What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-16 compared with 2021-11-15 · 272 added, 430 removed, 171 unchanged (80% of the section changed)

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, 2020, filed with the SEC on March 22, 2021, and the Company’s subsequent public

filings with the SEC.

are a provider of satellite-based hardware, airtime and related services both in the United States and internationally.

We sell equipment

and airtime for use on all of the major satellite networks including Globalstar, Inmarsat, Iridium and Thuraya and operate a short-term

rental service for customers who desire to use our equipment for a limited time period.

Our acquisition of GTC in February 2015 expanded

our global satellite-based infrastructure and business, which was first launched in December 2014 through the purchase of certain contracts.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) a global pandemic prompting

43 unchanged sentences

and limitations on the ability of our customers to pay us in a timely manner.

These events could have a material, adverse effect on our results of operations, cash flows and liquidity.

These events may have a material, adverse effect on our results of operations, cash flows and liquidity.

ultimate magnitude of COVID-19, including the full extent of the material negative impact on our financial and operational results, will

14 unchanged sentences

that may occur in the future.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

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

1 unchanged sentence

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 the year ended December 31, 2020 reflect this impact;

however, 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.

We have implemented several measures

to minimize the impact on our operations and sustain our liquidity position, including receiving support through the US payroll protection

program loan (“PPP”), a low interest, fixed rate loan provided under the UK’s Coronavirus Business Interruption Loan

(“CBILS”) and the deferral of certain UK taxes.

Reverse Stock Split

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.

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.

The effective time of

the reverse stock split was 12:01 a.m.

ET on May 28, 2021.

The Company’s common stock began trading on a split-adjusted basis commencing

upon market open on May 28, 2021.

The common stock has been assigned a new CUSIP number, 68557F 209.

The warrants were assigned the CUSIP

number, 68557F 118.

No fractional shares of common stock were issued as a result of the reverse stock split.

Stockholders of record

who would otherwise be entitled to receive a fractional share received a whole share.

on the Nasdaq Capital Market

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

respectively.

Public Offering

May 28, 2021, Company, entered into an 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 (the June 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 common stock and warrants were immediately separable and were issued

The common stock and warrants began trading on the Nasdaq Capital Market, on May 28, 2021, under the symbols “OSAT”

and “OSATW,” respectively.

In addition, the Company granted the Underwriter a 45-day option to purchase an additional 432,000

shares of common stock and/or warrants to purchase up to an aggregate of 432,000 shares of common stock, in any combination thereof,

at the public offering price per security, less the underwriting discounts and commissions, to cover over-allotments, if any.

Offering closed on June 2, 2021.

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.

Agreement with Alibaba

July 13, 2021, the Company announced that its Global Telesat

Communications Limited (“GTC”) unit had entered into an agreement with Alibaba.com, the B2B (Business-to-Business)

e-commerce website owned and operated by Alibaba Group Holding Limited, also known as Alibaba Group (NYSE:

9988), a Chinese

multinational technology company specializing in e-commerce, retail, internet, and technology.

GTC will be a Gold-level Supplier on Alibaba.com ,

the world’s largest Business-to-Business (B2B) e-commerce website.

the agreement, GTC significantly expands its 24/7/365 e-commerce presence with the launch of its latest global storefront.

Orbsat expects

to launch its new storefront during the third quarter with an extensive range of satellite IoT and connectivity products.

include Orbsat’s specialized satellite tracking products, some of which operate using the Company’s many ground station-based

network processors, and can be used to track and monitor the location of cars, trucks, trailers, boats, containers, animals, and

other remote assets.

Orbsat’s full catalog of 500+ products and connectivity services will be available on Alibaba.com by the start

of the first quarter of 2022.

The Company will pay an annual fee of $5,999 under the agreement.

The agreement will continue on a

year-to-year basis.

Equity Issuances

On 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.

On 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.

On 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

On 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.

On 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.

of operations for the year ended December 31, 2020 reflected this impact.

Recently, some governmental agencies in the US and Europe,

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

We have incurred strong increases in sales outside

of our Amazon marketplaces for the three months ended March 31, 2022.

However due to uncertainties related to variants of COVID-19, we

are uncertain as to the continuation of the increases to revenue.

beyond our current global network of online storefronts serving thousands of consumers, enterprises, and governments, we intend to develop

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

Our new platform

(“NextPlat Digital”), which is currently in the design and development phase in collaboration with consultants and contracted

developers, will initially enable the use of non-fungible tokens (“NFTs”), in e-commerce and in community-building activities.

NextPlat Digital may in the future also enable the posting and use of other digital or “crypto” assets once applicable legal

and regulatory requirements are addressed.

As currently contemplated, NextPlat Digital will facilitate the creation/minting, purchase

and sale of a broad range of non-yield-generating and non-fractionalized NFT products, including, but not limited to, art, music, collectables,

digital real estate, video games, game items and certificates of authenticity.

We also anticipated developing and deploying NFTs for

use in tokenizing data for use in brand loyalty programs.

Digital, as currently planned, will be used by us to create both (a) public marketplaces, for us and third-parties, where anyone with

a crypto wallet or credit card can buy an NFT from an authorized user, or, if authorized, sell their own NFTs, and (b) private market

places that only allow a particular company or entity to sell their own NFTs within a branded market (such as for the promotion of a

particular brand or product).

We anticipate that NextPlat Digital will be substantially complete within the next six to nine months.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

determining if and how an NFT can be posted on our platform, we will follow an internally developed model that will permit us to make

a risk-based assessment regarding the likelihood that a particular NFT could be deemed a “security” within the meaning of

federal securities laws.

This process will involve employees trained to identify the indicia of a “security” who

will also work with outside legal counsel experienced in crypto asset regulatory matters to make a determination with respect to each

NFT, or category of NFT, proposed to be posted on our platform.

These processes and procedures are risk based assessments and are not

a legal standard or binding on regulators or courts.

In the event an NFT or other digital asset is deemed by us, pursuant to the above

analysis, to possess a reasonable likelihood of being deemed a security, we will (a) comply with applicable laws and regulations by forming,

acquiring or engaging a licensed broker-dealer authorized to act as an trading system for those digital assets, or (b) transact in such

digital assets offshore in a way that complies with applicable laws and regulations;

or (c) not transact in the subject NFT.

currently intend to undertake or participate in “initial coin offerings”, the minting of “coins” or cryptocurrencies.

creation and operation of NextPlat Digital will also present a number of new regulatory and legal compliance obligations for the Company.

For example, if we are deemed to be involved in the exchange or transmission of value that substitutes for currency, or fall under other

evolving requirements, we may be deemed to be a “money transmitter” and will be subject to Anti-Money Laundering (AML) rules,

as well as U.S.

Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) requirements and state licensing requirements.

In connection with complying with applicable regulations and laws (including Know-Your-Customer (KYC), Anti-Money Laundering (AML) and

Combating the Financing of Terrorism (CFT) regulations) when onboarding new users, we intend to utilize third-party tools to proactively

screen for high-risk wallets, including explicitly sanctioned addresses and addresses associated with sanctioned entities.

The applicable

requirements and our compliance obligations will vary depending on the nature of the client, the service or product provided and jurisdiction.

For example, if we form or acquire a broker dealer in order to post, trade or sell NFTs or other digital assets that are securities,

we will fully comply with all applicable KYC, AML and CFT compliance requirements.

If, on the other hand, we facilitate the distribution

of free promotional corporate collectable NFTs that are not deemed to be securities, our compliance requirements will be significantly

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.

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

2022 Name Change

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.

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.

Resource Planning System (ERP)

August 10, 2021, the Company signed an agreement with NetSuite to purchase and implement an enterprise resource planning ERP system to

replace our legacy business applications.

The new ERP platform will provide better support for our changing business needs and plans

for future growth.

April 1, 2022, the Company went live with its implementation of an enterprise resource planning “ERP” system to replace our

legacy business applications.

The new ERP platform will provide better support for our changing business needs and plans for future growth.

The project includes software, external implementation assistance, testing, training, and support.

The entire cost

of the ERP software and implementation will be deferred until 2022.

We anticipate that approximately 40% of the cost will be expensed

in the period incurred and 60% will be capitalized and depreciated over its useful life.

of Operations for the Three and Nine months Ended September 30, 2021, compared to the Three and Nine months Ended September 30, 2020

Net Sales for the nine months ended September 30, 2021, consisted primarily of sales of satellite phones, tracking devices, accessories

and airtime plans.

For the nine months ended September 30, 2021, revenues generated were $5,667,966 compared to $4,163,750 of revenues

for the nine months ended September 30, 2020, an increase in total revenues of $1,504,216 or 36.1%.

Total net sales for Global Telesat

Communications Limited were $3,897,254 for the nine months ended September 30, 2021, as compared to $2,667,144 for the nine months

ended September 30, 2020, an increase of $1,230,110 or 46.1%.

Total net sales for Orbital Satcom Corp.

were $1,770,712 for the nine months

ended September 30, 2021, as compared to $1,496,606, for the nine months ended September 30, 2020, an increase of $274,106 or 18.3%.

The Company attributes the changes in revenue to new product lines and significant increases in US Amazon sales, offset by the change

in exchange rates from GBP:USD.

sales for the three months ended September 30, 2021, consisted primarily of sales of satellite phones, tracking devices, accessories

and airtime plans.

For the three months ended September 30, 2021, revenues generated were $2,250,278 compared to $1,475,393 of revenues

for the three months ended September 30, 2020, an increase in total revenues of $774,885 or 52.5%.

Total net sales for Global Telesat

Communications Limited.

were $1,498,341 for the three months ended September 30, 2021, as compared to $1,003,875 for the three

months ended September 30, 2020, an increase of $494,466 or 49.3%.

Total net sales for Orbital Satcom Corp.

were $751,937 for the three

months ended September 30, 2021 as compared to $471,518, for the three months ended September 30, 2020, an increase of $280,419 or 59.5%.

During the nine months ended September 30, 2021, cost of sales increased to $4,195,823 compared to $3,159,593,

for the nine months ended September 30, 2020, an increase of $1,036,230 or 32.8%.

Gross profit margins during the nine months ended September

30, 2021 were 26.0% as compared to 24.1% for the comparable period in the prior year.

During the three months ended September 30, 2021,

cost of sales increased to $1,757,142 compared to $1,076,929, for the three months ended September 30, 2020, an increase of $680,213

Gross profit margins during the three months ended September 30, 2021, were 21.9% as compared to 27.0% for the comparable

period in the prior year.

As indicated by the results for the three and nine months, our sales margins have (decreased) increased by

(5.1%) and 1.9%, respectively.

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

The increase is primarily

due to a greater percentage of high margin sales in the second quarter ended September 30, 2021, as compared to the same period in 2020,

as well to as an increase in margins on certain sales that resulted from customers bearing value added tax (VAT) that was previously

borne by the Company.

Total operating expenses for the nine months ended September 30, 2021 were $4,557,254, an increase of $2,698,242

or 145.14%, from total operating expenses for the nine months ended September 30, 2020 of $1,859,012 .

Total operating expenses

for the three months ended September 30, 2021 were $2,729,982, an increase of $1,857,147or 212.77%, from total operating expenses for

the three months ended September 30, 2020 of $872,835 .

Factors contributing to the decrease are described below.

general and administrative expenses were $962,892 and $486,984 for the nine months ended September 30, 2021 and 2020, respectively,

an increase of $475,908 or 97.73%.

Selling, general and administrative expenses were $519,196 and $182,813 for the three months ended

September 30, 2021 and 2020, respectively, an increase of $336,383 or 184.00%.

The increase, for the three and nine months ended September

30, 2021, is attributable to certain variable expenses which are related to increase in sales such bank charges, credit card fees, Amazon

fees, and shipping charges that fluctuate with sales volatility, in combination with increased travel, medical and director and officer

insurance and auto expenses related to the increase in personnel, in addition to marketing and information technology expenses related

wages and payroll taxes were $1,178,267 and $542,675 for the nine months ended September 30, 2021 and 2020, respectively, an

increase of $635,592, or 117.12%.

Salaries, wages and payroll taxes were $490,555 and $196,629 for the three months ended September 30,

2021, and 2020, respectively, an increase of $293,926, or 149.48%.

For the three and nine months ended September 30, 2021, the increase

is attributable to an increase in officers from two to six and an increase in overall personnel to support growth, as well as board approved

executive bonuses related to successful up-listing to Nasdaq for the nine months ended September 30, 2021.

based compensation were $1,321,564 and $130,400 for the three and nine months ended September 30, 2021 and 2020, respectively,

an increase of $1,191,164, or 913.47%.

The increase is directly related to employment agreements for two additional officers, during

the three months ended September 30, 2021.

fees were $869,127 and $480,961 for the nine months ended September 30, 2021 and 2020, respectively, an increase of $388,166,

Professional fees were $320,211 and $289,296 for the three months ended September 30, 2021 and 2020, respectively, an increase

We anticipate that approximately 40%

of the cost will be expensed in the period incurred and 60% will be capitalized and depreciated over its useful life.

The Company intends

to maintain dual accounting systems, until such time it is deemed acceptable.

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

As of March 31, 2022, there were

2,836,092 registered warrants to purchase common stock authorized and 2,530,092 registered warrants issued and outstanding, at

an exercise price of $5.00, and 144,000 unregistered underwriter warrants issued and outstanding, at an exercise price

The warrants expire in June of 2026.

As 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.

We had net cash used in

operations of $868,558 during the three months ended March 31, 2022.

At March 31, 2022, we had working capital of $22,766,775.

Additionally, at March 31, 2022, we had an accumulated deficit of $22,836,298 and stockholder’s equity of $23,705,244.

of Operations for the Three Months Ended March 31, 2022 compared to the Three Months Ended March 31, 2021

for the three months ended March 31, 2022, consisted primarily of sales of satellite phones, tracking devices, accessories, and airtime

For the three months ended March 31, 2022, revenues generated were $3,577,778 compared to $1,461,428 of revenues for the three

months ended March 31, 2021, an increase in total revenues of $2,116,350 or 144.8%.

Total sales for Global Telesat Communications Ltd.

were $2,595,840 for the three months ended March 31, 2022, as compared to $1,013,435 for the three months ended March 31, 2021, an increase

of $1,582,405 or 156.1%.

The increase during the three and nine months ended September 30, 2021 as compared to the same period in

2020, is attributable to an increase in board members, increased investor relations and other professional fees to assist in capital

raising efforts as well as up-listing to Nasdaq.

and amortization expenses were $225,404 and $217,992 for the nine months ended September 30, 2021 and 2020, respectively, an

increase of $7,412 or 3.40%.

Depreciation and amortization expenses were $78,456 and $73,697 for the three months ended September 30,

2021 and 2020, respectively, an increase of $4,759 or 6.45%.

The increase was primarily attributable to the addition of fixed

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

Total sales for Orbital Satcom Corp.

were $981,938 for the three months ended March 31, 2022 as compared to

$447,993, for the three months ended March 31, 2021, an increase of $533,945 or 119.2%.

The Company attributes the changes in

revenue to new product lines, increased inventory, and additional e-commerce storefronts.

Cost of Sales .

During the three months ended March 31, 2022, cost of revenues increased to $2,776,685 compared to $1,023,911, for the three months

ended March 31, 2021, an increase of $1,752,774 or 171.2%.

Gross profit margins during the three months ended March 31, 2022 were 22.4%

as compared to 29.9% for the comparable period in the prior year.

The decrease is primarily due to a lower percentage of high margin sales

int the first quarter ended March 31, 2022 as compared to the same period in 2021.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Total operating expenses for the three months ended March 31, 2022, were $1,635,708, an increase of $899,262

or 122.1%, from total operating expenses for the three months ended March 31, 2021, of $736,446 .

Factors contributing to the decrease

are described below.

Selling, general and administrative

expenses were $574,350 and $175,890 for the three months ended March 31, 2022 and 2021, respectively, an increase

of $398,460 or 226.5%.

The fluctuations in the increase, for the three months ended March 31, 2022, are attributable to

certain SG&A expenses that fluctuate with sales volatility, as well as, an increase in marketing expenses, stock-based compensation,

D&O and medical insurance, recruiting expenses and other costs associated with an increase in personnel.

Salaries, wages and payroll

taxes were $635,576 and $208,174, for the three months ended March 31, 2022 and 2021, respectively, an increase of $427,402, or

The increase is a result of an increase in personnel, for the three months ended March 31, 2022.

fees were $326,213 and $292,882 for

the three months ended March 31, 2022 and 2021, respectively, an increase of $33,331, or 11.4%.

The increase during the

three months ended March 31, 2022 as compared to the same period in 2021, is attributable to increase in director fees, accounting and

legal fees, offset by a reduction in professional fees related to the public offering from the quarter ended March 31, 2021.

and amortization expenses were $99,569 and $73,700 for the three months ended March 31, 2022 and 2021, respectively, an increase

of $25,869 or 35.1%.

The increase was primarily attributable to the addition of fixed assets offset by fully amortized assets, as compared

to the same period in the prior year.

expect our expenses in each of these areas to continue to increase during fiscal 2022 and beyond as we expand our operations and begin

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Similarly, we are unable at this time to estimate the amount of the expected

Other (Income) Expense .

Our total other expense (income) were $1,481,974 compared to $503,890 during the nine months ended

September 30, 2021 and 2020, respectively, an increase of $978,084 or 194.11%.

The increase in the nine months ended September 30, 2021,

as compared to the prior year, is attributable to;

increases in interest expense of $666,179, interest earned of $3,066 and exchange

rate fluctuations of $34,749 and decreases in gain from extinguishment of debt of $248,429 and other income of $31,793.

total other expense was $68,703 compared to $626,080 during the three months ended September 30, 2021 and 2020, respectively.

of $557,377 for the three months ended September 30, 2021, as compared to the prior year, is attributable to a decrease in interest expense

$639,075, an increase of exchange rate fluctuations of $84,509, offset by interest earned of $3,079.

We recorded net loss before income tax of $2,305,549 and $4,567,085 for the three and nine months ended September 30, 2021

as compared to a net loss of $1,100,451 and $1,358,745, for the three and nine months ended September 30, 2020.

The increase in the loss

is a result of the factors as described above.

Other Expense .

Our total other expenses were $15,468 compared to $504,213 during the three months ended March 31, 2022

and 2021, respectively, a decrease of $488,745.

The decrease is attributable to interest expense incurred in the same period of the prior

We recorded net loss before income tax of $850,083 for the three months ended March 31, 2022 as compared to a net loss

of $803,142, for the three months ended March 31, 2021.

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

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Comprehensive

Income (Loss) .

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

September 30, 2021 of $55,584 and $42,850.

For the three and nine months ended September 30, 2020 we recorded a

gain of $5,602 and a loss of $19,840.

Gain (Loss) .

We recorded a loss for foreign currency translation adjustments for the three months ended March 31, 2022

of $15,330 and a gain of $1,611 for the three months ended March 31, 2021.

The fluctuations of the increase/decrease are primarily attributed

to the increase/decrease recognized due to exchange rate variances.

and Capital Resources

is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate

on an ongoing basis.

At September 30, 2021, we had a cash balance of $17,138,644.

Our working capital is a positive $17,768,275

at September 30, 2021.

current assets at September 30, 2021 increased $17,640,784 or 1,285% from December 31, 2020 and included cash, accounts receivable,

VAT receivable, prepaid expenses, unbilled revenue, inventory and other current assets.

current liabilities at September 30, 2021 decreased $271,549 or 18% from December 31, 2020 and included our accounts payable, due to

related party, provision for income taxes, contract liabilities, lease liabilities and other liabilities in the ordinary course of our

September 30, 2021, the Company had an accumulated deficit of $18,445,638, positive working capital of approximately $17,768,275

and net loss of approximately $4,567,085 during the nine months ended September 30, 2021.

For the year ended December 31, 2020, the auditors’

opinion contained a going concern paragraph, which stated that the Company had an accumulated deficit of $13,878,553, negative working

capital of $144,055 and net loss of $2,763,375, during the year ended December 31, 2020.

As 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.

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.

cash flows used by operating activities for the nine months ended September 30, 2021 amounted to $2,997,644 and were primarily

attributable to our net loss of $4,567,085, total amortization expense of $18,750 and depreciation of $206,654, amortization of discount

on debt of $1,425,365, amortization of right to use of $24,948 gain on extinguishment of debt of $20,832, stock based compensation of

$1,321,564 and net change in assets and liabilities of $1,421,208, primarily attributable to an increase in accounts receivable

of $132,808, an increase in inventory of $621,487, an increase in unbilled revenue of $22,353, an increase in VAT receivable of

$446,657, an increase in other current assets of $728, decrease in accounts payable of $168,557, an increase in contract liabilities

of $4,252, a decrease in lease liabilities of $24,898, and an increase in provision for income taxes of $37,603.

cash flows provided by operating activities for the nine months ended September 30, 2020 amounted to $504,800 and were primarily

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

on debt of $752,130, stock based compensation of $130,400, stock issued for services of $62,750, amortization on right to use of $23,773, gain on extinguishment of debt of $269,261 and net change in assets and liabilities

of $63,839, primarily attributable to a decrease in accounts receivable of $81,739, an increase in inventory of $135,648, decrease in

prepaid expenses of $16,812, a decrease in unbilled revenue of $877, a decrease in other current assets of $57,800, decrease in accounts

payable of $61,747, a decrease in contract liabilities of $780, a decrease in lease liabilities of $21,562, and a decrease in provision

for income taxes of $1,330.

cash flows used in investing activities were $95,598 and $30,752 for the nine months ended September 30, 2021 and 2020, respectively.

During the nine months ended September 30, 2021 and September 30, 2020, we purchased property and equipment of $95,598 and $30,752, respectively.

cash flows provided by financing activities were $19,466,289 for the nine months ended September 30, 2021 and were for, proceeds

a convertible note payable of $350,000, related party payable of $34,238, the June Offering, of $14,649,573, proceeds of warrant

exercise of $4,629,540 which was offset by repayments of notes payable for $121,848, proceeds of options exercised of $5,000,

payments of coronavirus interruption loan of $11,189 and repayments to related party payable of $69,025.

cash flows provided by financing activities were $1,296,333 for the nine months ended September 30, 2020 and were for

proceeds from convertible notes payable of $958,000, proceeds from note payable of $343,907, proceeds from exercise of options

of $33,000, offset by repayments to related party payable of $18,889 and repayments of line of credit for

At March 31, 2022, we had a cash balance of $21,907,935.

Our working capital is $22,766,775 at March 31, 2022.

current assets at March 31, 2022 increased 26% from December 31, 2021 and included cash, accounts receivable, prepaid expenses, unbilled

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

current liabilities at March 31, 2022 decreased 38.6% from December 31, 2021 and included our accounts payable, due to related party,

provision for income taxes, contract liabilities, lease liabilities and other liabilities in the ordinary course of our business.

At March 31, 2022, the Company

had an accumulated deficit of $22,836,298, working capital of $22,766,775 and net loss of $850,083 during the three months ended March

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 existing financial resources are sufficient to continue

operating activities for at least one year past the issuance date of the financial statements.

Net cash flows used by operating

activities for the three months ended March 31, 2022 amounted to $868,558 and were primarily attributable to our net loss of $850,083,

total amortization expense of $6,250 and depreciation of $93,319, amortization of right of use of $8,803, stock based compensation of

$34,800 and net change in assets and liabilities of $161,647, primarily attributable to an increase in accounts receivable of

$70,307, an increase in inventory of $453,496, a decrease in unbilled revenue of $8,278, an increase in prepaid expense of $26,232, a

decrease in VAT receivable of $33,044, a decrease in other current assets of $48,539, an increase in accounts payable of $352,201, a

decrease in contract liabilities of $6,401, a decrease in lease liabilities of $8,718, and decrease in provision for income taxes of

cash flows used by operating activities for the three months ended March 31, 2021 amounted to $459,764 and were primarily attributable

to our net loss of $803,142, total amortization expense of $6,250 and depreciation of $67,250, amortization of discount on debt of $501,164,

increase in stock based compensation of $14,200, a decrease in right of use of $7,563 and net change in assets and liabilities

of $253,249, primarily attributable to an increase in accounts receivable of $94,176, an increase in inventory of $239,490, an increase

in unbilled revenue of $2,067, , an increase in other current assets of $19,195, increase in accounts payable of $114,261, a decrease

in contract liabilities of $5,157, a decrease in lease liabilities of $7,589, and an increase in provision for income taxes of $164.

cash flows used in investing activities were $67,997 and $459 for the three months ended March 31, 2022 and 2021, respectively.

During the three months ended March 31, 2022 and March 31, 2021, we purchased property and equipment of $0 and $459, respectively.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Net cash flows provided by financing

activities were $5,608,353 and $289,131 for the three months ended March 31, 2022 and 2021, respectively.

Net cash flows provided

by financing activities were $5,608,353 for the three months ended March 31, 2022 and were primarily attributed to proceeds from

common stock offering of $5,605,038, proceeds from related party of $19,737 and offset by repayments of notes payable for $16,422.

cash flows provided by financing activities were $289,131 for the three months ended March 31, 2021 and were for proceeds from a convertible

note payable of $350,000 and offset by repayments of notes payable for $60,643.

Sheet Arrangements

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which we have

obligation under a guarantee contract, although we do have obligations under certain sales arrangements including purchase obligations

obligation under a guaranteed contract, although we do have obligations under certain sales arrangements including purchase obligations

retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit,

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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.

of Presentation and Principles of Consolidation

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in consolidation.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

receivable and allowance for doubtful accounts

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

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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 2021, there were no allowances for doubtful

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.

and Development

Company accounts for research and development costs in accordance with the Accounting Standards Codification subtopic 730-10, Research

and Development (“ASC 730-10”).

Under ASC 730-10, all research and development costs must be charged to expense as incurred.

Accordingly, internal research and development costs are expensed as incurred.

Third-party research and development costs are expensed

when the contracted work has been performed or as milestone results have been achieved.

Company-sponsored research and development costs

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

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

there were no additional expenditures on research and development.

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

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

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 US$:

GBP, quarterly average rate at 1.3784972 US$:

GBP and yearly average rate at 1.3853499 US$:

GBP, for the three and nine months

ended September 30, 2020, closing rate at 1.2923 US$:

GBP, quarterly average rate at 1.293173 US$:

GBP and yearly average rate of 1.271713.

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

GBP, average rate

at 1.260983 US$:

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

GBP, average rate at 1.375083 US$:

Recognition and Unearned Revenue

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the Company has not incurred significant expenses for warranties.

Equipment sales which have been prepaid, before the goods are shipped

are recorded as contract liabilities and once shipped is recognized as revenue.

The Company also records as contract liabilities, certain

annual plans for airtime, which are paid in advance.

Once airtime services are incurred, they are recognized as revenue.

Unbilled revenue

is recognized for airtime plans whereby the customer is invoiced for its data usage the following month after services are incurred.

Company’s customers generally purchase a combination of our products and services as part of a multiple element arrangement.

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This assessment has a significant impact on the amount and timing of revenue recognition.

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

which we expect to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that the Company

determines are within the scope of ASC 606, we perform the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify

the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance

obligations in the contract;

and (v) recognize revenue when (or as) we satisfy a performance obligation.

The five-step model is applied

to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services transferred

to the customer.

At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services

promised within each contract and determine those that are performance obligations and assess whether each promised good or service is

We then recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation

when (or as) the performance obligation is satisfied.

recognize revenue in accordance with Accounting Standards Codification (“ASC”) 606, :

Narrow-Scope Improvements and Practical

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

(2) permit an

entity to exclude amounts collected from customers for all sales (and other similar) taxes from the transaction price;

(3) specify that

the measurement date for noncash consideration is contract inception;

(4) provide a practical expedient that permits an entity to reflect

the aggregate effect of all modifications that occur before the beginning of the earliest period presented when identifying the satisfied

and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price to the satisfied and

unsatisfied performance obligations;

(5) clarify that a completed contract for purposes of transition is a contract for which all (or

substantially all) of the revenue was recognized under legacy GAAP before the date of initial application, and (6) clarify that an entity

that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required to disclose the effect of the accounting

change for the period of adoption.

The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim

periods within those fiscal years.

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

Company provides product warranties with varying lengths of time and terms.

The product warranties are considered to be assurance-type

in nature and do not cover anything beyond ensuring that the product is functioning as intended.

Based on the guidance in ASC 606, assurance-type

warranties do not represent separate performance obligations.

The Company also sells separately priced maintenance service contracts

which qualify as service-type warranties and represent separate performance obligations.

The Company has historically experienced a low

rate of product returns under the warranty program.

variety of technical services can be contracted by our customers for a designated period of time.

The service contracts allow customers

to call the Company for technical support, replace defective parts and to have onsite service provided by the Company’s third-party

contract service provider.

The Company records revenues for contract services at the amount of the service contract, but such amount

is deferred at the beginning of the service term and amortized prorated over the life of the contract.

Company believes that its products and services can be accounted for separately as its products and services have value to the Company’s

customers on a stand-alone basis.

When a transaction involves more than one product or service, revenue is allocated to each deliverable

based on its relative fair value;

otherwise, revenue is recognized as products are delivered or as services are provided over the term

of the customer contract.

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

At September 30, 2021, we had contract

liabilities of approximately $40,956.

At December 31, 2020, we had contract liabilities of approximately $36,704.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

and Equipment

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

Office furniture and fixtures

Computer equipment

Rental equipment

Website development

furniture and fixtures

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

These assets are amortized over 10 years.

Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are tested for impairment whenever events

or changes in circumstances indicate that the carrying amount may no longer be recoverable.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

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 December 31, 2020, respectively.

value of financial instruments

Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value

on a recurring basis.

ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of

fair value measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date.

Additionally, ASC 820 requires the use of valuation techniques that maximize the

use of observable inputs and minimize the use of unobservable inputs.

These inputs are prioritized below:

Observable inputs such as quoted market prices in active markets for identical assets or liabilities

Observable market-based inputs or unobservable inputs that are corroborated by market data

Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

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

value in accordance with the accounting guidance.

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

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

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

for Derivative Instruments

are required to be recorded on the balance sheet at fair value.

These derivatives, including embedded derivatives in the Company’s

structured borrowings, are separately valued and accounted for on the Company’s balance sheet.

Fair values for exchange traded

securities and derivatives are based on quoted market prices.

Where market prices are not readily available, fair values are determined

using market-based pricing models incorporating readily observable market data and requiring judgment and estimates.

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

in accordance with the accounting guidance.

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

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

cost relating to share-based payment transactions are recognized in the financial statements.

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the vesting period of the equity award).

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

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 1.3828 or $35,311.

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.

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

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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 2. Management’s Discussion and Analysis