What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-15 compared with 2022-05-16 · 1004 added, 484 removed, 770 unchanged (66% of the section changed)

1 unchanged sentence

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.

or “our”), for the three and six months ended June 30, 2022 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.

CORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS AS OF

receivable, net

expenses – current portion

current assets

June 30, 2022

December 31, 2021

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

Accounts receivable, net

Unbilled revenue

VAT receivable

Prepaid expenses – current portion

Other current assets

Total current assets

Property and equipment, net

Intangible assets, net

Prepaid expenses – long term portion

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

term liabilities:

payable Coronavirus loans– long term

Stockholders’

Stock, $ 0.0001 par value;

Accounts payable and accrued liabilities

Contract liabilities

Note payable Coronavirus loans– current portion

Due to related party

Lease liabilities - current

Provision for income taxes

Stock subscription payable

Liabilities from discontinued operations

Total current liabilities

Long term liabilities:

Note payable Coronavirus loans– long term

Lease liabilities - long term

Total Liabilities

Stockholders’ Equity:

Preferred Stock, $ 0.0001 par value;

3,333,333 shares authorized

stock, ($ 0.0001 par value;

50,000,000 shares authorized, 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

Common stock, ($ 0.0001 par value;

50,000,000 shares authorized, 9,293,096 shares issued and outstanding as of June 30, 2022 and 7,053,146 outstanding at December 31, 2021, respectively)

Additional paid-in capital

Accumulated (deficit)

( 24,492,159 )

( 21,986,215 )

other comprehensive income (loss)

stockholders’ equity

liabilities and stockholders’ equity

Accumulated other comprehensive income (loss)

Total stockholders’ equity

Total liabilities and stockholders’ equity

the accompanying notes to the unaudited condensed consolidated financial statements.

2 unchanged sentences

COMPREHNSIVE LOSS

general and administrative

wages and payroll taxes

and amortization

Three Months Ended

June 30, 2022

Three Months Ended

June 30, 2021

Six Months Ended

June 30, 2022

Six Months Ended

June 30, 2021

Three Months Ended

June 30, 2022

Three Months Ended

June 30, 2021

Six Months Ended

June 30, 2022

Six Months Ended

June 30, 2021

Cost of sales

Operating expenses:

before other expenses and income taxes

currency exchange rate variance

Selling, general and administrative

Salaries, wages and payroll taxes

Professional fees

Depreciation and amortization

Total operating expenses

Loss before other expenses and income taxes

( 1,533,249 )

( 2,367,864 )

Comprehensive

(loss) income:

Other (income) expense

Gain on debt extinguishment

Interest earned

Interest expense

Foreign currency exchange rate variance

Total other (income) expense

$ ( 1,655,861 )

$ ( 1,458,394 )

currency translation adjustments

Comprehensive

$ ( 2,505,944 )

$ ( 2,261,536 )

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.

CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

the Three Months Ended March 31, 2022

December 31, 2021

Provision for income taxes

( 1,655,861 )

of common related to offering

of common related to restricted stock award

Comprehensive

March 31, 2022

( 1,458,394 )

the Three Months Ended March 31, 2021

December 31, 2020

( 2,505,944 )

common stock from convertible debt

of common related to restricted stock award

conversion feature of convertible debt

Comprehensive

March 31, 2021

( 2,261,536 )

accompanying notes to unaudited condensed consolidated financial statements.

Comprehensive Income:

( 1,655,861 )

( 1,458,394 )

( 2,505,944 )

( 2,261,536 )

Foreign currency translation adjustments

Comprehensive loss

$ ( 1,660,649 )

$ ( 1,472,739 )

$ ( 2,526,062 )

$ ( 2,274,270 )

NET LOSS INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

Weighted number of common shares outstanding – basic & diluted

Basic and diluted net loss per share

the accompanying notes to the unaudited condensed consolidated financial statements.

CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

the Three Months Ended March 31, 2022

the Six Months Ended June 30, 2022

$0.0001 Par Value

Comprehensive

Stockholders’

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

Income (Loss)

Balance, December 31, 2021

$ ( 21,986,215 )

Issuance of common related to offering

Issuance of common related to restricted stock award

Stock based compensation in relation to restricted stock award

Comprehensive loss

( 2,505,944 )

Balance, June 30, 2022

$ ( 24,492,159 )

the Six Months Ended June 30, 2021

$0.0001 Par Value

Comprehensive

Stockholders’

December 31, 2020

common stock from convertible debt

of common related to restricted stock award

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 for services

Beneficial conversion feature of convertible debt

Comprehensive loss

( 2,261,536 )

Balance, June 30, 2021

$ ( 16,140,089 )

the Three Months Ended June 30, 2022

$0.0001 Par Value

Comprehensive

March 31, 2021

Stockholders’

Income (Loss)

Balance, March 31, 2022

$ ( 22,836,298 )

Stock based compensation in relation to restricted stock award

Comprehensive loss

( 1,655,861 )

Balance, June 30, 2022

$ ( 24,492,159 )

the Three Months Ended June 30, 2021

$0.0001 Par Value

Comprehensive

Stockholders’

Income (Loss)

Balance, March 31, 2021

$ ( 14,681,695 )

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 warrant

Comprehensive loss

( 1,458,394 )

Balance, June 30, 2021

$ ( 16,140,089 )

accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THE THREE MONTHS ENDED

FLOWS FROM OPERATING ACTIVITIES:

THE SIX MONTHS ENDED

June 30, 2022

June 30, 2021

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 2,505,944 )

$ ( 2,261,536 )

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

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

Depreciation expense

Amortization of intangible asset

Amortization of convertible debt, net

Amortization of right to use

Stock based compensation

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

( 1,888,252 )

( 1,270,837 )

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 (repayments) to note payable, related party, net

Proceeds from common stock offering

Proceeds from warrant offering

Repayments to note payable Coronavirus loans

Proceeds from exercise of warrant

Repayment of note payable

Net cash provided by financing activities

Effect of exchange rate on cash

Net increase (decrease) 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

Recognition of operating lease liability

Conversion of convertible debt into common shares

the accompanying notes to the unaudited condensed consolidated financial statements.

8 unchanged sentences

statements not misleading.

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.

The consolidated financial statements as of December 31, 2021, have been audited

by an independent registered public accounting firm.

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

consolidated financial statements have been derived from the audited financial statements of 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

The unaudited financial statements for the three and six months ending June 30, 2022, are not necessarily

indicative of the results for the remainder of the fiscal year.

The consolidated financial statements as of December 31, 2021, have been

audited by an independent registered public accounting firm.

The accounting policies and procedures employed in the preparation of these

condensed consolidated financial statements have been derived from the audited financial statements of 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.

4 unchanged sentences

The consolidated financial statements of the Company include the Company and its wholly-owned subsidiaries,

Orbital Satcom Corp.

and Global Telesat Communications Ltd.

All material intercompany balances and transactions have been eliminated

in consolidation.

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.

Orbital Satcom Corp, Global Telesat Communications Ltd and NextPlat B.V.

All material intercompany balances and transactions have been

eliminated in consolidation.

the e-commerce experience of the Company’s management team and the Company’s existing e-commerce platforms, the Company has

embarked upon the rollout of a state-of-the-art e-commerce platform to collaborate with businesses to optimize their ability to sell

their goods online, domestically, and internationally, and enabling customers and partners to optimize their e-commerce presence and

revenue, which we expect will become the focus of the Company’s business in the future.

Historically, the business of NextPlat

has been, the provision of a comprehensive array of Satellite Industry communication services, and related equipment sales.

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 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).

This new 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.

Storefronts and E-Commerce Platforms

operate two e-commerce websites offering a range of MSS products and solutions through our subsidiaries, Orbital Satcom, which targets

customers in North and South America, and GTC which targets customers in the UK, EU, Middle East, Asia and rest of the world.

These websites

produce sales and attract enquiries from customers and potential customers from all around the world.

Over the long term, we plan to

develop additional country-specific websites to target customers in South America, Asia and Europe where we anticipate there will be

substantial further demand for our products.

addition to our two main e-commerce websites, we make portable satellite voice, data and tracking solutions easier to find and buy online

through our various third-party e-commerce storefronts such as Alibaba, Amazon and Walmart.

We currently operate 25 storefronts across

various countries in 5 continents.

We have invested in personnel to translate our listings correctly in the different countries we are

represented in and intend to regularly improve and increase our listings on all e-commerce sites.

We currently have more than 9,000 product

listings on all third-party sites and invest significantly in inventory to hold at Amazon’s various fulfillment centers around

the world to ensure that orders are shipped to customers as quickly as possible.

The products include handheld satellite phones, personal

and asset tracking devices, portable high-speed broadband terminals, and satellite Wi-Fi hotspots.

Our Amazon Marketplaces represented

approximately 49.5 % and 64.6 % of the Company’s revenues during the six months ended June 30, 2022 and 2021, respectively.

years ended December 31, 2021 and 2020, Amazon online marketplaces represented approximately 63.6 % and 73.3 % of total sales, respectively.

We anticipate that these marketplaces will continue to represent a significant portion of our sales for the foreseeable future.

Our e-commerce

storefronts enable us to attract a significantly diversified level of sales from all over the world, ensuring we are not overly reliant

on any single market or sector for our sales revenue.

Furthermore, many products we sell require subscription-based services which allow

us to increase our recurring revenue airtime sales.

consumer behavior drastically changing because of COVID-19, e-commerce traffic witnessed double-digit gains in 2021 and 2020, respectively,

as stores closed and shoppers used digital options.

This significant change in consumer shopping habits resulted in a substantial increase

of U.S., EU and U.K.

consumers electing to shop online.

During 2021, senior management of the Company determined to invest in a comprehensive

systems upgrade project which commenced in September with the goal of building a state-of-the-art e-commerce platform.

This implementation

is anticipated to be substantially complete within the next six to nine months, and the Company intends to collaborate with businesses

to optimize their ability to sell their goods online, domestically, and internationally, and enabling customers and partners to optimize

their e-commerce presence and revenue.

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

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 anticipate 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.

legal status of NFTs under a myriad of state and federal laws and regulatory regimes (including securities, banking, and commodities

laws) is highly uncertain and unresolved, and the applicability of various of those regimes to any NFTs that we may propose to post on

our platform is also unresolved.

Our creation and operation of NextPlat Digital will present a number of new regulatory and legal compliance

obligations for the Company.

As an initial matter we will need to make a determination whether a particular NFT could reasonably be considered

a security for federal and state law purposes, and if so we would be required to comply with the applicable securities registration requirements

or obtain comfort that our activities would fall within applicable exemptions from registration.

To the extent that we determine that

a particular NFT could be deemed a “security” within the meaning of the U.S.

federal and/or securities laws, we intend to

obtain contractual comfort from licensed broker-dealer authorized to act as a trading system for those digital assets that such broker-dealer

will comply with the applicable “Know Your Customer” (“KYC”) rules and custom and practice, as well as with the

applicable Anti-Money Laundering laws and regulations (“AML”) and Combating the Financing of Terrorism (“CFT”),

administered and enforced by the U.S.

Treasury Financial Crimes and Enforcement Network discussed below, among others.

We may have legal

exposure for any alleged failures on the part of such licensed broker-dealer to fulfil its obligations under its contracts with us.

respect to the securities status of an NFT that we propose to post to 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 the U.S.

federal and/or state securities laws in determining if and how an NFT can be posted on our platform.

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.

We expect our risk assessment policies will continuously

evolve to take into account developments in case law, applicable facts, developments in technology, and changes in applicable regulatory

do not currently intend to undertake or participate in “initial coin offerings”, the minting of “coins” or the

mining of cryptocurrencies.

of a particular NFT’s status as a security, we will need to assess whether we needed to comply with other applicable regulations

and laws (including but not limited to AML and CFT regulations).

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 AML and CFT regulations.

Depending on the particular attributes of an NFT, the manner in which it is marketed, and

the nature of the clientele, we could be subject to other legal and regulatory regimes as well.

We will endeavor to comply with all applicable

laws in connection with our NextPlat Digital business, but the uncertain application of those laws to our proposed business may create

substantial risk to the Company.

onboarding new users, we intend to utilize third-party tools to proactively screen for high-risk crypto wallets, including explicitly

sanctioned addresses and addresses associated with sanctioned entities.

Crypto wallets protect the identity of the owner of the wallet,

store the owner’s private keys, secure and provide access by the owner to the cryptocurrency owned by it and allow the owner to

send, receive, and transact business with cryptocurrencies.

Such wallets by their nature obfuscate the identity of the owner of the wallet

and limit access to the transaction history of that wallet and its owner.

Consequently, crypto wallets and cryptocurrencies may be used

by persons seeking to avoid legal oversight and to violate the law.

For example, they can be used to launder money and to promote terrorism.

The applicable legal 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 engage, form or acquire a broker dealer in order to post, trade or sell NFTs or other digital

assets that are securities, we will attempt to fully comply with all applicable KYC, AML and CFT compliance requirements.

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 less.

In either event there can be no assurance that our efforts to fully comply with applicable law

will be successful.

determining to engage in transactions in an NFT, we will attempt to comply with all applicable laws.

However, given the substantial legal

uncertainties that may presented by those laws and given the informational constraints presented by crypto wallets we may not be successful

in our efforts.

As a consequence, we may be exposed to regulatory enforcement and civil or criminal sanction should a legal authority

determine that our approach is inadequate or inappropriate, as well as to claims asserting civil liability.

Moreover, governmental agencies

may seek to apply laws to our NextPlat Digital business that we believe are inapplicable and may seek sanctions relating to our alleged

failure to comply with those laws.

Communications

our Global Telesat Communications Ltd and Orbital Satcom Corp business units, we provide Mobile Satellite Services (“MSS”)

solutions to fulfill the growing global demand for satellite-enabled voice, data, personnel and asset tracking, Machine-to-Machine (M2M)

and Internet of Things (IoT) connectivity services.

We provide these solutions for businesses, governments, military, humanitarian organizations,

and individual users, enabling them to communicate, connect to the internet, track and monitor remote assets and lone workers, or request

SOS assistance via satellite from almost anywhere in the world, even in the most remote and hostile of environments.

provide voice, data communications, IoT and M2M services via Geostationary and Low Earth Orbit (“LEO”) satellite constellations

and offer reliable connectivity in areas where terrestrial wireless or wireline networks do not exist or are limited, including remote

land areas, open ocean, airways, the polar regions and regions where terrestrial networks are not operational, for example due to political

conflicts and natural or man-made disasters.

have expertise and long-term experience in providing tracking and monitoring services via satellite, specifically through the Globalstar

Low Earth Orbit satellite network.

We own unique network infrastructure devices, known as appliqués, which are located in various

Globalstar ground stations around the world and provide the signal receipt and processing technology that enables and powers the Globalstar

simplex data service.

Our ownership of these appliqués provides us with competitive access to the global simplex data service

which addresses the market demand for a small and cost-effective solution for sending data, such as geographic coordinates, from assets

or individuals in remote locations to a central monitoring station and is used in numerous applications such as tracking vehicles, asset

shipments, livestock, and monitoring unattended remote assets.

In addition, we also provide tracking and monitoring solutions using Automatic

Identification System (AIS), 2G-5G, Push-to-Talk and two-way radio technology.

generate revenue from both the provision of services and the sale of equipment.

Higher margin recurring service revenue from the sale

of monthly, annual, and prepaid airtime or messaging plans has historically represented an increasing proportion of our revenue, and

we expect that trend to continue as we introduce new products requiring associated airtime or messaging plans.

provide our products and services directly to end users and reseller networks located both in the United States and internationally through

our subsidiaries, U.S.

based Orbital Satcom Corp (“Orbital Satcom”) and U.K.

based Global Telesat Communications Limited

We have a physical presence in the United States and the United Kingdom, as well as an ecommerce storefront presence

in 16 countries across 5 continents.

We have a diverse geographical customer base having provided solutions to more than 50,000 customers

located in more than 165 countries across most every continent in the world.

MSS products rely on satellite networks for voice, data and tracking connectivity and thus are not reliant on cell towers or other local

infrastructure.

As a result, our MSS solutions are suitable for recreational travelers and adventurers, government and military users,

and corporations and individuals wishing to communicate or connect to the internet from remote locations, or in the event of an emergency

such as a power outage, following a hurricane or other natural disaster during which regular cell phone, telephone and internet service

may not be available.

satellite communications products enable users to make voice calls, send and receive text messages and emails, and transmit GPS location

coordinates from virtually anywhere on the planet, no matter how remote the location and regardless of the availability of local communication

infrastructure.

Our range of satellite data products allow users around the world to connect to the internet, stream live video, and

communicate via voice and data applications.

are a provider of GPS enabled emergency locator distress beacons that can save lives, on land and at sea.

Our distress beacons enable

essential communication between our customers and search and rescue organizations during emergency situations and pinpoint locational

information to Search and Rescue services, essential during an emergency.

provide a wide range of satellite tracking devices used to monitor the location, movements, and history of almost anything that moves.

We specialize in offering satellite tracking services through the Globalstar satellite network and have supplied tens of thousands of

tracking devices which are used around the world to locate lone workers, track shipping containers, livestock, vehicles, and vessels

along with many other types of assets.

first product launched by the Company, SolarTrack, is a compact, lightweight, IoT tracking device powered by the sun and operating on

one of the most modern satellite networks in the world.

It is designed for tracking and monitoring anything that moves, or any remote

asset used outdoors, almost anywhere in the world and we anticipate strong demand from customers looking for a low cost, low maintenance

tracking device to monitor remote assets.

and Tracking Portal

advanced subscription-based mapping and tracking portal, GTCTrack, is available for use by registered customers who pay a monthly fee

to access it.

This mapping portal provides a universal and hardware-agnostic, cloud-based data visualization and management platform

that allows managers to track, command, and control assets in near-real-time.

Asset location reports including position, speed, altitude,

heading and past location and movement history reports for a wide range of tracking devices and other products sold by us are available

through GTCTrack.

Organizational

Company was originally incorporated in 1997 in Florida.

18 unchanged sentences

a merger with a newly formed wholly owned subsidiary.

March 8, 2018, following the approval of a majority of our shareholders, we effected a reverse split of our common stock at a ratio of 1 for 150 .

March 8, 2018, following the approval of a majority of our shareholders, we effected a reverse split of our common stock at a ratio of

On August 19, 2019, we effected a reverse split of our common stock at a ratio of 1 for 15 .

24 unchanged sentences

meeting of stockholders held on December 16, 2021.

June 22, 2022, the Company formed NextPlat B.V., a Netherlands limited liability company, as a wholly-owned subsidiary.

At present, NextPlat

B.V., has no active operations.

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

29 unchanged sentences

been exhausted and the potential for recovery is considered remote.

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

allowances for doubtful accounts.

As of June 30, 2022, and December 31, 2021, there were no allowances

for doubtful accounts.

CORP AND SUBSIDIARIES

9 unchanged sentences

value of inventories is recorded to cost of goods sold.

expenses amounted to $ 172,950 and $ 146,935 , at March 31, 2022 and December 31, 2021, respectively.

expenses amounted to $ 106,947 and $ 146,935 , at June 30, 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

in cash for rent, insurance and software license fees which are being amortized over the terms of the respective agreement.

portion consists of costs paid for future services which will occur within a year.

Currency Translation

10 unchanged sentences

relevant translation rates are as follows:

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

for the six months ended June 30, 2022, closing rate at 1.2165 US$:

GBP, quarterly average

rate at 1.256640 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 and yearly average rate at 1.29979 US$:

GBP, for the six months ended June 30, 2021, closing rate at 1.382800

GBP, quarterly average rate at 1.397146 US$:

GBP and yearly average rate at 1.388107 US$:

GBP, for the year ended 2021 closing rate

at 1.353372 US$:

GBP, yearly average rate at 1.375083 US$:

63 unchanged sentences

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.

At June 30, 2022 and December

31, 2021, we had contract liabilities of approximately $ 27,110 and $ 36,765 , respectively.

of Product Sales and Services

27 unchanged sentences

are expensed as incurred.

Leasehold improvements have an estimated service life of the term of the respective lease.

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

SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT

furniture and fixtures

Office furniture and fixtures

Computer equipment

Rental equipment

Leasehold improvements

Website development

of long-lived assets

6 unchanged sentences

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

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

ended June 30, 2022 and June 30, 2021, respectively.

for Derivative Instruments

77 unchanged sentences

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.

June 30, 2022 and December 31, 2021, the Company had aggregated current and long-term operating lease liabilities of $ 899,987 and $ 19,763 ,

respectively, and right of use assets of $ 909,908 and $ 22,643 , respectively.

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

11 unchanged sentences

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

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

31, 2021, there were no

expenditures on research and development.

For the six months ended June 30, 2022 and the June

30, 2021, there were no expenditures on research and development.

per Common Share

7 unchanged sentences

SCHEDULE OF DILUTIVE COMMON STOCK EQUIVALENTS

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.

June 30, 2022

June 30, 2021

Stock Options

Stock Warrants

Party Transactions

41 unchanged sentences

2 - INVENTORIES

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

June 30, 2022 and December 31, 2021, inventories consisted of the following:

SCHEDULE OF INVENTORIES

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

June 30, 2022

December 31, 2021

Finished goods

Less reserve for obsolete inventory

the six months ended June 30, 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 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.

For the six months ended June 30, 2022 and the year ended December 31, 2021, the Company recorded a receivable

in the amount of $ 459,541 and $ 491,417 , respectively, for amounts available to reclaim against the tax liability from UK and EU countries.

Subsequently to June 30, 2022, the Company has received a total of £ 53,473 or $ 64,451 , using an exchange rate close of 1.2053 GBP:USD,

in regards to this receivable.

4 – PREPAID EXPENSES

expenses amounted to $ 172,950 and $ 146,935 , at March 31, 2022 and December 31, 2021, respectively.

expenses amounted to $ 106,947 and $ 146,935 , at June 30, 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

in cash for rent, insurance and software license fees which are being amortized over the terms of the respective agreement.

portion consists of costs paid for future services which will occur within a year.

5 – PROPERTY AND EQUIPMENT

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

June 30, 2022 and December 31, 2021, property and equipment, net of fully depreciated assets, consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

furniture and fixtures

accumulated depreciation

June 30, 2022

December 31, 2021

Office furniture and fixtures

Computer equipment

Rental equipment

Leasehold improvements

Website development

Less accumulated depreciation

( 1,681,230 )

( 1,502,501 )

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

expense was $ 199,065 and $ 134,448 for the six months ended June 30, 2022 and 2021, respectively.

For the year ended December 31, 2021,

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of customer contracts are included in depreciation and amortization.

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:

For the six months ended June 30, 2022 and 2021, the Company amortized

$ 12,500 and $ 12,500 , respectively.

Future amortization of intangible assets is as follows:

SCHEDULE OF FUTURE AMORTIZATION OF INTANGIBLE ASSETS

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

the six months ended June 30, 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

deposits payable

wages & payroll liabilities

liability & sales tax payable

June 30, 2022

December 31, 2021

Accounts payable

Rental deposits

Customer deposits payable

Accrued wages & payroll liabilities

VAT liability & sales tax payable

Pre-merger accrued other liabilities

Accrued interest

Accrued other liabilities

other liabilities

CORP AND SUBSIDIARIES

1 unchanged sentence

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 .

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 has a term of 6

years from the date of drawdown, July

15, 2026 , the “Maturity Date”.

first repayment of £ 4,166.67

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

after July 16, 2020.

prepayments are allowed with 5 business days’ written notice and the amount of the prepayment is equal to 10% or more of the limit

or, if less, the balance of the debenture.

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

be used for general corporate and working capital purposes.

by and among the Company and HSBC UK Bank PLC (the “Lender”) for an amount of £ 250,000 , or USD $ 338,343 at an exchange

rate of GBP:USD of 1.3533720 .

The Debenture bears interest beginning July 16, 2021, at a rate of 3.99 % per annum over the Bank of England

Base Rate ( 0.1 % as of July 16, 2020), payable monthly on the outstanding principal amount of the Debenture.

The Debenture has a term

of 6 years from the date of drawdown, July 15, 2026 , the “Maturity Date”.

The first repayment of £ 4,166.67 (exclusive

of interest) was made 13 month(s) after July 16, 2020.

Voluntary prepayments are allowed with 5 business days’ written notice and

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

The Debenture is secured

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

corporate and working capital purposes.

The Debenture includes customary events of default, including, among others:

(i) non-payment of amounts due thereunder, (ii) non-compliance with covenants thereunder, (iii) bankruptcy or insolvency (each, an “Event

of Default”).

(i) non-payment

of amounts due thereunder, (ii) non-compliance with covenants thereunder, (iii) bankruptcy or insolvency (each, an “Event of Default”).

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

As of March 31, 2022, and

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

as current portion of notes payable and $ 218,967

and $ 253,757

as notes payable long term, respectively.

As of June 30, 2022, and December 31, 2021, the

Company has recorded $ 60,825 and $ 56,391 as current portion of notes payable and $ 187,544 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.

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

43 unchanged sentences

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

As of June 30, 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

of June 30, 2022, there were 3,333,333 shares of Preferred Stock authorized.

of June 30, 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.

2 unchanged sentences

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

of June 30, 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 of $ 5.50 .

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:

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

months ended June 30, 2022 is as follows:

SCHEDULE OF OUTSTANDING STOCK WARRANTS ACTIVITIES

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.

Average Exercise

Balance at January 1, 2021

Balance outstanding and exercisable at December 31, 2021

Balance at January 1, 2022

Balance outstanding and exercisable at June 30, 2022

of June 30, 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

23 unchanged sentences

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 ,

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.

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, pursuant to a restricted stock award, “RSA” granted on January

7, 2022 and effective on January 20, 2022.

The award is for 20,000 restricted shares of common, which vest in two equal installments,

the first on effective date and the remaining on the one year anniversary of the effective date, 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 .

1 unchanged sentence

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

On May 23, 2021, the Company entered a three ( 3 ) year

Employment Agreement (the “May Agreement”) with Mr.

Fernandez to serve as Chairman of the Board.

However, 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.

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

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

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

Notwithstanding the vesting schedule,

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

was made (the “June Restricted Stock Agreement”).

Fernandez’s employment is terminated for any reason at any

time by the Company prior to the full vesting of the RSA without “Cause” (as that term is defined in the June Agreement),

the RSA will vest and Mr.

Fernandez will receive all right, title and interest in the balance of the securities granted to him in the

RSA, in regard to the restricted stock award.

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

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

the six months ended June 30, 2022, pursuant to Mr.

Fernandez employment agreement, the “June Agreement”, see Note 12,

the Company recorded stock-based compensation and additional paid in capital, in the amount of $ 654,246 .

The value of the award for

the six months ended June 30, 2022 and the year ended December 31, 2021 was $ 297,534 and $ 356,712 , respectively.

The company has

charged the full valuation since inception to its current period.

The prior year charge had not been recognized and was deemed as

immaterial in scope for further adjustments.

The award is valued over the

service period of the June Agreement, five years from the date of grant, May 28, 2021.

On May 28, 2022, 200,000 of the RSA or one

third of the award, became vested and issuable.

On July 22, 2022, the Company issued 200,000 of restricted common stock, see Note

CORP AND SUBSIDIARIES

1 unchanged sentence

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

summary of the status of the Company’s outstanding stock options and changes during the six months ended June 30, 2022 is as follows:

SCHEDULE OF OUTSTANDING STOCK OPTIONS ACTIVITIES

Weighted Average

Balance at January 1, 2021

outstanding and excercisable at December 31, 2021

at January 1, 2022

outstanding and excercisable at March 31, 2022

Balance outstanding and exercisable at December 31, 2021

Balance at January 1, 2022

Balance outstanding and exercisable at June 30, 2022

10 - STOCK SUBSCRIPTION PAYABLE

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.

the six months ended June 30, 2022 and for the year ended December 31, 2021, the Company received gross proceeds of $ 0 and $ 1,400,000

of the $ 7,225,038 , pursuant to the December Offering, respectively.

On January 5, 2022, the Company received an additional $ 5,825,038 ,

resulting in the issuance of 2,229,950 shares of the Company’s common stock, eliminating the stock subscription payable as well

as, the closing of the offering.

11 - RELATED PARTY TRANSACTIONS

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

of June 30, 2022, total related party payments due as of June 30, 2022, and December 31, 2021, are $ 0

and $ 35,308 ,

respectively.

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

These related party payables were non-interest bearing.

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.

The over-advance limit was £ 25,000 or $ 33,834 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 % variable.

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.

These three individuals earned gross wages totaling $ 33,078

for the three months ended March 31, 2022 and

2021, respectively.

These three individuals earned gross wages totaling $ 71,899 and $ 76,416

for the six months ended June 30, 2022 and 2021, respectively.

Company retained the services of the spouse of Mr.

Fernandez for consulting fees of $ 8,960 for the six months ended June 30, 2022.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

12 - COMMITMENTS AND CONTINGENCIES

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

government-imposed quarantines, suspension of in-person attendance of academic programs, and cessation of certain travel and business

The United States has entered a recession as a result of the COVID-19 pandemic, which may prolong and exacerbate the negative

impact on us.

Although we expect the availability of vaccines and various treatments with respect to COVID-19 to have an overall positive

impact on business conditions in the aggregate over time, the exact timing of these positive developments is uncertain.

In December 2020,

the United States began distributing two vaccines that, in addition to other vaccines under development, are expected to help to reduce

the spread of the coronavirus that causes COVID-19 once they are widely distributed.

If the vaccines prove less effective than currently

understood by the scientific community and the United States Food and Drug Administration, or if there are problems with the acceptance,

availability, timing or other difficulties with widely distributing the vaccines, the pandemic may last longer, and could continue to

impact our business for longer, than we currently expect.

In response to COVID-19, governmental authorities have implemented numerous

measures to try to contain the virus, such as travel bans and restrictions, prohibitions on group events and gatherings, shutdowns of

certain businesses, curfews, shelter in place orders and recommendations to practice social distancing.

Although many governmental measures

have had specific expiration dates, some of those measures have already been extended more than once, and there is considerable uncertainty

regarding the duration of such measures and the implementation of any potential future measures, especially if cases increase again across

the United States, with the potential for additional challenges resulting from the emergence of new variants of COVID-19, some of which

may be more transmissible than the initial strain.

Such measures have impacted, and may continue to affect, our workforce, operations,

suppliers and customers.

We reduced the size of our workforce following the onset of COVID-19 and may need to take additional actions

to further reduce the size of our workforce in the future;

such reductions incur costs, and we can provide no assurance that we will

be able to rehire our workforce in the event our business experiences a subsequent recovery.

We took steps to curtail our operating expenses

and conserve cash.

We may elect or need to take additional remedial measures in the future as the information available to us continues

to develop, including with respect to our workforce, relationships with our third-party vendors, and our customers.

There is no certainty

that the remedial measures we have implemented to date, or any additional remedial steps we may take in the future, will be sufficient

to mitigate the risks posed by COVID-19.

Further, such measures could potentially materially adversely affect our business, financial

condition and results of operations and create additional risks for us.

Any escalation of COVID-19 cases across many of the markets we

serve could have a negative impact on us.

Specifically, we could be adversely impacted by limitations on our employees to perform their

work due to illness caused by the pandemic or local, state, or federal orders requiring our stores to close or employees to remain at

limitation of carriers to deliver our product to customers;

product shortages;

limitations on the ability of our customers to conduct

their business and purchase our products and services;

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.

impact of the COVID-19 pandemic has rapidly evolved around the globe, causing disruption in the U.S.

and global economies.

global economy continued reopening in early 2022 and robust economic activity has supported a continued recovery, certain geographies,

most notably China, have experienced setbacks.

uncertainty surrounding the COVID-19 pandemic, including uncertainty regarding new variants of COVID-19 that have emerged and other factors

have and may continue to contribute to significant volatility in the global markets.

While vaccine availability and uptake has increased,

the longer-term macro-economic effects on global supply chains, inflation, labor shortages and wage increases continue to impact many

COVID-19 and the current financial, economic and capital markets environment, and future developments in these and other

areas present uncertainty and risk with respect to our performance, financial condition, and results of operations.

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

12 unchanged sentences

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

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.

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 six months ended June 30, 2022 and for the years ended December 31, 2021 and 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

1 unchanged sentence

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.

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.

16 unchanged sentences

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 Company entered into a three year employment agreement with Mr.

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

“2021 Phipps Employment Agreement”).

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 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 under the 2021

Phipps Employment Agreement is an aggregate of $350,000.

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

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 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

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”).

9 unchanged sentences

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, 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 Mr.

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

1 unchanged sentence

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

Fernandez to serve as Chairman of the Board.

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.

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.

which superseded and replaced “the May Agreement.” The June Agreement has an initial term of 5 years effective on May 28,

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 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

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

The Company may increase (but not decrease)

3 unchanged sentences

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.

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 by Mr.

Fernandez for all reasonable out-of-pocket expenses actually incurred

or paid by Mr.

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

14 unchanged sentences

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

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.

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 per fiscal year, regardless of whether or not such expenses are incurred by

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

The Company will also pay for

any and all fees and costs incurred by Mr.

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

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

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

Fernandez in connection with his employment with the Company.

30 unchanged sentences

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.

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

Under the terms of the Ellenoff Agreement,

6 unchanged sentences

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

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);

provided that the Company’s

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

Such options have an exercise price

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

These equity awards to Mr.

Ellenoff were material to induce Mr.

Ellenoff to enter into the Ellenoff Agreement and were issued outside of a shareholder

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

to 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

4 unchanged sentences

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’s appointment,

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.

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.

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)

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 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.

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

Employment Agreement

18 unchanged sentences

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.

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.

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.

As Chief Financial Officer, Mr.

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

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”).

Thomson became the Company’s principal financial officer, effective October 9,

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

Thomson to reflect his new title of “Executive Vice President and Chief Financial Officer” effective October 9,

2021 (the “Thomson Amendment”).

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12 - COMMITMENTS AND CONTINGENCIES (continued)

Employment Agreement

15 unchanged sentences

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.

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

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.

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

Cohen, for 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.

7 unchanged sentences

(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.

May 2, 2022, the Company amended the Cohen Agreement, “Amendment No.1 Cohen”, as follows:

Section 4(a) of the Agreement shall

be deleted and replaced to read as follows;

the Corporation shall pay the Employee as compensation for his services hereunder, in monthly

installments during the Term, the sum of $ 125,000 (the “Annual Base Salary ”), less such deductions as shall be required

to be withheld by applicable law and regulations, and monthly advances against the salary, if any.

The Corporation shall review the Base

Salary on an annual basis and has the right, but not the obligation, to increase it, but such salary shall not be decreased during the

In addition, Section 6(c) of the Agreement shall be deleted and replaced to read as follows:

upon termination of the Employee’s

employment pursuant to Section 5(a)(v) or other than pursuant to Section 5(a)(i), 5(a)(ii), 5(a)(iii), 5(a)(iv), or 5(a)(vi) (i.e., without

“Cause”), in addition to the accrued but unpaid compensation and vacation pay through the end of the Term, or any then applicable

extension of the Term, and any other benefits accrued to him under any Benefit Plans outstanding at such time and the reimbursement of

documented, unreimbursed expenses incurred prior to such date, the Employee shall be entitled to the following severance benefits:

a cash payment equal to $75,000, to be paid in a single lump sum payment not later than sixty (60) days following such termination,

less withholding of all applicable taxes;

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

the benefits under Benefits Plans extended from time to time by the Corporation to its senior Employees;

and (iii) payment on a pro-rated

basis of any bonus or other payments earned in connection with any bonus plan to which the Employee was a participant as of the date

of the Employee’s termination of Employment.

In addition, any options or restricted stock shall be immediately vested upon termination

of Employee’s employment pursuant to Section 5(a)(v) or by the Corporation without “Cause.”

December 2, 2021, the Company entered 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.

The lease commenced on June 13, 2022 and will expire on August 31, 2027.

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 $ 2,765

per month at the yearly average conversion rate of 1.299279 .

The Poole lease expired July 23, 2022 and the Company is continuing to lease the facility on a month-to-month basis, as we may seek

to expand to a larger facility.

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.

Future minimum lease payments under these leases are

OF FUTURE MINIMUM LEASE PAYMENTS

Years Ending December 31,

Total undiscounted future non-cancelable minimum lease payments

Imputed interest

Present value of lease liabilities

Weighted average remaining term

expenses for the six months ended June 30, 2022, and 2021 were $ 17,479 and $ 15,476 , respectively.

CORP AND SUBSIDIARIES

1 unchanged sentence

12 - 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 30, 2022, the Company had current and long-term operating lease liabilities of $ 899,987 and right of use assets of $ 909,908 .

rent expense for the six months ended June 30, 2022 and 2021 were $ 17,815 and $ 18,933 , respectively.

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

asserts that the termination was not for cause and that he is owed all compensation payable under his employment agreement executed in

asserts that the termination was not for cause and that he is owed compensation payable under his June 2, 2021 employment agreement.

The Company’s position is that Mr.

Seifert is not owed any additional consideration or compensation relating to his

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

Seifert is not owed any additional compensation relating to his prior service with the Company

or arising under any employment agreement.

The Company and Mr.

Seifert are currently engaged in litigation

over the matter of his employment and termination.

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.

Seifert’s claims and has asserted affirmative claims for

relief 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.

This dispute is pending before the District Court for the Southern District of Florida

under Case No.

1:21-cv-22436-DPG.

June 24, 2021, Seifert submitted an online whistleblower complaint to the Occupational Safety and Health Administration (OSHA) alleging

that NextPlat engaged in retaliatory employment practices in violation of the Sarbanes-Oxley Act.

NextPlat responded by moving to dismiss

Seifert’s complaint, citing Seifert’s failure to make a prima facie showing that a protected activity contributed

to the adverse action alleged in the complaint.

On July 21, 2022, following an investigation by the Regional Administrator for OSHA,

Region IV, the Secretary of Labor issued its findings, dismissing Seifert’s complaint on the grounds that the OSHA investigator

found that the evidence did not support Seifert’s claims.

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

3 unchanged sentences

13 - 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.

accounted for 49.5 % and 64.6 % of the Company’s revenues during the six months ended June 30, 2022 and 2021, respectively.

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

CORP AND SUBSIDIARIES

1 unchanged sentence

13 – 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 March 31, 2022 and 2021.

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

months ended June 30, 2022 and 2021.

SCHEDULE OF CONCENTRATION RISK

June 30, 2022

June 30, 2021

Globalstar Europe

Network Innovations

Cygnus Telecom

Satcom Global

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

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

months ended June 30, 2022 and 2021.

June 30, 2022

June 30, 2021

Globalstar Europe

Network Innovations

Cygnus Telecom

Satcom Global

following table sets forth revenue as to each geographic location, for the six months ended June 30, 2022 and 2021:

SCHEDULE OF REVENUE FROM EACH GEOGRAPHIC LOCATION

June 30, 2022

June 30, 2021

North America

South America

Asia & Pacific

following table sets forth revenue as to each geographic location, for the three months ended June 30, 2022 and 2021:

June 30, 2022

June 30, 2021

North America

South America

Asia & Pacific

14 - SUBSEQUENT EVENTS

On July 12, 2022, the Company hired Lauren Sturges

Fernandez, the spouse of Mr.

Fernandez, as Manager of Digital Assets.

Fernandez is an at-will employee with an annual salary

of $ 95,000 .

July 22, 2022, the Company issued 200,000 shares of restricted common stock to Charles M.

Fernandez, pursuant to a restricted stock

award, which vested on May 28, 2022, see Note 9.

Option Agreement

July 1, 2022, the Company granted Charles Fernandez, 70,000 fully vested options, pursuant to compensation committee board approval on

June 30, 2022.

The options are issued under the Company’s 2021 Incentive Award Plan, the “2021 Plan”.

The options have

an exercise price of $ 2.13 and a term of 10 years.

July 29, 2022, Andrew Cohen resigned his position as Senior Vice President of Operations.

Pursuant to the amendment to the Cohen

Agreement on May 2, 2022, Mr.

Cohen received $ 75,000

severance, less applicable taxes and the remaining unvested portion of the restricted stock award granted on October 8, 2021.

relation to the above, on August 4, 2022, the Company issued 15,000

shares of restricted common stock for stock-based compensation of $ 71,250 ,

based on the fair market value of the market close of award date, October 8, 2021 of $ 4.75 .

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)).

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

25 unchanged sentences

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

Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on June 30, 2022, and the Company’s subsequent public

filings with the SEC.

5 unchanged sentences

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

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

impact of the COVID-19 pandemic has rapidly evolved around the globe, causing disruption in the U.S.

and global economies.

global economy continued reopening in early 2022 and robust economic activity has supported a continued recovery, certain geographies,

most notably China, have experienced setbacks.

uncertainty surrounding the COVID-19 pandemic, including uncertainty regarding new variants of COVID-19 that have emerged and other factors

have and may continue to contribute to significant volatility in the global markets.

While vaccine availability and uptake has increased,

the longer-term macro-economic effects on global supply chains, inflation, labor shortages and wage increases continue to impact many

COVID-19 and the current financial, economic and capital markets environment, and future developments in these and other

areas present uncertainty and risk with respect to our performance, financial condition, and results of operations.

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

depend on future developments, such as the duration and severity of the pandemic, the extent of any additional increases in cases across

the United States, and the related length of its impact on the global economy, as well as the timing and availability of effective medical

treatments and vaccines, which remain uncertain and cannot be predicted at this time.

The resumption of our normal business operations

may be delayed or constrained by lingering effects of COVID-19 on our customers, suppliers and/or third-party service providers.

the extent to which our mitigation efforts are successful, if at all, is not currently ascertainable.

Due to the daily evolution of the

COVID-19 pandemic and the responses to curb its spread, we cannot predict the full impact of the COVID-19 pandemic on our business and

results of operations, but our business, financial condition, results of operations and cash flows have already been materially adversely

impacted, and we anticipate they will continue to be adversely affected by the COVID-19 pandemic and its negative effects on global economic

Any recovery from the COVID-19 pandemic and related economic impact may also be slowed or reversed by a variety of factors,

such as any increase in COVID-19 infections.

Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts

to our business as a result of its national and, to some extent, global economic impact, including the current recession and any recession

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.

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 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 six months ended June 30, 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, the Company has

embarked upon the rollout of a state-of-the-art e-commerce platform to collaborate with businesses to optimize their ability to sell

their goods online, domestically, and internationally, and enabling customers and partners to optimize their e-commerce presence and

We intend to develop a next generation platform for digital assets built for Web3, an internet service built using decentralized

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.

legal status of NFTs under a myriad of state and federal laws and regulatory regimes (including securities, banking, and commodities

laws) is highly uncertain and unresolved, and the applicability of various of those regimes to any NFTs that we may propose to post on

our platform is also unresolved.

Our creation and operation of NextPlat Digital will present a number of new regulatory and legal compliance

obligations for the Company.

As an initial matter we will need to make a determination whether a particular NFT could reasonably be considered

a security for federal and state law purposes, and if so we would be required to comply with the applicable securities registration requirements

or obtain comfort that our activities would fall within applicable exemptions from registration.

To the extent that we determine that

a particular NFT could be deemed a “security” within the meaning of the U.S.

federal and/or securities laws, we intend to

obtain contractual comfort from licensed broker-dealer authorized to act as a trading system for those digital assets that such broker-dealer

will comply with the applicable “Know Your Customer” (“KYC”) rules and custom and practice, as well as with the

applicable Anti-Money Laundering laws and regulations (“AML”) and Combating the Financing of Terrorism (“CFT”),

administered and enforced by the U.S.

Treasury Financial Crimes and Enforcement Network discussed below, among others.

We may have legal

exposure for any alleged failures on the part of such licensed broker-dealer to fulfill its obligations under its contracts with us.

respect to the securities status of an NFT that we propose to post to 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 the U.S.

federal and/or state securities laws in determining if and how an NFT can be posted on our platform.

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.

We expect our risk assessment policies will continuously

evolve to take into account developments in case law, applicable facts, developments in technology, and changes in applicable regulatory

do not currently intend to undertake or participate in “initial coin offerings”, the minting of “coins” or the

mining of cryptocurrencies.

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

of a particular NFT’s status as a security, we will need to assess whether we needed to comply with other applicable regulations

and laws (including but not limited to AML and CFT regulations).

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 AML and CFT regulations.

Depending on the particular attributes of an NFT, the manner in which it is marketed, and

the nature of the clientele, we could be subject to other legal and regulatory regimes as well.

We will endeavor to comply with all applicable

laws in connection with our NextPlat Digital business, but the uncertain application of those laws to our proposed business may create

substantial risk to the Company.

onboarding new users, we intend to utilize third-party tools to proactively screen for high-risk crypto wallets, including explicitly

sanctioned addresses and addresses associated with sanctioned entities.

Crypto wallets protect the identity of the owner of the wallet,

store the owner’s private keys, secure and provide access by the owner to the cryptocurrency owned by it and allow the owner to

send, receive, and transact business with cryptocurrencies.

Such wallets by their nature obfuscate the identity of the owner of the wallet

and limit access to the transaction history of that wallet and its owner.

Consequently, crypto wallets and cryptocurrencies may be used

by persons seeking to avoid legal oversight and to violate the law.

For example, they can be used to launder money and to promote terrorism.

The applicable legal 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 engage, form or acquire a broker dealer in order to post, trade or sell NFTs or other digital

assets that are securities, we will attempt to fully comply with all applicable KYC, AML and CFT compliance requirements.

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 less.

In either event there can be no assurance that our efforts to fully comply with applicable law

will be successful.

determining to engage in transactions in an NFT, we will attempt to comply with all applicable laws.

However, given the substantial legal

uncertainties that may presented by those laws and given the informational constraints presented by crypto wallets we may not be successful

in our efforts.

As a consequence, we may be exposed to regulatory enforcement and civil or criminal sanction should a legal authority

determine that our approach is inadequate or inappropriate, as well as to claims asserting civil liability.

Moreover, governmental agencies

may seek to apply laws to our NextPlat Digital business that we believe are inapplicable and may seek sanctions relating to our alleged

failure to comply with those laws.

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.

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