What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-15 · 328 added, 150 removed, 201 unchanged (70% of the section changed)

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.

in Progressive Care Inc.

September 2, 2022, we closed a transaction with Progressive Care Inc.

RXMD) (“Progressive Care”), pursuant to which

we purchased 3,000 newly issued units of securities from Progressive Care (the “Units”) at a price per Unit of $2,000 for

an aggregate purchase price of $6 million (the “Unit Purchase”).

Each Unit consists of one share of Series B Convertible

Preferred Stock of Progressive Care (“Series B Preferred Stock”) and one warrant to purchase a share of Series B Preferred

Stock (“RXMD Warrants”).

share of Series B Preferred Stock votes as a class with the common stock of Progressive Care, and has 100,000 votes per share.

each share of Series B Preferred Stock is convertible into 100,000 shares of Progressive common stock.

In addition, the Series B Preferred

Stock has a liquidation and dividend preference.

The RXMD Warrants have a five-year term, and are immediately exercisable, in whole or

in part, and contain cashless exercise provisions.

Each Warrant is exercisable at $2,000 per share of Series B Preferred Stock.

the consummation of the Unit Purchase, our Chairman and Chief Executive Officer, Charles M.

Fernandez, and our board member, Rodney

Barreto, were appointed to Progressive Care’s Board of Directors, with Mr.

Fernandez appointed to serve as Chairman of

Progressive Care’s Board of Directors and Mr.

Barreto appointed to serve as a Vice Chairman of Progressive Care’s Board

of Directors.

On November 11, 2022, the Progressive Care Board of Directors elected Mr.

Fernandez to serve as the Chief Executive

Officer of Progressive Care.

addition, on September 2, 2022, NextPlat, Charles Fernandez, Rodney Barreto and certain other purchasers purchased from Iliad Research

and Trading, L.P.

(“Iliad”) a Secured Convertible Promissory Note, dated March 6, 2019, made by Progressive Care to Iliad

(the “Note”).

The accrued and unpaid principal and interest under the note at the time of the purchase was approximately

$2.79 million.

The aggregate purchase price paid to Iliad for the Note was $2.3 Million of which NextPlat contributed $1 million and

Fernandez and Barreto contributed $400,000 each (the “Note Purchase”).

connection with the Note Purchase, NextPlat, Messrs.

Fernandez and Barreto and the other purchasers of the Note entered into a Debt Modification

Agreement with Progressive Care.

Pursuant to the Debt Modification Agreement, the interest rate under the Note was reduced from 10% to

5% per annum and the maturity date was extended to May 31, 2027.

In addition, the conversion price under the note was changed to $0.02

per share of Common Stock.

Pursuant to the Debt Modification Agreement, NextPlat, Messrs.

Fernandez and Barreto and the other purchasers

of the Note have the right, exercisable at any time, to redeem all or any portion of the Note.

The Debt Modification Agreement also provides

that the Note will automatically convert upon the later to occur of:

(a) the completion by Progressive Care of a reverse stock split,

and (b) the listing of Progressive Care’s common stock on a national exchange.

In consideration of the concessions in the Debt

Modification Agreement, Progressive Care issued 21,000,000 shares of its common stock to the purchasers of the Note, of which NextPlat,

Charles Fernandez and Rodney Barreto, received 9,130,435, 3,652,174, and 3,652,174 shares, respectively.

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.

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

2022 Name Change

4 unchanged sentences

meeting of stockholders held on December 16, 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.

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.

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.

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

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

For 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.

This amount is valued from the date of the award May 28, 2021

to June 30, 2022.

The value of the award for the year ended December 31, 2021 was $356,712 and for the six months ended June 30, 2022,

The award is valued over the service period of the June Agreement, five years from the date of grant, May 28, 2021.

2, 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 14.

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

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

July 22, 2022, pursuant to Mr.

Fernandez employment agreement, the “June Agreement”, see Note 13, the Company issued 200,000

restricted shares and recorded stock-based compensation in the amount of $805,246 to eAperion Partners LLC, of which Mr.

managing director.

This amount is valued from the date of the award May 28, 2021 to September 30, 2022.

The value of the award for the

year ended December 31, 2021 was $356,712 and for the nine months ended September 30, 2022, $448,534.

The award is valued over the service

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

On June 2, 2022, 200,000 of the RSA or one third of the

award, became vested and issuable.

August 4, 2022, the Company issued 15,000 restricted shares to Andrew Cohen, pursuant to a restricted stock award which became fully

vested upon his resignation, see Note 13.

The award resulted in stock based compensation of $76,950 and was valued as of the date of

the award on October 8, 2021.

September 20, 2022, the Company issued 116,000 restricted shares of common stock to eAperion Partners LLC, of which Charles M.

is managing partner, pursuant to a restricted stock award, “RSA,” under the Company’s 2020 Equity Incentive Plan.

shares were fully vested upon issuance.

The shares were valued at the market close of issuance date of $2.52 per share, resulting in

stock-based compensation of $292,320.

September 28, 2022, the Company issued 20,000 restricted shares to Douglas Ellenoff, pursuant to such award as granted on August 24,

2021, using the fair market value as of date of the award of $5.37 per share, resulting in stock-based compensation of $107,400.

on September 28, 2022, the Company issued 5,000 restricted shares to Paul Thomson, pursuant to such award as granted on August 24, 2021,

using the fair market value as of date of the award of $5.37 per share, resulting in stock-based compensation of $26,850.

Resource Planning System (ERP)

3 unchanged sentences

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

For the six months ended June 30, 2022, approximately

26% of the cost was expensed in the period incurred to SGA and 74% was capitalized and depreciated over its useful life.

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

For the nine months ended

September 30, 2022, approximately 27% of the cost was expensed in the period incurred to SGA and 73% was capitalized and depreciated

over its useful life.

The Company intends to maintain dual accounting systems, until such time it is deemed acceptable, which we estimate

to be in the first quarter of 2023.

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

1 unchanged sentence

B.V., has no active operations.

of June 30, 2022, there were 50,000,000 shares of common stock authorized and 9,293,096 shares issued and outstanding.

of June 30, 2022, there were 2,836,092 registered warrants to purchase common stock authorized and 2,530,092 registered warrants issued

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

of September 30, 2022, there were 50,000,000 shares of common stock authorized and 9,649,096 shares issued and outstanding.

of September 30, 2022, there were 3,312,000 registered warrants to purchase common stock authorized and 2,836,092 registered warrants

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

price of $5.50.

The warrants expire in June of 2026.

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.

had net cash used in operations of $1,888,252 during the six months ended June 30, 2022.

At June 30, 2022, we had working capital of

Additionally, at June 30, 2022, we had an accumulated deficit of $24,492,159 and stockholder’s equity of $22,698,841.

of Operations for the Three and Six Months Ended June 30, 2022, compared to the Three and Six Months Ended June 30, 2021

Net Sales for the six months ended June 30, 2022, consisted primarily of sales of satellite phones, tracking devices, accessories

of September 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.

had net cash used in operations of $2,731,076 during the nine months ended September 30, 2022.

At September 30, 2022, we had working

capital of $13,378,221.

Additionally, at September 30, 2022, we had an accumulated deficit of $30,205,435 and stockholder’s equity

of $18,192,649.

of Operations for the Three and Nine months Ended September 30, 2022, compared to the Three and Nine months Ended September 30, 2021

Sales for the nine months ended September 30, 2022, consisted primarily of sales of satellite phones, tracking devices, accessories

and airtime plans.

For the six months ended June 30, 2022, revenues generated were $6,499,257 compared to $3,417,688 of revenues for

the six months ended June 30, 2021, an increase in total revenues of $3,031,569 or 88.7%.

Total net sales for Global Telesat Communications

were $4,542,671 for the six months ended June 30, 2022, as compared to $2,398,912 for the six months ended June 30, 2021, an increase

of $2,143,759 or 89.4%.

Total net sales for Global Telesat Communications Ltd as valued in its home currency of GBP was £3,496,302,

for the six months ended June 30, 2022, as compared to £1,728,190, for the six months ended June 30, 2021, an increase of £1,768,112

The net effect of the exchange rate GBP:USD on revenue for the six months ended June 30, 2022, was reduced by $310,570, using

GBP:USD exchange rate yearly average of 1.299279 for the six months ended June 30, 2022 as compared to GBP:USD 1.38811 for the six months

ended June 30, 2021.

For the nine months ended September 30, 2022, revenues generated were $9,080,083 compared to $5,667,966 of

revenues for the nine months ended September 30, 2021, an increase in total revenues of $3,412,117 or 60.2%.

Total net sales for

Global Telesat Communications Ltd.

were $6,449,399 for the nine months ended September 30, 2022, as compared to $3,897,254 for the

nine months ended September 30, 2021, an increase of $2,552,145 or 65.5%.

Total net sales for Global Telesat Communications Ltd as

valued in its home currency of GBP was £5,125,142, for the nine months ended September 30, 2022, as compared to

£2,813,191, for the nine months ended September 30, 2021, an increase of £2,311,951 or 82.2%.

The net effect of the

exchange rate GBP:USD on revenue for the nine months ended September 30, 2022, was reduced by $650,716, using GBP:USD exchange rate

yearly average of 1.25838 for the nine months ended September 30, 2022 as compared to GBP:USD 1.38534 for the nine months ended

September 30, 2021.

Total net sales for Orbital Satcom Corp.

were $1,906,586 for the six months ended June 30, 2022, as compared to

$1,018,776, for the six months ended June 30, 2021, an increase of $887,810 or 87.1%.

sales for the three months ended June 30, 2022, consisted primarily of sales of satellite phones, tracking devices, accessories, and

airtime plans.

For the three months ended June 30, 2022, revenues generated were $2,871,479 compared to $1,956,260 of revenues for the

three months ended June 30, 2021, an increase in total revenues of $915,219 or 46.8%.

Total sales for Global Telesat Communications Ltd.

were $1,946,831 for the three months ended June 30, 2022, as compared to $1,392,609 for the three months ended June 30, 2021, an increase

of $554,221 or 39.8%.

were $2,630,684 for the nine months ended September 30, 2022, as

compared to $1,770,712, for the nine months ended September 30, 2021, an increase of $859,972 or 48.6%.

sales for the three months ended September 30, 2022, consisted primarily of sales of satellite phones, tracking devices,

accessories, and airtime plans.

For the three months ended September 30, 2022, revenues generated were $2,630,826 compared to

$2,250,278 of revenues for the three months ended September 30, 2021, an increase in total revenues of $380,548 or 16.9%.

sales for Global Telesat Communications Ltd.

were $1,906,728 for the three months ended September 30, 2022, as compared to

$1,498,341 for the three months ended September 30, 2021, an increase of $408,387 or 27.3%.

Total sales for Orbital Satcom Corp.

were $924,648 for the three months ended June 30, 2022 as compared to $563,650,

for the three months ended June 30, 2021, an increase of $360,998 or 64.0%.

The Company attributes the changes in revenue to new product

lines, increased inventory, and additional e-commerce storefronts, offset by disruption of sales due to economic sanctions imposed on

were $724,098 for the three months ended September 30, 2022 as compared to $751,937, for the three months ended September 30, 2021,

a decrease of $27,839 or 3.7%.

The Company attributes the changes in revenue to new product lines, increased inventory, and

additional e-commerce storefronts, offset by disruption of sales due to economic sanctions imposed on Russia.

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

During the six months ended June 30, 2022, cost of sales increased to $5,080,775 compared to $2,438,681, for

the six months ended June 30, 2021, an increase of $2,642,094 or 108.3%.

Gross profit margins during the six months ended June 30, 2022

During the nine months ended September 30, 2022, cost of sales increased to $7,032,847 compared to $4,195,823, for the

nine months ended September 30, 2021, an increase of $2,837,024 or 67.6%.

Gross profit margins during the nine months ended September

30, 2022 were 22.5%, as compared to 26.0% for the comparable period in the prior year.

During the three months ended June 30, 2022, cost of sales

increased to $2,304,090 compared to $1,414,770, for the three months ended June 30, 2021, an increase of $889,320 or 62.9%.

margins during the three months ended June 30, 2022, were 19.8% as compared to 27.69% for the comparable period in the prior year.

indicated by the results for the three and six months, our gross profit margins have decreased by 7.9% and 7.4%, respectively.

is primarily due to significant increases in the cost of inventory and freight, an increase in sales to distributors which attract lower

percentage profits, as well as, selling some items at a discounted rate to charities for use in Ukraine.

Total operating expenses for the six months ended June 30, 2022 were $3,736,346, an increase of $1,909,074 or

104.5%, from total operating expenses for the six months ended June 30, 2021 of $1,827,272 .

Total operating expenses for the three

months ended June 30, 2022 were $2,100,638, an increase of $1,009,812 or 92.6%, from total operating expenses for the three months ended

June 30, 2021 of $1,090,826 .

During the three months ended September 30, 2022,

cost of sales increased to $1,952,072 compared to $1,757,142, for the three months ended September 30, 2021, an increase of $194,930

Gross profit margins during the three months ended September 30, 2022, were 25.8% as compared to 21.9% for the comparable period

in the prior year.

As indicated by the results for the three and nine months, our gross profit margins have increased by 3.89% and decreased

by 3.4%, respectively.

The increase for the quarter was due to increased high margin airtime sales offsetting the decrease for the nine

month period ended, September 30, 2022 which continued due to significant increases in the cost of inventory and freight, an increase

in sales to distributors which attract lower percentage profits, as well as, selling some items at a discounted rate to charities for

use in Ukraine.

Total operating expenses for the nine months ended September 30, 2022 were $6,580,039, an increase of $2,022,785

or 44.4%, from total operating expenses for the nine months ended September 30, 2021 of $4,557,254 .

Total operating expenses for

the three months ended September 30, 2022 were $2,843,693, an increase of $113,711 or 4.2%, from total operating expenses for the three

months ended September 30, 2021 of $2,729,982 .

Factors contributing to the decrease are described below.

general and administrative expenses were $1,735,205 and $443,696 for the six months ended June 30, 2022 and 2021,

respectively, an increase of $1,291,509 or 291.1%.

Selling, general and administrative expenses were $1,160,855 and $282,006 for the

three months ended June 30, 2022 and 2021, respectively, an increase of $878,849 or 311.6%.

The increase, for the three and six

months ended June 30, 2022, is attributable to an increase in non-cash stock-based compensation of $689,046, certain SG&A

expenses such bank charges, credit card fees, Amazon fees, and shipping charges that fluctuate with sales volatility, an increase in

medical, liability and D&O insurance and an increase in marketing initiatives.

wages and payroll taxes were $1,306,373 and $687,712 for the six months ended June 30, 2022 and 2021, respectively, an increase

of $618,661, or 90.0%.

Salaries, wages and payroll taxes were $670,797 and $479,538 for the three months ended June 30, 2022, and 2021,

respectively, an increase of $191,259, or 39.9%.

The increase is a result of executive management additions, adjusted salaries and an

increase in personnel.

fees were $483,203 and $548,916 for the six months ended June 30, 2022 and 2021, respectively, a decrease of $65,713, or 12.0%.

Professional fees were $156,990 and $256,034 for the three months ended June 30, 2022 and 2021, respectively, a decrease of $99,044,

The decrease during the three and six months ended June 30, 2022 as compared to the same period in 2021, is attributable to

the higher fees in the same period of 2021, that were associated with capital raising efforts and up-listing to Nasdaq.

and amortization expenses were $211,565 and $146,948 for the six months ended June 30, 2022 and 2021, respectively, an increase

general and administrative expenses were $3,434,916 and $2,284,456 for the nine months ended September 30, 2022 and 2021, respectively,

an increase of $1,150,460 or 50.4%.

Selling, general and administrative expenses were $1,699,711 and $1,840,760 for the three months

ended September 30, 2022 and 2021, respectively, a decrease of $141,049 or 7.7%.

The decrease for the three months ended September 30,

2022, is attributable to a reclass of approximately $103,000 to professional fees from advertising.

For the nine months ended September

30, 2022, is attributable to an increase in non-cash stock-based compensation of $642,201, certain SG&A expenses such bank charges,

credit card fees, Amazon fees, and shipping charges that fluctuate with sales volatility, an increase in medical, liability and D&O

insurance, of $74,759 and $84,166, respectively.

wages and payroll taxes were $1,957,592 and $1,178,267 for the nine months ended September 30, 2022 and 2021, respectively, an

increase of $779,325, or 66.1%.

Salaries, wages and payroll taxes were $651,219 and $490,555 for the three months ended September 30,

2022, and 2021, respectively, an increase of $160,664, or 32.8%.

The increase is a result of executive management additions, adjusted

salaries and an increase in personnel.

fees were $839,509 and $869,127 for the nine months ended September 30, 2022 and 2021, respectively, a decrease of $29,618, or

Professional fees were $356,306 and $320,211 for the three months ended September 30, 2022 and 2021, respectively, an increase

of $36,095, or 11.3%.

Depreciation and amortization expenses were $111,996 and $73,248 for the three months ended June 30, 2022 and 2021,

respectively, an increase of $38,748 or 52.9%.

The increase was primarily attributable capitalized expenditures for software and website

development and equipment and leaseholds for the new corporate office space in Florida.

The increase during the three months ended September 30, 2022 as compared to the same period in 2021, is attributable

to the quarter reclass of advertising initiatives.

For the nine months ended September 30, 2022, the decrease is attributable to higher

fees in the same period of 2021, that were associated with capital raising efforts and up-listing to Nasdaq.

and amortization expenses were $348,022 and $225,404 for the nine months ended September 30, 2022 and 2021, respectively, an

increase of $122,618 or 54.4%.

Depreciation and amortization expenses were $136,457 and $78,456 for the three months ended September

30, 2022 and 2021, respectively, an increase of $58,001 or 73.9%.

The increase was primarily attributable to capitalized

expenditures for software and website development and equipment and leasehold improvements for the new corporate office space in

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

2 unchanged sentences

Other Expense .

Our total other expense was $138,080, compared to $1,413,271 during the six months ended June 30, 2022

and 2021, respectively, a decrease of $1,275,191 or 90.2%.

Our total other expense was $122,612 compared to $909,058 during the three

months ended June 30, 2022 and 2021, respectively.

The decrease for the three and six months ended June 30, 2022, as compared to the

prior year, is attributable to the reduction in interest expense from the prior year of $1,454,677, offset by an increase in foreign

exchange rate of $168,226 and an increase in interest earned of $9,572.

The decrease in interest expense is relative to the elimination of all debt, except for the balance of $248,369,

representing the coronavirus loan debt from the prior year.

We recorded net loss before income tax of $1,655,861 and $2,505,944 for the three and six months ended June 30, 2022 as

compared net loss of $1,458,394 and a net loss of $2,261,536, for the three and six months ended June 30, 2021.

The increase in the loss

is a result of the factors as described above.

Our total other expense was $231,981, compared to $1,481,974 during the

nine months ended September 30, 2022 and 2021, respectively, a decrease of $1,249,993 or 84.3%.

Our total other expense was $93,901 compared

to $68,703 during the three months ended September 30, 2022 and 2021, respectively.

The decrease and increase for the three and nine months

ended September 30, 2022, as compared to the prior year, is attributable to the reduction in interest expense from the prior year of $1,448,337,

an increase in interest earned of $10,275, offset by an increase in foreign exchange rate of $187,787.

The decrease in interest expense

is relative to the elimination of all debt, except for the balance of $324,472, representing the coronavirus loan debt from the prior

Loss Before Income Tax & Equity of Affiliate .

We recorded net loss before income tax and equity net loss of affiliate of

$2,258,840 and $4,764,784 for the three and nine months ended September 30, 2022 as compared net loss of $2,305,549 and a net loss

of $4,567,085, for the three and nine months ended September 30, 2021.

For the three months ended September 30, 2022 the decrease in

the loss and the increase in the loss for the nine months ended September 30.

2022, is a result of the factors as described

in Net Losses of Affiliate .

We recorded a net loss in equity of affiliate of $3,454,436 and $3,454,436,

for the three and nine months ended September 30, 2022, see Note 7.

For the three and nine months ended September 30, 2021, there were

no losses or income.

recorded a net loss of $5,713,276 and $8,219,220, for the three and nine months ended September 30, 2022.

We recorded a net loss of $2,305,549

and $4,567,085, for the three and nine months ended September 30, 2021.

Comprehensive

Loss We recorded a loss for foreign currency translation adjustments for the three and six months ended June 30, 2022 of $4,788

For the three and six months ended June 30, 2021 we recorded a loss of $14,345 and a loss of $12,734.

(Loss) Income.

We recorded a loss for foreign currency translation adjustments for the three and nine months ended September 30, 2022 of

$67,635 and $87,753.

For the three and nine months ended September 30, 2021 we recorded income of $55,584 and $42,850.

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

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on an ongoing basis.

At June 30, 2022, we had a cash balance of $20,467,722.

Our working capital is $21,324,348 at June 30, 2022.

current assets at June 30, 2022 increased $3,455,859 or 18% from December 31, 2021 and included cash, accounts receivable, VAT receivable,

At September 30, 2022, we had a cash balance of $12,469,607.

Our working capital is $13,378,221 at September 30,

current assets at September 30, 2022 decreased $4,530,091 or 23% from December 31, 2021 and included cash, accounts receivable, VAT receivable,

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

current liabilities at June 30, 2022 decreased $1,274,282 or 45.8% from December 31, 2021 and included our accounts payable, due to related

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

June 30, 2022, the Company had an accumulated deficit of $24,492,159, working capital of $21,324,348 and net loss of $2,505,944 during

the six months ended June 30, 2022.

current liabilities at September 30, 2022 decreased $1,314,105 or 47.3% from December 31, 2021 and included our accounts payable, due

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

our business.

September 30, 2022, the Company had an accumulated deficit of $30,205,435 working capital of $13,378,221 and net loss of $8,219,220 during

the nine months ended September 30, 2022.

of the date of this report, the Company’s existing cash resources and existing borrowing availability are sufficient to support

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

cash flows used by operating activities for the six months ended June 30, 2022 amounted to $1,888,252 and were primarily

attributable to our net loss of $2,505,944, total amortization expense of $12,500 and depreciation of $199,065, stock based

compensation of $689,046 and net change in assets and liabilities of $282,919, primarily attributable to decrease in accounts

receivable of $4,921, an increase in inventory of $350,729, an increase in unbilled revenue of $20,394, a decrease in prepaid

expense of $39,988, a decrease in VAT receivable of $31,876, a decrease in other current assets of $45,666, a decrease in operating

lease liabilities of $7,041, an increase in accounts payable of $22,354, a decrease in contract liabilities of $9,655, and decrease

in provision for income taxes of $39,905.

cash flows used by operating activities for the six months ended June 30, 2021 amounted to $1,270,837 and were primarily attributable

Net cash flows used by operating activities for the nine months ended September

30, 2022 amounted to $2,731,076 and were primarily attributable to our net loss of $8,219,220, total amortization expense of $18,750 and

depreciation of $329,272, stock based compensation in relation to restricted stock awards $1,343,566 an stock based compensation for the fair value of options granted of $620,199, amortization of right of use of $58,284, share of loss from equity method

investment of 3,454,436 and net change in assets and liabilities of $336,363, primarily attributable to an increase in accounts receivable

of $339,258, an increase in inventory of 118,594, an increase in unbilled revenue of $19,937, a decrease in prepaid expense of $37,170,

a decrease in VAT receivable of $136,299, a decrease in other current assets of $48,539, an increase in operating lease liabilities of

$61,213, an increase in accounts payable of $23,700, a decrease in contract liabilities of $1,756, and decrease in provision for income

taxes of $41,313.

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

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

$1,425,366, amortization of right to use of $15,476 gain on extinguishment of debt of $20,832, stock based compensation of $14,200 and

net change in assets and liabilities of $590,459, primarily attributable to an increase in accounts receivable of $158,079, an increase

in inventory of $790,536, an increase in unbilled revenue of $10,171, an increase in VAT receivable of $279,215, an increase in other

current assets of $3,664, increase in accounts payable of $662,022, an increase in contract liabilities of $4,469, a decrease in lease

liabilities of $15,512, and an increase in provision for income taxes of $227.

cash flows used in investing activities were $395,245 and $27,248 for the six months ended June 30, 2022 and 2021, respectively.

the six months ended June 30, 2022 and June 30, 2021, we purchased equipment, website development and leaseholds of $395,245 and $27,248,

respectively.

$1,425,365, amortization of right to use of $24,948 gain on extinguishment of debt of $20,832, stock based compensation of $1,321,564

and net change in assets and liabilities of $1,421,208, primarily attributable to an increase in accounts receivable of $132,808, an

increase in inventory of $621,487, an increase in unbilled revenue of $22,353, an increase in VAT receivable of $446,657, an increase

in other current assets of $728, decrease in accounts payable of $168,557, an increase in contract liabilities of $4,252, a decrease

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

cash flows used in investing activities were $7,471,118 and $95,598 for the nine months ended September 30, 2022 and 2021, respectively.

During the nine months ended September 30, 2022 and September 30, 2021, we purchased equipment, website development and leaseholds of

$471,118 and $95,598, respectively.

On September 2, 2022, we purchased an equity method investment of $7,000,000, see Note 7.

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

cash flows provided by financing activities were $5,539,317 and $14,997,706 for the six months ended June 30, 2022 and 2021, respectively.

Net cash flows provided by financing activities were $5,539,317 for the six months ended June 30, 2022 and were primarily attributed

cash flows provided by financing activities were $5,534,318 and $19,466,289 for the nine months ended September 30, 2022 and 2021, respectively.

Net cash flows provided by financing activities were $5,534,318 for the nine months ended September 30, 2022 and were primarily attributed

to proceeds from common stock offering of $5,605,038, offset by repayments of notes payable for $51,104 and repayments of related party

payable $19,616.

cash flows provided by financing activities were $14,997,706 for the six months ended June 30, 2021 and were for, proceeds from;

a convertible

note payable of $350,000, related party payable of $114,981, the June Offering, of $14,649,573, proceeds of warrant exercise of $5,000

which was offset by repayments of notes payable for $121,848.

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

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

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

exercised of $5,000, payments of coronavirus interruption loan of $11,189 and repayments to related party payable of

Sheet Arrangements

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of Presentation and Principles of Consolidation

consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of

America (“US GAAP”).

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

subsidiaries, Orbital Satcom Corp, Global Telesat Communications Ltd.

consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America

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

Orbital Satcom Corp, Global Telesat Communications Ltd.

and NextPlat B.V.

All material intercompany balances and

transactions have been eliminated in consolidation.

All material intercompany balances and transactions have been

eliminated in consolidation.

receivable and allowance for doubtful accounts

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been exhausted and the potential for recovery is considered remote.

As of June 30, 2022, and 2021, there were no allowances for doubtful

As of September 30, 2022, and 2021, there were no allowances for

doubtful accounts.

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

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value of inventories is recorded to cost of goods sold.

expenses amounted to $106,947 and $146,935, at June 30, 2022 and December 31, 2021, respectively.

expenses amounted to $109,765 and $146,935, at September 30, 2022 and December 31, 2021, respectively.

Prepaid expenses include prepayments

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

Company applies the equity method of accounting to investments when it has significant influence, but not controlling interest, in the

Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership

interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions.

The Company’s proportionate share of the net income resulting from these investments is reported under the line item captioned

“equity method investment income” in our condensed consolidated statements of operations.

The Company’s equity method

investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend

paid, if any.

Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment

may not be recoverable.

Management reviewed the underlying net assets of the investees as of September 30, 2022 and determined that the

Company’s proportionate economic interest in the investees indicate that the investments were not impaired.

The carrying value

of our equity method investment is reported as “Equity method investment in Progressive Care, Inc.

and Subsidiaries” on the

condensed consolidated balance sheets.

Note 7 contains additional information on our equity method investment.

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

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relevant translation rates are as follows:

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

GBP, quarterly average

rate at 1.256640 US$:

for the three and nine months ended September 30, 2022, closing rate at 1.1150 US$:

GBP, quarterly

average rate at 1.176596 US$:

GBP and yearly average rate at 1.258384444 US$:

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

GBP, for the three and nine months ended September 30,

2021 closing rate at 1.342642 US$:

GBP, quarterly average rate at 1.3784972 US$:

GBP and yearly average rate at 1.3853499 US$:

GBP, for the year ended 2021 closing rate

at 1.353372 US$:

the year ended 2021 closing rate at 1.353372 US$:

GBP, yearly average rate at 1.375083 US$:

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

furniture and fixtures

Office furniture and fixtures

Computer equipment

Rental equipment

Leasehold improvements

Website development

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

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

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

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

for Derivative Instruments

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis