment.

These equity awards

Thomson were issued outside of a shareholder approved stock or option plan pursuant to the Nasdaq “inducement grant”

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

On October 7, 2021, the Board of Directors of the Company (the “Board”) appointed

Thomson, the Executive Vice President of the Company, to the additional position of Chief Financial Officer of the Company effective

October 9, 2021.

Thomson received (i) immediately vested options to purchase 25,000 shares of Common Stock at a per share price of $5.35, and having a

term of 5 years;

and (ii) a restricted stock grant of 25,000 shares of Common Stock, 10,000 of which vest immediately, and the remaining

15,000 of which will vest at the rate of 5,000 shares at the end of each of the next three annual anniversaries of his employment.

equity awards to Mr.

Thomson were issued outside of a shareholder approved stock or option plan pursuant to the Nasdaq “inducement

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

On October 7, 2021, the Board of Directors of the Company (the “Board”)

appointed Paul R.

Thomson, the Executive Vice President of the Company, to the additional position of Chief Financial Officer of the

Company effective October 9, 2021.

As Chief Financial Officer, Mr.

Thomson will also become the Company’s principal financial officer, effective

October 9, 2021.

Thomson became the Company’s principal financial officer,

effective October 9, 2021.

On October 8, 2021, on the approval and recommendation of the Compensation Committee of the Board (the “Compensation

3 unchanged sentences

effective October 9, 2021 (the “Thomson Amendment”).

July 24, 2019, a three-year lease was signed for 2,660 square feet for £ 25,536 annually, for our facilities in Poole, England for

£2,128 per month, or $ 2,717 per month at the yearly average conversion rate of 1.276933 , or $ 2,738 using exchange rate close at

December 31, 2020 of 1.286618 .

The lease has been renewed until July 23, 2022 .

June 21, 2021, the Company entered into a lease agreement for office space in Aventura, FL.

The term of the lease commenced on June 23,

2021 and has a minimum six-month term.

The monthly rent for this office space is $ 1,210 .

The lease agreement can be terminated

with 60 days’ notice.

On October 31, 2021, the lease for the office space, as described above, was terminated as of November

leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees.

expenses generally represent the Company’s share of the landlord’s operating expenses.

The Company does not have any leases

classified as financing leases.

August 12, 2021, the Company entered into a new lease agreement for 2,070 square feet of office space in Miami, FL.

The term of the lease

will be 62 months, at an average of $ 8,347 per month, to commence upon possession once the facility is completed in early spring 2022.

The Company has paid a security deposit of $ 38,706 and $ 6,869 in prepaid rent.

September 30, 2021, the Company had current and long-term operating lease liabilities of $ 27,801 and $ 0 , respectively,

and right of use assets of $ 30,658 .

rent expense for the nine months ended September 30, 2021 and 2020 were $ 36,055 and $ 24,182 , respectively.

Employment Agreement

October 7, 2021, the Board appointed Andrew Cohen as Senior Vice President of Operations of the Company, effective October 8, 2021.

connection with Mr.

Cohen’s appointment, the Company entered into an employment agreement, dated October 8, 2021 (the “Cohen

Agreement”), that sets forth the terms of his employment.

Cohen Agreement has an initial term of three ( 3 ) years and will be automatically extended for additional 1-year terms unless terminated

by the Company or Mr.

Cohen by written notice.

Cohen’s annual base compensation is $ 250,000 .

The Company may increase (but

not decrease) his compensation during its term.

In addition, Mr.

Cohen will be entitled to receive an annual cash bonus if the Company

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

Cohen is also entitled to participate in any other

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

plans as the Compensation Committee may from time to time determine.

The Company is required to pay

or to reimburse Mr.

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

Cohen in the course of his employment,

consistent with the Company’s policy.

Cohen will 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 Cohen Agreement may be terminated based on, among other things, the death or disability of Mr.

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

The Cohen Agreement also contains certain provisions

that are customary for agreements of this nature, including, without limitation, non-competition and non-solicitation covenants.

connection with Mr.

Cohen’s employment, and as a material inducement to enter into the Cohen Agreement, Mr.

Cohen received (i)

immediately vested options to purchase 25,000 shares of Common Stock at a per share price of $5.35, and having a term of 5 years;

(ii) a restricted stock grant of 25,000 shares of Common Stock, 10,000 of which vest immediately, and the remaining 15,000 of which will

vest at the rate of 5,000 shares at the end of each of the next three annual anniversaries of his employment.

These equity awards to

Cohen were issued outside of a shareholder approved stock or option plan pursuant to the Nasdaq “inducement grant” exception

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

December 2, 2021, the Company entered into a 62-month lease for 4,141 square feet of office space for $ 186,345 annually.

The rent increases

3 % annually.

The space is not available for occupancy until the second quarter of 2022, at which time rent will commence, as well as

adjusting the right of asset and the corresponding operating lease liability to include this lease.

July 24, 2019, a three-year lease was signed for 2,660 square feet for £ 25,536 annually, for our facilities in Poole, England,

“UK lease”, for £ 2,128 per month, or USD $ 2,856 per month at the yearly average conversion rate of 1.3419173.

lease will expire July 2022 and we may seek to expand to a larger facility.

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

Variable expenses generally represent the Company’s share of the landlord’s operating expenses.

The Company does not have

any leases classified as financing leases.

Amortization expenses

for the three months ended March 31, 2022, and 2021 were $ 8,803 and $ 7,563 , respectively.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11 - COMMITMENTS AND CONTINGENCIES (continued)

March 31, 2022, the Company had current and long-term operating lease liabilities of $ 11,045 and right of use assets of $ 13,840 .

rent expense for the three months ended March 31, 2022 and 2021 were $ 8,516

and $ 6,384 ,

respectively.

June 22, 2021, Thomas Seifert’s employment as the Company’s Chief Financial Officer was terminated for cause.

3 unchanged sentences

prior service with the Company or arising under any employment agreement.

Further, the Company asserts that Mr.

Seifert engaged in misconduct

during his tenure as the Company’s CFO.

Seifert’s employment as Chief Financial Officer has resulted in two lawsuits.

Company initiated litigation against Mr.

Seifert on June 28, 2021 in the Eleventh Judicial Circuit Court in and for Miami-Dade County.

The parties to the suit are Orbsat Corp.

and Thomas Seifert.

The matter was designated Case No.:

2021-15243 CA 01.

The Company’s

case against Mr.

Seifert is now pending in the United States District Court for the Southern District of Florida, which matter is designated

1:21-cv-22436-DPG.

The Company seeks damages under several legal theories, including breach of fiduciary duty, breach of an

employment agreement, fraud in the inducement, fraudulent misrepresentation, and constructive fraud.

The Company does not expect to obtain

substantial monetary relief in its litigation against Mr.

July 2, 2021, Mr.

Seifert filed suit against the Company in the United States District Court for the Southern District of Florida.

parties to the suit are Thomas Seifert, Orbsat Corp.

and Charles Fernandez, Orbsat’s Chairman and Chief Executive Officer.

matter is designated Case No.:

1:21-cv-22410-MGC.

Seifert seeks damages under several legal theories, including breach of an employment

agreement, retaliatory discharge, libel per se, and negligent misrepresentation.

The Company believes it has adequate defenses to defeat

Seifert’s claims.

The Company and Mr.

Seifert are currently engaged in litigation

over the matter of his employment and termination.

The Company believes it has adequate defenses to Mr.

Seifert’s claims and has

advanced claims against Mr.

Seifert including, but not limited to, breach of the employment agreement, breach of the fiduciary, fraud

in the inducement in connection with the employment agreement, fraudulent misrepresentation, and constructive fraud.

The Company does

not expect to seek substantial monetary relief in the litigation.

time to time, the Company may become involved in litigation relating to claims arising out of our operations in the normal course of

2 unchanged sentences

which would reasonably be likely to have a material adverse effect on the Company’s business, financial condition and operating

12 - CONCENTRATIONS

accounted for 45.9 % and 53.6 % of the Company’s revenues during the three months ended March 31, 2022 and 2021, respectively.

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

CORP AND SUBSIDIARIES

ORBITAL TRACKING CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

15 - CONCENTRATIONS

accounted for approximately 64.0 % and 60.1 % of the Company’s revenues during the nine months ended September 30, 2021 and 2020,

respectively.

For the three months ended September 30, 2021 and 2020, Amazon accounted for approximately 64.8 % and 64.9 %, respectively

of the Company’s revenue.

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

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

months ended September 30, 2021 and 2020.

SCHEDULE OF CONCENTRATION RISK

September 30, 2021

September 30, 2020

Satcom Global

Globalstar Europe

Network Innovations

Cygnus Telecom

12 – CONCENTRATIONS (continued)

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

months ended September 30, 2021 and 2020.

September 30, 2021

September 30, 2020

months ended March 31, 2022 and 2021.

SCHEDULE OF CONCENTRATION RISK

Satcom Global

Globalstar Europe

Network Innovations

Cygnus Telecom

following table sets forth revenue as to each geographic location, for the nine months ended September 30, 2021 and 2020:

following table sets forth revenue as to each geographic location, for the three months ended March 31, 2022 and 2021:

SCHEDULE OF REVENUE FROM EACH GEOGRAPHIC LOCATION

following table sets forth revenue as to each geographic location, for the three months ended September 30, 2021 and 2020:

September 30, 2021

September 30, 2020

North America

South America

Asia & Pacific

13 - SUBSEQUENT EVENTS

October 4, 2021, Sarwar Uddin, the Chief Financial Officer of Orbsat Corp (the “Company”), notified the Company of his resignation

from all positions he holds with the Company.

Uddin’s resignation will be effective as of the close of business on October

October 7, 2021, the Board of Directors of the Company (the “Board”) appointed Paul R.

Thomson, the Executive Vice President

of the Company, to the additional position of Chief Financial Officer of the Company effective October 9, 2021.

As Chief Financial Officer,

Thomson will also become the Company’s principal financial officer, effective October 9, 2021.

On October 8, 2021, on the approval

and recommendation of the Compensation Committee of the Board (the “Compensation Committee”), and following subsequent approval

of the Board, the Company entered into an amendment to the Company’s current employment agreement with Mr.

Thomson to reflect his

new title of “Executive Vice President and Chief Financial Officer” effective October 9, 2021 (the “Thomson Amendment”).

October 7, 2021, the Board appointed Andrew Cohen as Senior Vice President of Operations of the Company, effective October 8, 2021.

connection with Mr.

Cohen’s appointment, the Company entered into an employment agreement, dated October 8, 2021 (the “Cohen

Agreement”), that sets forth the terms of his employment.

Cohen Agreement has an initial term of 3 years and will be automatically extended for additional 1 year terms unless terminated by the

Company or Mr.

Cohen by written notice.

Cohen’s annual base compensation is $ 250,000 .

The Company may increase (but not decrease)

his compensation during its term.

In addition, Mr.

Cohen will be entitled to receive an annual cash bonus if the Company meets or exceeds

criteria adopted by the Compensation Committee of the Board.

In connection with Mr.

Cohen’s employment, and as a material inducement

to enter into the Cohen Agreement, Mr.

Cohen received (i) immediately vested options to purchase 25,000 shares of Common Stock at a per

share price of $5.35, and having a term of 5 years;

and (ii) a restricted stock grant of 25,000 shares of Common Stock, 10,000 of which

vest immediately, and the remaining 15,000 of which will vest at the rate of 5,000 shares at the end of each of the next three annual

anniversaries of his employment.

These equity awards to Mr.

Cohen were issued outside of a shareholder approved stock or option plan

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

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 Charles M.

Fernandez, the Company’s Executive Chairman and Chief

Executive Officer, and David Phipps, a director and the Company’s President and Chief Executive Officer of Global Operations.

Monthly Bonus payments were approved in recognition of Messrs.

Fernandez’s and Phipps’ contributions to the Company.

Monthly Bonus payments will be made retroactively for months passed since June 2021, and the plan for Monthly Bonus payments will

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

Fernandez and Phipps.

October 8, 2021, on the approval and recommendation of the Compensation Committee, and following the subsequent approval of the Board,

the Company entered into an amendment to the Company’s current employment agreement with Theresa Carlise, the Company’s Chief

Accounting Officer, Treasurer and Secretary, to extend the initial term of her employment agreement from 1 year to 3 years (the “Carlise

October 21, 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.

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

following information should be read in conjunction with the condensed consolidated financial statements and the notes thereto contained

elsewhere in this report.

Statements made in this Item 2, “Management’s Discussion and Analysis and Plan of Financial Condition

and Results of Operations,” and elsewhere in this quarterly report on Form 10-Q that do not consist of historical facts, are “forward-looking

statements.” Statements accompanied or qualified by, or containing words such as “may,” “will,” “should,”

“believes,” “expects,” “intends,” “plans,” “projects,” “estimates,”

“predicts,” “potential,” “outlook,” “forecast,” “anticipates,” “presume,”

and “assume” constitute forward-looking statements, and as such, are not a guarantee of future performance.

The statements

involve factors, risks and uncertainties, the impact or occurrence of which can cause actual results to differ materially from the expected

results described in such statements.

Risks and uncertainties can include, among others, fluctuations in general business cycles and

changing economic conditions;

changing product demand and industry capacity;

increased competition and pricing pressures;

technology that can reduce the demand for the Company’s products, as well as other factors, many or all of which may be beyond

the Company’s control.

Consequently, investors should not place undue reliance upon forward-looking statements as predictive of

future results.

The Company disclaims any obligation to update the forward-looking statements in this report.

should read the following information in conjunction with our financial statements and related notes contained elsewhere in this report.

You should consider the risks and difficulties frequently encountered by early-stage companies, particularly those engaged in new and

rapidly evolving markets and technologies.

Our limited operating history provides only a limited historical basis to assess the impact

that critical accounting policies may have on our business and our financial performance.

encourage you to review our periodic reports filed with the SEC and included in the SEC’s EDGAR database, including the Annual

Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 31, 2022, and the Company’s subsequent public

filings with the SEC.

Corp, formerly Orbsat Corp (“NextPlat”), is a Nevada corporation.

Our headquarters and principal executive offices are located

at 3250 Mary St., Suite 410, Coconut Grove, FL 33133.

Our telephone number is (305) 560-5355, and our corporate website is www.nextplat.com .

Unless the context requires otherwise, in this report the terms “the Company,” “we,”

“us,” and, “our” refer to NextPlat and our wholly owned subsidiaries .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements