What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-03-31 compared with 2022-03-31 · 559 added, 427 removed, 129 unchanged (88% of the section changed)

8 unchanged sentences

to identify forward-looking statements.

or all of the results anticipated by these forward-looking statements may not occur.

Important factors, uncertainties and risks that

may cause actual results to differ materially from these forward-looking statements include, but are not limited to, the Risk Factors

which appear in our filings and reports made with the Securities and Exchange Commission (the “SEC”), our lack of working

capital, the value of our securities, the impact of competition, the continuation or worsening of current economic conditions, technology

and technological changes, a potential decrease in consumer spending and the condition of the domestic and global credit and capital

or all the results anticipated by these forward-looking statements may not occur.

Important factors, uncertainties and risks that may

cause actual results to differ materially from these forward-looking statements include, but are not limited to, the Risk Factors which

appear in our filings and reports made with the Securities and Exchange Commission (the “SEC”), our lack of working capital,

the value of our securities, the impact of competition, the continuation or worsening of current economic conditions, technology and

technological changes, a potential decrease in consumer spending and the condition of the domestic and global credit and capital markets.

Additionally, these forward-looking statements are presented as of the date this Form 10-K is filed with the SEC.

intend to update any of these forward-looking statements.

We do not intend to

update any of these forward-looking statements.

discussion should be read in conjunction with the other sections of this Report, including “Risk Factors,” “Description

9 unchanged sentences

Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.

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

We sell equipment

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

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

Our acquisition of GTC in February 2015 expanded

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

March 2021 Financing

March 5, 2021, the Company entered into a Note Purchase Agreement (the “March 2021 NPA”) by and between the Company and one

individual accredited investor (the “Lender”).

Pursuant to the terms of the March 2021 NPA, the Company sold a convertible

promissory note with a principal amount of $350,000 (the “March 2021 Note”).

The March 2021 Note was a general, unsecured

obligation of the Company and bears simple interest at a rate of 7% per annum and matures on the third anniversary of the date of issuance

(the “Maturity Date”), to the extent that the March 2021 Note and the principal amount and any interest accrued thereunder

have not been converted into shares of the Company’s common stock.

In the event that any amount due under the March 2021 Note was

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

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

The Noteholder had an optional right

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

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

the March 2021 Note price equal to the lesser of (a) $7.50 per share, and (b) a 30% discount to the price of the common stock in the

qualified transaction.

Following an event of default, the conversion price shall be adjusted to be equal to the lower of:

applicable conversion price or (ii) the price per share of 85% of the lowest traded price for the Company’s common stock during

the 15 trading days preceding the relevant conversion.

In addition, subject to the ownership limitations, if a qualified transaction

is completed, without further action from the Noteholder, on the closing date of the qualified transaction, 50% of the principal amount

of this March 2021 Note and all accrued and unpaid interest shall be converted into Company common stock at a conversion price equal

to the 30% discount to the offering price in such qualified transaction, which price shall be proportionately adjusted for stock splits,

stock dividends or similar events.

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

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

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

exchanges, as amended.

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

In addition, the March 2021 NPA includes

customary events of default, including, among others:

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

(iii) bankruptcy or insolvency.

The Company’s issuance of the March 2021 Note under the terms of the March 2021 NPA was made pursuant

to an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”) in reliance on Section

4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.

The investor in the March 2021 Note is an

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

There were no discounts

or brokerage fees associated with this offering.

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

on the Nasdaq Capital Market

shares have been listed on the Nasdaq Capital Market since May 28, 2021.

Our common stock and warrants have been trading on the Nasdaq

Capital Market under the symbols “NXPL” and “NXPLW,” respectively, since January 21, 2022.

Prior to January 21,

2022, our common stock and warrants were traded on the Nasdaq Capital Market under the symbols “OSAT” and “OSATW,”

respectively.

effected a reverse stock split of our common stock at a ratio of 1-for-5 as of 12:01 a.m.

Eastern Time, on May 28, 2021.

No fractional

shares were issued in connection with the reverse stock split and all such fractional interests were rounded up to the nearest whole

number of shares of common stock.

The conversion or exercise prices of our issued and outstanding convertible securities, stock options

and warrants will be adjusted accordingly.

All information presented in this Annual Report on Form 10-K, unless otherwise

indicated herein, assumes a 1-for-5 reverse stock split of our outstanding shares of common stock, and unless otherwise indicated, all

such amounts and corresponding conversion price or exercise price data set forth herein have been adjusted to give effect to such assumed

reverse stock split.

Public Offering

May 28, 2021, Company, entered into an Underwriting Agreement (the “Underwriting Agreement”) with Maxim Group LLC (the “Underwriter”),

pursuant to which the Company agreed to issue and sell to the Underwriter in an underwritten public offering (the “June Offering”)

2,880,000 units consisting of one share of common stock and one warrant exercisable for one share of common stock at a public offering

price of $5.00 per unit (after giving effect to a 1-for-5 reverse stock split, discussed above) for aggregate gross proceeds of approximately

$14,400,000 before deducting underwriting discounts, commissions, and other offering expenses.

The common stock and warrants were immediately

separable and were issued separately.

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

the symbols “OSAT” and “OSATW,” respectively.

In addition, the Company granted the Underwriter a 45-day option

to purchase an additional 432,000 shares of common stock and/or warrants to purchase up to an aggregate of 432,000 shares of common stock,

in any combination thereof, at the public offering price per security, less the underwriting discounts and commissions, to cover over-allotments,

The June Offering closed on June 2, 2021.

connection with closing of the June Offering, the Underwriter partially exercised its overallotment option and purchased an additional

432,000 warrants at $0.01 per warrant for additional gross proceeds to the Company of $4,320.

On June 28, 2021, the Underwriter, upon

the exercise in full of the balance of its over-allotment option, purchased 432,000 additional shares of the common stock for additional

gross and net proceeds after deducting underwriting discounts of $2,160,000 and $1,983,225, respectively.

have issued to the Underwriter warrants to purchase up to a total of 144,000 shares of common stock (5% of the shares of common

stock included in the Units, excluding the over-allotment, if any) (the “Underwriter Warrants”).

The Underwriter Warrants

are exercisable at any time, and from time to time, in whole or in part, during the period commencing 180 days from the effective

date of the registration statement and expire five years from the effective date of the offering, which period is in compliance

with FINRA Rule 5110(e).

The Underwriter Warrants are exercisable at a per share price equal to $5.50 per share, or 110% of the public

offering price per unit in the offering.

The Underwriter Warrants have been deemed compensation by FINRA and are therefore subject to

a 180-day lock-up pursuant to Rule 5110(e)(1) of FINRA.

The underwriter (or permitted assignees under Rule 5110(e)(2)) will not sell,

transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will they engage in any hedging,

short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying

securities for a period of 180 days from the effective date of the registration statement.

In addition, the warrants provide for certain

piggyback registration rights.

The piggyback registration rights provided will not be greater than five years from the effective date

of the registration statement in compliance with FINRA Rule 5110(g)(8).

We will bear all fees and expenses attendant to registering the

securities issuable on exercise of the Underwriter Warrants.

The exercise price and number of shares issuable upon exercise of the Underwriter

Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary cash dividend or our recapitalization,

reorganization, merger or consolidation.

However, the warrant exercise price or underlying shares will not be adjusted for issuances

of shares of common stock at a price below the warrant exercise price.

June Offering of common stock and warrants, and the underwriter’s exercise of the over-allotment option in connection

therewith, resulted in total gross proceeds of approximately $16,560,000, before deducting underwriting discounts, commissions, and

other offering expenses.

of Our Products Through Alibaba

July 13, 2021, we announced that our Global Telesat Communications (“GTC”) unit has entered into an agreement with

Alibaba.com, the B2B (Business-to-Business) e-commerce website owned and operated by Alibaba Group Holding Limited, also known as Alibaba

9988), a Chinese multinational technology company specializing in e-commerce, retail, internet, and technology.

GTC is a Gold-level Supplier on Alibaba.com, the world’s largest Business-to-Business (B2B) e-commerce website.

Under the agreement,

GTC significantly expanded its 24/7/365 e-commerce presence with the launch of its latest global storefront on Alibaba.com on which it

offers a range of satellite IoT and connectivity products.

These will include our specialized satellite tracking products, some of which

operate using the Company’s many ground station-based network processors, and can be used to track and monitor the location

of cars, trucks, trailers, boats, containers, animals, and other remote assets.

Although we currently have a limited range of products

available through the Alibaba storefront due to supply chain constrictions, we plan to ultimately have up to 500 products and connectivity

services available on Alibaba.com.

The agreement will continue on a year-to-year basis.

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.

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

of “coins” or the mining of cryptocurrencies.

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

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

in our efforts.

Consequently, 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 9, 2022, the Company entered into a securities purchase agreement with certain institutional and accredited investors for the

sale by the Company in a private placement of 4,575,429 units, each unit comprising (i) one share of the Company’s common stock,

and (ii) one warrant to purchase one share of common stock.

The offering price of the units was $1.75 per unit.

The warrants included

in the units are exercisable at a price of $1.75 per share and expire three years from the date of issuance.

offering closed on December 14, 2022, and the Company received gross proceeds of approximately $8.0 million for the units.

intends to use the proceeds from the offering for working capital needs, potential acquisitions, joint ventures, and ongoing business

transition activities.

connection with the offering, the Company entered into a registration rights agreement, pursuant to which, among other things, the Company

will prepare and file with the Securities and Exchange Commission (the “SEC”) a registration statement to register for resale

the shares of Common Stock sold in the offering and the shares of Common Stock underlying the Warrants, within 15 calendar days and to

use its best efforts to have the registration statement declared effective as promptly as practical thereafter.

securities 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 securities 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.

in Progressive Care Inc.

On August 30, 2022, the Company

entered into a Securities Purchase Agreement (the “SPA”) with Progressive Care, Inc.

RXMD) (“Progressive”),

which subsequently closed on September 2, 2022.

We purchased a non-controlling interest with a view to enhancing our product and services

Progressive is a Florida health services organization and provider of Third-Party Administration (TPA), data management, COVID-19

related diagnostics and vaccinations, 340B contracted pharmacy services, prescription pharmaceuticals, compounded medications, provider

of tele-pharmacy services, the sale of anti-retroviral medications, medication therapy management (MTM), the supply of prescription medications

to long-term care facilities, and health practice risk management.

Our Chairman, Charles Fernandez, was appointed as the Chief Executive

Officer of Progressive in November 2022 along with our Board member, Mr.

Rodney Barreto, who was appointed to serve as Vice Chairman of

Progressive’s board of directors.

Our holdings in Progressive include preferred stock, common stock, warrants and convertible debt,

and we currently account for it using the equity method.

In addition, we have extended an equity line of credit to Progressive.

Through conversion

of our convertible debt and warrants as well as via securities issuances that would result from utilization of the equity line of credit,

we are able to own more than 50% of the voting equity securities of Progressive should we choose to do so.

We have determined to use our

ownership of the above securities to assert control over Progressive;

and we are in the process of assessing whether we should take steps

to obtain further control of Progressive and/or integrate Progressive’s business with our own;

or whether we should maintain it

as a separate business.

September 2, 2022, transaction with Progressive included the purchase of 3,000 newly issued units of securities from Progressive 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 (“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 500 votes per share.

Likewise, each

share of Series B Preferred Stock is convertible into 500 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 $4.00 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’s Board of Directors, with Mr.

Fernandez appointed to serve as Chairman of Progressive’s Board

of Directors and Mr.

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

On November 11, 2022, the

Progressive 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 to Iliad (the

The accrued and unpaid principal and interest under the note at the time of the purchase was approximately $2.79

The aggregate purchase price paid to Iliad for the Note was $2.3 Million of which NextPlat contributed $1.0 million and Messrs.

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 of a reverse stock split, and

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

In consideration of the concessions in the Debt Modification

Agreement, Progressive issued 105,000 shares of its common stock to the purchasers

of the Note, of which NextPlat, Charles Fernandez and Rodney Barreto, received 45,653, 18,261, and 18,261 shares, respectively, in each case after giving effect to a 1-for-200 reverse stock split enacted

by Progressive Care on December 30, 2022.

November 16, 2022, NextPlat Corp (NASDAQ:

NXPL, NXPLW) (the “Company” or “NextPlat”) entered into a Securities

Purchase Agreement (the “SPA”) with Progressive (OTCQB:

RXMD), pursuant to which the Company has agreed to purchase, from

time to time during the three year term of the SPA, up to an aggregate of $10.0 million of secured convertible debentures from Progressive

(the “Debentures”).

Pursuant to the SPA, all purchases of the Debentures will be made at the Company’s sole election

and the proceeds from each purchase will be used by Progressive only as approved by the Company’s Board of Directors.

the proceeds from each purchase of Debentures will be deposited in a controlled account.

If and when the Company elects to purchase Debentures

under the SPA, the minimum principal amount that can be purchased at any time is $1.0 million.

addition, at the closing of each purchase under the SPA, the Company and Progressive will enter into a Registration Rights Agreement

(each, a “Registration Rights Agreement”) pursuant to which Progressive will agree to register the shares of Progressive

common stock issuable upon conversion in full of the Debentures purchased by the Company at such closing.

accordance with the form of Debenture to be used for each purchase under the SPA, each Debenture will be convertible at any time,

upon the Company’s election, to shares of Progressive’s common stock at a conversion price of $6.0 per share (on a

post-split bases and may be further adjusted from time to time for share dividends, share splits, reverse share splits,

In addition, each Debenture will mature on the third anniversary of its issuance and bear interest at 5.0% per annum, payable

At the Company’s election, interest can be paid in cash, shares of Progressive’s common stock, or some

combination thereof.

Progressive has the right to prepay the Debenture at any time provided that it gives the Company seven (7)

business days advance written notice, during which time the Company could elect to convert the Debenture to Progressive common

Upon the prepayment of a Debenture, Progressive will pay the Company an amount equal to the sum of:

(i) all outstanding

principal under such Debenture, plus (ii) all accrued and unpaid interest under such Debenture through the prepayment date,

multiplied by (iii) 110%.

While amounts are outstanding under a Debenture, Progressive will be subject to certain restrictive

covenants, including with respect to the incurrence of indebtedness, the imposition of liens on Progressive’s assets, changes

to the Progressive’s organization documents, etc.

connection with the SPA, on November 16, 2022, the Company entered into a Security Agreement (the “Security Agreement”) with

Progressive and its subsidiaries, Touchpoint RX, LLC, a Florida limited liability company (“Touchpoint”), Family Physicians

RX, Inc., a Florida corporation (“FPRX”), and ClearMetrX Inc., a Florida corporation (“ClearMetrX” and collectively

with Progressive, Touchpoint and FPRX, the “Borrower Parties”).

Pursuant to the Security Agreement, the Borrower Parties

granted the Company a security interest in all of their respective assets to secure Progressive’s obligations under the Debentures.

2022 Private Placement of Common Stock

December 31, 2021, after markets closed, a securities purchase agreement (the “Purchase Agreement”) was circulated to, and

4 unchanged sentences

Nasdaq on December 31, 2021.

The 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.

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

13 unchanged sentences

meeting of stockholders held on December 16, 2021.

Resource Planning System (ERP)

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

legacy business applications.

The new ERP platform provides better support for our changing business needs and plans for future

global growth.

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

For the year ended

December 31, 2022, 19.2% or approximately $86,000 of the cost was expensed in the period incurred to SG&A and 80.8% or

approximately $362,000 was capitalized and depreciated over its useful life.

On January 1, 2023, the Company completed its

implementation process.

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.

of Our Products Through Alibaba

July 13, 2021, we announced that our Global Telesat Communications (“GTC”) unit has entered into an agreement with Alibaba.com,

the B2B (Business-to-Business) e-commerce website owned and operated by Alibaba Group Holding Limited, also known as Alibaba Group (NYSE:

9988), a Chinese multinational technology company specializing in e-commerce, retail, internet, and technology.

Gold-level Supplier on Alibaba.com, the world’s largest Business-to-Business (B2B) e-commerce website.

Under the agreement, GTC

significantly expanded its 24/7/365 e-commerce presence with the launch of its latest global storefront on Alibaba.com on which it offers

a range of satellite IoT and connectivity products.

These will include our specialized satellite tracking products, some of which operate

using the Company’s many ground station-based network processors and can be used to track and monitor the location of cars, trucks,

trailers, boats, containers, animals, and other remote assets.

Although we currently have a limited range of products available through

the Alibaba storefront due to supply chain constrictions, we plan to ultimately have up to 500 products and connectivity services available

on Alibaba.com.

The agreement will continue a year-to-year basis.

on the Nasdaq Capital Market

shares have been listed on the Nasdaq Capital Market since May 28, 2021.

Our common stock and warrants have been trading on the Nasdaq

Capital Market under the symbols “NXPL” and “NXPLW,” respectively, since January 21, 2022.

Prior to January 21,

2022, our common stock and warrants were traded on the Nasdaq Capital Market under the symbols “OSAT” and “OSATW,”

respectively.

Accounting Policies and Estimates

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These estimates and assumptions are affected by management’s applications of accounting

Critical accounting policies for our company include accounting for stock-based compensation.

Critical accounting policies for our company include the following:

Revenue Recognition and Unearned Revenue

The Company recognizes revenue

from satellite services when earned, as services are rendered or delivered to customers.

Equipment sales revenue is recognized when the

equipment is delivered to and accepted by the customer.

Only equipment sales are subject to warranty.

Historically, the Company has not

incurred significant expenses for warranties.

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

liabilities and once shipped is recognized as revenue.

The Company also records as contract liabilities, certain annual plans for airtime,

which are paid in advance.

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

Unbilled revenue is recognized for airtime

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

The Company’s customers

generally purchase a combination of our products and services as part of a multiple element arrangement.

The Company’s assessment

of which revenue recognition guidance is appropriate to account for each element in an arrangement can involve significant judgment.

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

The Company recognizes revenue

when its customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive

in exchange for those goods or services.

To determine revenue recognition for arrangements that the Company determines are within the

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

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

(ii) identify the performance obligations

in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

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

The five-step model is applied to contracts when it is probable

that we will collect the consideration we are entitled to in exchange for the goods or services transferred to the customer.

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

and determine those that are performance obligations and assess whether each promised good or service is distinct.

We then recognize revenue

in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation

is satisfied.

compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the

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fair value of the award.

to ASC Topic 718, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement

date.” The expense is recognized over the vesting period of the award.

Until the measurement date is reached, the total amount

of compensation expense remains uncertain.

The Company initially records compensation expense based on the fair value of the award at

the reporting date.

Further, ASC Topic 718, provides guidance about which changes to the terms or conditions of a share-based payment

award require an entity to apply modification accounting in Topic 718, such as the repricing of share options, which would revalue those

options and the accounting for the cancellation of an equity award whether a replacement award or other valuable consideration is issued

in conjunction with the cancellation.

If not, the cancellation is viewed as a replacement and not a modification, with a repurchase price

In June 2018, the FASB issued

ASU 2018-07, Compensation – Stock Compensation.

This update is intended to reduce cost and complexity and to improve

financial reporting for share-based payments issues to non-employees (for example, service providers, external legal counsel, suppliers,

The ADU expands the scope of ASC 718, Compensation - Stock Compensation, which currently only includes share-based payments issued

to employees, also includes share-based payments issues to non-employees for goods and services.

Consequently, the accounting for share-based

payment to non-employees and employees will be substantially aligned.

This standard will be effective for the financial statements issues

by public companies for the annual and interim periods beginning after December 15, 2018.

Early adoption of the standard is permitted.

The standard will be applied in a retrospective approach for each period presented.

Management adopted this standard on January 1, 2019.

The Company estimated the fair value of stock options granted using the

Black-Scholes option-pricing formula.

This fair value is then amortized on a straight-line basis over the requisite service periods of

the awards, which is generally the vesting period.

The Company’s determination of the fair value using the option-pricing model

is affected by the stock price as well as assumptions regarding the number of highly subjective variables.

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

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Actual results may differ significantly from those estimates.

Significant estimates made by management include, but are not limited to,

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

Significant estimates made by management include, but are not limited to, the assumptions used to calculate stock-based

compensation, and common stock and options issued for services, receivables, the useful lives of property and equipment, and intangible

assets, the estimate of the fair value of the lease liability and related right of use assets and the estimates of the valuation allowance

on deferred tax assets.

of Exchange Rate on Results

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rate at 1.2369 US$:

GBP for the year ended December 31, 2020, closing rate at 1.3665 US$:

GBP for the year ended December 31, 2021, closing rate at 1 .

GBP, yearly average rate at 1.3750 US$:

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The net effect on revenues were impacted by the differences in exchange rate from yearly average exchange of 1.2369 to 1.3751.

Had the yearly average rate remained, sales would have been lower by $459,458.

GTC comparable sales in GBP, its home currency, increased

34.0% or £984,146, from £2,890,408 to £3,874,554 for the year ended December 31, 2021, as compared to December 31,

Had the yearly average rate remained, sales would have been higher by approximately $953,000.

GTC comparable sales in GBP, its home currency,

increased 77.9% or approximately £3.0 million, from approximately £3.9 million to approximately £6.9 million for the

year ended December 31, 2022, as compared to December 31, 2021.

the year ended December 31, 2021, GTC represents 68.8% of total company sales and as such, currency rate variances have an impact on

The net effect on revenues were impacted by the differences in exchange rate from yearly average exchange of 1.2866 to 1.3750.

Had the yearly average rate remained, sales would have been lower by $35,347.

GTC comparable sales in GBP, its home currency, decreased

8.0% or £251,733, from £3,142,634 to £2,890,901 for the year ended December 31, 2020, as compared to December 31, 2019.

Had the yearly average rate remained, sales would have been lower by approximately $459,000.

GTC comparable sales in GBP, its home currency,

increased 34.0% or £984,000, from £2.9 million to £3.9 million for the year ended December 31, 2021, as compared to

December 31, 2020.

of Operations

For the years ended December 31, 2021, and 2020, revenues generated were approximately $7,739,910 and $5,689,796, an increase

of $2,050,114 or 36.0%.

Revenues were derived primarily from the sales of satellite phones, locator beacons, IoT GPS trackers, terminals,

accessories and additional and recurring airtime plans.

Comparable sales for Orbital Satcom Corp.

increased 22.4% or $441,132, from $1,970,944

to $2,412,076.

Comparable sales for GTC increased 43.3% or $1,608,982, from $3,718,851 to $5,327,833.

The overall sales increase is attributable

to increased sales through Amazon storefronts and product selections, which constituted 63.6% and 73.3% of our total sales for

the years ended December 31, 2021, and 2020, respectively.

For the years ended December 31, 2022, and 2021, revenues generated were

approximately $11.7 million and approximately $7.7 million, an increase of approximately $4.0 million or 51.3%.

Revenues were derived

primarily from the sales of satellite phones, locator beacons, IoT GPS trackers, terminals, accessories and additional and recurring airtime

Comparable sales for Orbital Satcom Corp increased to approximately $3.2 million from approximately $2.4 million or an increase

of approximately $825,000 or 34.2%.

Comparable sales for GTC increased to approximately $8.5 million from approximately $5.3 million,

or an increase of approximately $3.2 million or approximately 60.1%.

The overall sales increase is attributable to increased sales through

Amazon storefronts and product selections, which constituted 54.3% and 63.6% of our total sales for the years ended December 31, 2022,

and 2021, respectively.

Approximately

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our business, results of operations, financial condition and prospects.

During the years ended December 31, 2021, and 2020, cost of revenues increased to $5,880,187 compared to $4,464,476 for

the year ended December 31, 2020, an increase of $1,415,711 or 31.7%.

We expect our cost of revenues to increase during fiscal 2022 and

beyond, as we expand our operations and begin generating additional revenues under our current business.

However, we are unable at this

time to estimate the amount of the expected increases.

Gross profit margins during the year ended December 31, 2021, and 2020 were 24.0%

and 21.5%, respectively.

The increase in margin was attributable to new product lines with higher margins.

Total operating expenses for the year ended December 31, 2021 were $8,482,056, an increase of $5,222,856, or 160.3%, from

total operating expenses for the year ended December 31, 2020, of $3,259,200.

general and administrative expenses were $1,369,936 and $694,361 for the years ended December 31, 2021 and 2020, respectively, representing

an increase of $675,575 or 97.3%.

The increase is primarily attributable to an increase in medical premiums of $38,441, due to additional

employees, premiums related to D&O insurance of $143,575, and a general increase in variable expenses which fluctuate

as sales increase.

wages and payroll taxes were $1,838,531 and $769,391 for the year ended December 31, 2021 and 2020, respectively, representing an

increase of $1,069,140, or 139.0%.

The increase was attributable to an increase in officers, personnel and increased payroll to meet

legal minimum in the UK.

compensation for the year ended December

31, 2021 and 2020 were non-cash expenses.

For the years ended December 31, 2021 and 2020, the Company recorded $3,758,424 and $904,900

for stock-based compensation, an increase of $2,853,524 or 315.3%.

For the year ended December 31, 2021, the expense was for recruiting

and retaining executive management as well as increasing the number of directors, which resulted in an amount of $2,481,071 for

awards of restricted stock and $1,277,353 related to the grant of options.

For the year ended December 31, 2020, the expense was for

the issuance of 2,752,000 fully vested options to purchase shares of the Company’s stock to management and a director with an average

exercise price of $0.24 and the issuance of 30,000 shares of the Company’s stock to consultants valued at $74,000.

fees were $1,198,063 and $595,622 for the years ended December 31, 2021 and 2020, respectively, representing an increase of $602,441

For the year ended December 31, 2021, the increase in professional fees were primarily for;

legal and other fees related to

the public company expenses of $358,781, director fees of $97,791, associated with the addition of four independent directors, and

capital raising professional fees of $145,869.

For the year ended December 31, 2020, the increase was primarily due to an increase

in fees to consultants of $143,406 and fees for investor relations of $17,500, relating to equity raising services, offset by a decrease

legal expenses of $26,770, accounting fees of $21,205 and a reduction of public company expense of $8,564.

and amortization expenses were $317,102 and $294,926 for the years ended December 31, 2021 and 2020, respectively, representing an

increase of $22,176, or 7.5%.

The increase was attributable to increase in fixed assets.

During the years ended December 31, 2022, and 2021, cost of sales increased

to approximately $9.2 million compared to approximately $5.9 million for the year ended December 31, 2021, an increase of approximately

$3.3 million or 56.8%.

We expect our cost of revenues to increase during fiscal 2023 and beyond, as we expand our operations and begin

generating additional revenues under our current business.

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

Gross profit margins during the year ended December 31, 2022, and 2021 were 21.2% and 24.0%, respectively.

The decrease in

margin was attributable 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 year ended December 31, 2022 were approximately $9.7 million, an increase of approximately

$1.2 million, or 14.7%, from total operating expenses for the year ended December 31, 2021, of approximately $8.5 million.

Factors contributing

to the increase are described below.

general and administrative expenses were approximately $5.1 million for both years ended December 31, 2022 and 2021, respectively.

Stock based compensation decreased approximately $785,000 which was offset by increases in information technology expense, insurance,

rent, marketing, travel and variable expenses which increase with sales.

wages and payroll taxes were approximately $2.6 million and $1.8 million for the years ended December 31, 2022, and 2021, respectively,

representing an increase of approximately $726,000, or 39.5%.

The increase is a result of executive management additions and an increase

in personnel.

fees were approximately $1.6 million and $1.2 million for the years ended December

31, 2022, and 2021, respectively, representing an increase of approximately $354,000 or 29.6%.

The increase in professional fees were

primarily due to an increase in legal, accounting and public company expenses of approximately $479,000, an increase in director fees

of approximately $99,000, associated with the two additional independent directors offset by a reduction to the current director fee structure,

decrease in other professional fees of approximately $224,000, related to capital raising efforts.

and amortization expenses were approximately $490,000 and $317,000 for the years ended December 31, 2022 and 2021, respectively,

representing an increase of approximately $173,000, or 54.5%.

The increase was attributable to fixed asset additions.

expect our expenses in each of these areas to continue to increase during fiscal 2023 and beyond as we expand our operations and begin

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Other (Income) Expense.

Our total other expenses were $1,485,329 and $729,495 during the years ended December 31, 2021 and 2020,

respectively, representing an increase of $755,834 or 103.6%.

The increase was attributable to the Company’s increase

in interest expense of $445,276 due to convertible notes payable, exchange rate variances and gain on extinguishment of debt in 2020

Loss before Income Taxes .

We recorded net loss before income tax of $8,107,662 for the year ended December 31, 2021 as compared to

a net loss of $2,763,375, for the year ended December 31, 2020.

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

Our total other expenses were approximately $132,000 and $1.5 million during

the years ended December 31, 2022, and 2021, respectively, representing a decrease of approximately $1.4 million or 91.1%.

was attributable to the Company’s decrease in interest expense of approximately $1.4 million related to convertible notes payable.

Loss Before Income Tax & Equity of Affiliate .

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

approximately $7.3 million and $8.1 million for the years ended December 31, 2022 and 2021, respectively.

The increase is a result of

the factors as described above.

for Income Taxes and Income Tax Expense .

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of $87,000 and $0, respectively.

We recorded net loss after income tax of $8,107,662 for the year ended December 31, 2021 as compared to a net loss of $2,763,375

in Net Losses of Affiliate.

We recorded a net loss in equity of affiliate of approximately $1.7 million for the year ended December

See Note 7 – Equity Method Investment in Progressive Care Inc.

and Subsidiaries.

For the year ended December 31, 2021,

there were no losses or income.

We recorded net loss of approximately $9.2 million and $8.1 million, for the years ended December 31, 2022 and 2021, respectively.

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

Comprehensive

We recorded a gain (loss) for foreign currency translation adjustments for the year ended December 31, 2021 and 2020 of $46,068

We recorded a (loss) gain for foreign currency translation adjustments for the year ended December 31, 2022, and 2021 of approximately

($44,000) and $46,000, respectively.

The fluctuations of the increase/decrease are primarily attributable to exchange rate variances.

Comprehensive

loss for the year ended December 31, 2021 was $8,061,594 as compared to loss of $2,804,055 for the year ended December 31, 2020.

Comprehensive loss for the year ended December 31, 2022 and 2021, was approximately $9.2 million and $8.1 million, respectively.

and Capital Resources

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been sufficient to further the growth of the Company’s core business.

The combined proceeds from the June Offering of $16,560,000

and December Offering of $7,225,038 provides sufficient cash resources for the Company to meet its operating needs.

Furthermore, the

available cash resources permit investment to expand existing business, investments in expanding our e-commerce platforms, and the development

of digital asset initiatives.

Should these initiatives and results from operations not prove successful, we will need to raise additional

capital through debt facilities, and/or public or private equity or debt financings to continue operations.

The Company can provide

no assurance as to the successful conclusion of the financings.

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

on an ongoing basis.

At December 31, 2021, we had a cash balance of $17,267,978 and working capital is $16,594,207.

reported a net increase in cash for the year ended December 31, 2021, as compared to December 31, 2020, of $16,539,216 primarily as a

result of net cash proceeds received proceeds from the June Public Offering.

The combined proceeds from the June 2021 Offering of approximately

$16.6 million, January 2022 Offering of approximately $7.2 million and December 2022 Offering of approximately $8.0 million provide sufficient

cash resources for the Company to meet its operating needs.

Furthermore, the available cash resources permit investment to expand existing

business, investments in expanding our e-commerce platforms, and the development of digital asset initiatives.

Should these initiatives

and results from operations not prove successful, we will need to raise additional capital through debt facilities, and/or public or

private equity or debt financings to continue operations.

The Company can provide no assurance as to the successful conclusion of the

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

operate on an ongoing basis.

At December 31, 2022, we had a cash balance of approximately $18.9 million and working capital is

approximately $19.2 million.

We reported a net increase in cash for the year ended December 31, 2022, as compared to December 31,

2021, of approximately $1.6 million primarily as a result of net cash proceeds received from the January 2022 and December 2022

Offering, and offset by the investment in Progressive Care, Inc.

during the third quarter of 2022.

believe that our existing working capital and our future cash flows from operating activities will provide sufficient cash to enable

us to meet our operating needs for the next twelve months.

current assets on December 31, 2022, increased 9.3% to approximately $21.2 million, from approximately $19.4 million or an increase of

approximately $1.8 million, from December 31, 2021.

The increases included cash of approximately $1.6 million, net accounts receivable

of approximately $34,000, inventory of approximately $267,000, unbilled revenue of $41,000, offset by decreases in VAT receivable of

approximately $59,000, prepaid expenses current portion of approximately $51,000, and other current assets of approximately $49,000.

current liabilities on December 31, 2022, decreased to approximately $2.1

million from $2.8 million for a decrease of approximately $722,000, or 26.0% from December 31, 2021.

The decrease is primarily related

to the stock subscription payable of approximately $1.4 million, applied towards the January 5, 2022, private placement of common stock,

of approximately $7.2 million.

cash flows used in operating activities for the year ended December 31, 2022 amounted to approximately $3.6 million and were attributable

to our net loss of approximately $9.2 million, offset by depreciation expense of approximately $465,000, amortization of intangible asset

of approximately $25,000, right of use asset of approximately $106,000, write-off of website development costs of approximately $43,000,

share of loss from equity method investment of approximately $1.7 million, stock-based compensation related to the fair value of options

granted of approximately $823,000, and stock-based compensation related to issuance of restricted stock awards of approximately $2.2

Changes in operating assets and liabilities were reflected by increases in accounts receivable of approximately $34,000, unbilled

revenue of approximately $41,000, inventory of approximately $267,000, lease liabilities of approximately $101,000, contract liabilities

of $350, and offset by increases in prepaid and other current assets of approximately $101,000, VAT receivable of approximately $59,000,

provision for income taxes of approximately $37,000, and accounts payable and accrued expenses of approximately $455,000.

cash flows used in operating activities for the year ended December 31, 2021 amounted to approximately $4.1 million and were attributable

to our net loss of approximately $8.1 million and gain from debt extinguishment of approximately $21,000, offset by depreciation and

amortization expense of approximately $317,000, right of use asset of approximately $33,000, amortization of intangible asset of approximately

$25,000, amortization of debt discount of convertible debt of approximately $1,4 million, stock-based compensation related to the fair

value of options granted of approximately $1.3 million and stock-based compensation related to issuance of restricted stock awards of

approximately $2.5 million.

Changes in operating assets and liabilities were reflected by increases in accounts receivable of approximately

$173,000, unbilled revenue of approximately $25,000, inventory of approximately $658,000, prepaid and other current assets of approximately

$166,000, VAT receivable of approximately $491,000, and lease liabilities of approximately $33,000, and offset by increases in accounts

payable and accrued expenses of approximately $11,000, provision for income taxes of approximately $38,000, and contract liabilities

cash flows used in investing activities were approximately $7.7 million and $229,000 for the years ended December 31, 2022, and 2021,

respectively.

For the year ended December 31, 2022, we purchased equipment, capitalized software and website development for approximately

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

For the year ended December 31, 2021,

we purchased equipment, capitalized software and website development for approximately $229,000.

cash flows provided by financing activities were approximately $13.0 million and $20.8 million for the years ended December 31,

2022, and 2021, respectively.

During the year ended December 31, 2022, we had net proceeds from the January 2022 Offering of

approximately $5.6 million, and the December 2022 Offering of approximately $7.5 million, which was offset by repayments from;

coronavirus loan of approximately $60,000 and repayments to related party payable of approximately $7,000.

During the year ended

December 31, 2021, we had proceeds from convertible notes payable of $350,000, the June 2021 Offering of approximately $14.1

million, warrant exercise of approximately $4.6 million, and over-allotments of common stock and warrants of approximately $2.0

million, proceeds from options exercise of $5,000, which was offset by repayments from notes payable for approximately $122,000,

coronavirus loan of approximately $28,000 and repayments to related party payable of approximately $67,000.

Financing Activities

December 2021 Offering

2022 Private Placement of Common Stock

December 31, 2021, after markets closed, a securities purchase agreement (the “Purchase Agreement”) was circulated to, and

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Nasdaq on December 31, 2021.

the year ended December 31, 2021, the Company received gross proceeds of $1,400,000 of the $7,225,038, pursuant to the December Offering,

see Note 19 Subsequent events.

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.

on the Nasdaq Capital Market

shares have been listed on the Nasdaq Capital Market since May 28, 2021.

Our common stock and warrants have been trading on the Nasdaq

Capital Market under the symbols “NXPL” and “NXPLW,” respectively, since January 21, 2022.

Prior to January 21,

2022, our common stock and warrants were traded on the Nasdaq Capital Market under the symbols “OSAT” and “OSATW,”

respectively.

effected a reverse stock split of our common stock at a ratio of 1-for-5 as of 12:01 a.m.

Eastern Time, on May 28, 2021.

No fractional

shares were issued in connection with the reverse stock split and all such fractional interests were rounded up to the nearest whole

number of shares of common stock.

The conversion or exercise prices of our issued and outstanding convertible securities, stock options

and warrants will be adjusted accordingly.

All information presented in this Annual Report on Form 10-K, unless otherwise

indicated herein, assumes a 1-for-5 reverse stock split of our outstanding shares of common stock, and unless otherwise indicated, all

such amounts and corresponding conversion price or exercise price data set forth herein have been adjusted to give effect to such assumed

reverse stock split.

Public Offering

May 28, 2021, Company, entered into an Underwriting Agreement (the “Underwriting Agreement”) with Maxim Group LLC (the “Underwriter”),

pursuant to which the Company agreed to issue and sell to the Underwriter in an underwritten public offering (the “June Offering”)

2,880,000 units consisting of one share of common stock and one warrant exercisable for one share of common stock at a public offering

price of $5.00 per unit (after giving effect to a 1-for-5 reverse stock split, discussed above) for aggregate gross proceeds of approximately

$14,400,000 before deducting underwriting discounts, commissions, and other offering expenses.

The common stock and warrants were immediately

separable and were issued separately.

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

the symbols “OSAT” and “OSATW,” respectively.

In addition, the Company granted the Underwriter a 45-day option

to purchase an additional 432,000 shares of common stock and/or warrants to purchase up to an aggregate of 432,000 shares of common stock,

in any combination thereof, at the public offering price per security, less the underwriting discounts and commissions, to cover over-allotments,

The June Offering closed on June 2, 2021.

connection with closing of the June Offering, the Underwriter partially exercised its overallotment option and purchased an additional

432,000 warrants at $0.01 per warrant for additional gross proceeds to the Company of $4,320.

On June 28, 2021, the Underwriter, upon

the exercise in full of the balance of its over-allotment option, purchased 432,000 additional shares of the common stock for additional

gross and net proceeds after deducting underwriting discounts of $2,160,000 and $1,983,225, respectively.

have also agreed to issue to the Underwriter (or its permitted assignees) warrants to purchase up to a total of 144,000 shares of common

stock (5% of the shares of common stock included in the Units, excluding the over-allotment, if any) (the “Underwriter Warrants”).

The Underwriter Warrants are exercisable at any time, and from time to time, in whole or in part, during the period commencing

180 days from the effective date of the registration statement and expire five years from the effective date of the offering,

which period is in compliance with FINRA Rule 5110(e).

The Underwriter Warrants are exercisable at a per share price equal to $5.50 per

share, or 110% of the public offering price per unit in the offering.

The Underwriter Warrants have been deemed compensation by FINRA

and are therefore subject to a 180-day lock-up pursuant to Rule 5110(e)(1) of FINRA.

The underwriter (or permitted assignees under Rule

5110(e)(2)) will not sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will

they engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition

of the warrants or the underlying securities for a period of 180 days from the effective date of the registration statement.

the warrants provide for certain piggyback registration rights.

The piggyback registration rights provided will not be greater than five

years from the effective date of the registration statement in compliance with FINRA Rule 5110(g)(8).

We will bear all fees and expenses

attendant to registering the securities issuable on exercise of the Underwriter Warrants.

The exercise price and number of shares issuable

upon exercise of the Underwriter Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary

cash dividend or our recapitalization, reorganization, merger or consolidation.

However, the warrant exercise price or underlying shares

will not be adjusted for issuances of shares of common stock at a price below the warrant exercise price.

June Offering of common stock and warrants, and the underwriter’s exercise of the over-allotment option in

connection therewith, resulted in total gross proceeds of approximately $16,560,000 before

deducting underwriting discounts, commissions, and other offering expenses.

2021 Financing

March 5, 2021, the Company entered into a Note Purchase Agreement by and between the Company and one individual accredited investor where

the Company sold a convertible promissory note with a principal amount of $350,000 (the “March 2021 Note”).

The Noteholder

had an optional right of conversion such that the Noteholder may elect to convert his Note, in whole or in part, outstanding as of such

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

under the March 2021 Note by a price equal to the lesser of (a) $1.50 per share, and (b) a 30% discount to the price of the common stock

in the qualified transaction, subject to certain adjustments.

the years ended December 31, 2021, and 2020, we amortized the discount on the debt to interest expense of $1,425,365 and $538,087, resulting

in a balance of unamortized notes payable of $0 and $331,171, respectively.

the year ended December 31, 2021, the Holders converted a total of $1,644,268 of the convertible debt to 1,345,468 shares of common shares.

2020 Financing

December 1, 2020, the Company entered into a Note Purchase Agreement by and among the Company and certain lenders where the Company sold

an aggregate principal amount of $244,000 of its convertible promissory notes (the “December 2020 Notes”).

The December 2020

Note holders had an optional right of conversion such that a Noteholder may elect to convert his December 2020 Note, in whole or in part,

outstanding as of such time, into the number of fully paid and non-assessable shares of the Company’s common stock as determined

by dividing the outstanding indebtedness by $0.25, subject to certain adjustments.

2020 Financing

August 21, 2020, the Company entered into a Note Purchase Agreement by and among the Company and certain lenders where the Company sold

an aggregate principal amount of $933,000 of its convertible promissory notes (the “August 2020 Notes”).

The August 2020

Note holders had an optional right of conversion such that a Noteholder may elect to convert his August 2020 Note, in whole or in part,

outstanding as of such time, into the number of fully paid and non-assessable shares of the Company’s common stock as determined

by dividing the outstanding indebtedness by $0.20, subject to certain adjustments.

Protection Program Loan

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 was 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.

For the year ended December 31, 2020, the Company recorded $15,624

as current portion of notes payable and $5,208 as notes payable long term.

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

to apply for a Coronavirus Interruption Loan, offered by the UK government, for an amount up to £250,000.

On July 16, 2020 (the

“Issue Date”), GTC, entered into a Coronavirus Interruption Loan Agreement (“Debenture”) by and among the Company

and HSBC UK Bank PLC (the “Lender”) for an amount of £250,000, or USD $338,343 at an exchange rate of GBP:USD of 1.3533720.

The Debenture bears interest beginning July 16, 2021, at a rate of 3.99% per annum over the Bank of England Base Rate (0.1% as of July

16, 2020), payable monthly on the outstanding principal amount of the Debenture.

The Debenture has a term of 6 years from the date of

drawdown, July 15, 2026, the “Maturity Date”.

The first repayment of £4,166.67 (exclusive of interest) will be made

13 month(s) after July 16, 2020.

Voluntary prepayments are allowed with 5 business days’ written notice and the amount of the prepayment

is equal to 10% or more of the limit 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

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

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

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

Upon the occurrence

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

As of December 31, 2021, and 2020, the Company has recorded $56,391

and $41,831 as current portion of notes payable and $253,757 and $320,626 as notes payable long term, respectively.

Line of Credit

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

The one-year term loan was

paid monthly, had an interest rate of 9.72%, with late payment penalty interest of 11.72%.

For the years ended December 31, 2021, and

2020, the Company recorded interest expense of $0 and $952, respectively.

The short-term line of credit balance as of December 31, 2021,

and 2020, was $0, respectively.

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

The over advanced was not

renewed by the Company on December 31, 2021.

The over-advance limit was £25,000 or $34,377 at an exchange rate of 1.375083, 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 has an American Express account for Orbital

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

current assets at December 31, 2021 increased 1,311.54% to $19,374,956, from $1,372,467 or an increase of $18,002,489, from December

The increases included cash of $16,539,216, net accounts receivable of $172,805, inventory of $658,274, unbilled revenue of

$24,866, VAT receivable of $491,417, prepaid expenses current portion of $95,284, and other current assets of $20,627.

expenses primarily represent costs for the Coconut Grove, FL office, which is expected to be operational during April 2022.

current liabilities at December 31, 2021 increased to $2,780,749 from $1,516,525 for an increase of $1,264,224, or 83.36% from December

The increase is primarily related to the stock subscription payable of $1,400,000, applied towards the January 5, 2022, private

placement of common stock, of approximately $7.2 million.

See Note 19 - Subsequent Events.

cash flows used in operating activities for the year ended December 31, 2021 amounted to $4,092,090 and were attributable to our

net loss of $8,107,662 and gain from debt extinguishment of $20,832, offset by depreciation and amortization expense of $317,102, right

of use of $32,963, amortization debt discount of convertible debt of $1,425,365, stock-based compensation related to the fair value of

options granted of $1,277,353 and stock-based compensation related to issuance of restricted stock awards of $2,481,071.

in operating assets and liabilities were reflected by increases in accounts receivable of $172,805, unbilled revenue of $24,866, inventory

of $658,274, prepaid and other current assets of $165,778, VAT receivable of $491,417, and lease liabilities of $32,936, and offset

by increases in accounts payable and accrued expenses of $10,741, provision for income taxes of $37,824, and contract liabilities

cash flows used in operating activities for the year ended December 31, 2020 amounted to $836,980 and were attributable to;

of $2,763,375, gain from debt extinguishment of $269,261, offset by;

depreciation and amortization expense of $294,926, right of use

of $28,073 stock-based compensation of $74,000, amortization debt discount of convertible debt of $956,554, and the fair value of options

issued of $830,900.

Changes in operating assets and liabilities were reflected by decreases in accounts receivable of $67,322, inventory

of $4,876, prepaid and other current assets of $85,686, and offset by increases in accounts payable and accrued expenses of $111,616,

provision for income taxes of $2,899, contract liabilities of $4,503, and lease liability of $28,158.

cash flows used in investing activities were $229,307 and $34,903 for the years ended December 31, 2021 and 2020, respectively.

year ended December 31, 2021, we purchased equipment, capitalized software and website development of $229,307.

For the year ended December

31, 2020, we purchased equipment and websites upgrades of $34,903.

cash flows provided by financing activities were $20,817,317 and $1,565,963 for the years ended December 31, 2021 and 2020, respectively.

During the year ended December 31, 2021, we had proceeds from convertible notes payable of $350,000, the June Offering of $14,061,984,

warrant exercise of $4,629,539, and over-allotments of common stock and warrants of $1,987,589, proceeds from options exercise

of $5,000, which was offset by repayments from;

notes payable for $121,848, coronavirus loan of $28,195 and repayments to related

party payable of $66,752.

During the year ended December 31, 2020, we had proceeds from related party for $50,989, convertible debt $1,177,000

and proceeds from notes payable of 362,457.

For the year ended December 31, 2020, we had repayments of the Amazon line of credit of $24,483.

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.

2022 Private Placement of Common Stock

December 9, 2022, the Company entered into a securities purchase agreement with certain institutional and accredited investors for the

sale by the Company in a private placement of 4,575,429 units, each unit comprising (i) one share of the Company’s common stock,

and (ii) one warrant to purchase one share of common stock.

The offering price of the units was $1.75 per unit.

The warrants included

in the units are exercisable at a price of $1.75 per share and expire three years from the date of issuance.

offering closed on December 14, 2022, and the Company received gross proceeds of approximately $8.0 million for the units.

intends to use the proceeds from the offering for working capital needs, potential acquisitions, joint ventures, and ongoing business

transition activities.

connection with the offering, the Company entered into a registration rights agreement, pursuant to which, among other things, the Company

will prepare and file with the Securities and Exchange Commission (the “SEC”) a registration statement to register for resale

the shares of Common Stock sold in the offering and the shares of Common Stock underlying the Warrants, within 15 calendar days and to

use its best efforts to have the registration statement declared effective as promptly as practical thereafter.

securities 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 securities 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.

in Progressive Care Inc.

September 2, 2022, we closed a transaction with Progressive, pursuant to which we purchased 3,000 newly issued units of securities from

Progressive (the “Units”) at a price per Unit of $2,000 for an aggregate purchase price of $6.0 million (the “Unit Purchase”).

Each Unit consists of one share of Series B Convertible Preferred Stock of Progressive (“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 and has 500 votes per share.

Likewise, each share of Series B Preferred Stock is convertible into 500 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’s Board of Directors, with Mr.

Fernandez appointed to serve as Chairman of Progressive’s Board

of Directors and Mr.

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

On November 11, 2022, the

Progressive Board of Directors elected Mr.

Fernandez to serve as the Progressive’s Chief Executive Officer.

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 to Iliad (the

The accrued and unpaid principal and interest under the note at the time of the purchase was approximately $2.79

The aggregate purchase price paid to Iliad for the Note was $2.3 Million of which NextPlat contributed $1.0 million and Messrs.

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.

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.

the conversion price under the note was changed to $0.02 per share of Common Stock.

Pursuant to the Debt Modification Agreement, NextPlat,

Fernandez and Barreto and the other purchasers of the Note have the right, exercisable at any time, to redeem all or any portion

The Debt Modification Agreement also provides that the Note will automatically convert upon the later to occur of:

completion by Progressive Care of a reverse stock split, and (b) the listing of Progressive’s common stock on a national exchange.

In consideration of the concessions in the Debt Modification Agreement, Progressive issued 105,000 shares of its common stock to the purchasers

by Progressive Care on December 30, 2022.

Sheet Arrangements

have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties.

We have not entered into any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that

are not reflected in our consolidated financial statements.

Furthermore, we do not have any retained or contingent interest in assets

transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.

We have not entered any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are

not reflected in our consolidated financial statements.

Furthermore, we do not have any retained or contingent interest in assets transferred

to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.

Quantitative and Qualitative Disclosures about Market Risk.

with the rules applicable to “Smaller Reporting Companies” we have omitted

information required by this Item.

with the rules applicable to “Smaller Reporting Companies” we have omitted information required by this Item.

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-K

Item 7. Management’s Discussion and Analysis