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Item 9A. Controls and Procedures

2023-03-31 compared with 2022-03-31 · 1073 added, 2655 removed, 807 unchanged (82% of the section changed)

1 unchanged sentence

Conclusions Regarding Effectiveness of Disclosure Controls and Procedures

controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports

we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules

and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer

and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating our

disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated,

can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in

evaluating and implementing possible controls and procedures.

management does not expect that our disclosure controls and procedures will prevent all error and all fraud.

A control system, no matter

how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls

must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can

provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

These inherent limitations include

the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no

assurance that any design will succeed in achieving its stated goals under all potential future conditions.

of the end of the period covered by this Annual Report, under the supervision and with the participation of management, including the

Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”), the Company conducted an evaluation of its

disclosure controls and procedures.

Based on this evaluation, the Certifying Officers have concluded that the Company’s disclosure

controls and procedures were not effective as of December 31, 2021, due to our limited internal audit functions and lack of ability to

have multiple levels of transaction review.

As defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, the term “disclosure

controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required

to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported,

within the time periods specified in the Commission’s rules and forms.

Disclosure controls and procedures include, without limitation,

controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits

under the Exchange Act is accumulated and communicated to the Company’s management, including the Certifying Officers, to allow

timely decisions regarding required disclosure.

Company intends to address the foregoing deficiency by upgrading its accounting software to an ERP (“Enterprise Resource Planning”),

a cloud-based solution, which would add the necessary controls to manage day to day activities such as accounting, procurement, project

management, risk management and compliance as well as to automate the consolidation process of its entities, adding a level of reliability

to the Company’s financial reporting.

The Company proposes to add personnel to address the lack of ability to have multiple level

transaction review.

Management is addressing these steps immediately and has executed an agreement on August 11, 2021, to start implementation

of replacing its current software to an ERP cloud-based solution.

Management anticipates the new ERP solution to be fully operational

by the end of the 2022 fiscal year.

of disclosure controls and procedures.

on management’s evaluation (with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO)), as

of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures (as defined

in Rules 13a-15I and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to provide

reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded,

processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to

management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding

required disclosure.

Limitations on Controls.

including the CEO and CFO, does not expect that our disclosure controls and procedures will prevent or detect all errors and fraud.

control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute,

assurance that its objectives will be met.

Further, no evaluation of controls can provide absolute assurance that misstatements due to

errors or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered

relative to their costs.

Report on Internal Control over Financial Reporting.

management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)

and 15d-15(f) under the Exchange Act.

Our management is also required to assess and report on the effectiveness of our internal control

over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.

Management assessed the effectiveness of our

internal control over financial reporting as of December 31, 2021.

In making this assessment, we used the criteria set forth by the Committee

of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013).

During our assessment

of the effectiveness of internal control over financial reporting as of December 31, 2021, management identified significant deficiencies

related to (i) our internal audit functions and (ii) a lack of segregation of duties within accounting functions.

Therefore, our internal

controls over financial reporting were not effective as of December 31, 2021.

has determined that our internal audit function is significantly deficient due to insufficient qualified resources to perform internal

audit functions.

to our size and nature, segregation of all conflicting duties may not always be possible or economically feasible.

the extent possible, we will implement procedures to assure that the initiation of transactions, the custody of assets and the recording

of transactions will be performed by separate individuals.

believe that the foregoing steps will remediate the significant deficiency identified above, and we will continue to monitor the effectiveness

of these steps and make any changes that our management deems appropriate.

Due to the nature of this significant deficiency in our internal

control over financial reporting, there is more than a remote likelihood that misstatements which could be material to our annual or

interim financial statements could occur that would not be prevented or detected.

material weakness (within the meaning of PCAOB Auditing Standard No.

5) is a deficiency, or a combination of deficiencies, in internal

control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial

statements will not be prevented or detected on a timely basis.

A significant deficiency is a deficiency, or a combination of deficiencies,

in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by

those responsible for oversight of the company’s financial reporting.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of any evaluation

of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that

the degree of compliance with the policies and procedures may deteriorate.

This Annual Report on

Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial

Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules the SEC

that permit us to provide only management’s report in this annual report.

in Internal Controls

have been no changes in our internal control over financial reporting during the fourth quarter ended December 31, 2021, that have materially

affected, or are reasonably likely to materially affect, our internal control over financial reporting.

and 15d-15(f) under the Securities Exchange Act of 1934.

Our internal control over financial reporting includes policies and procedures

(a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions

(b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements

in accordance with U.S.

generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance

with authorizations of our management and Board of Directors;

and (c) provide reasonable assurance regarding prevention or timely detection

of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

control over financial reporting is a process designed with the participation of our principal executive officer and principal financial

officer or persons performing similar functions to provide reasonable assurance to our management and board of directors regarding the

reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted

accounting principles.

management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022.

In making this assessment,

we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated

Framework (2013).

Based on this assessment our management believes that, as of December 31, 2022, our internal control over financial

reporting is effective under those criteria.

in internal control over financial reporting.

has been no change in our internal control over financial reporting during our fourth fiscal quarter ended December 31, 2022, that has

materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control

over financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant

to rules from the SEC that permit us to provide only management’s report in this annual report.

Other Information.

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Directors, Executive Officers and Corporate Governance.

following table presents information with respect to our executive officers, directors and significant employees as of the date of this

First Elected or Appointed

Chairman and Chief Executive Officer

and President of NextPlat.

Chief Executive Officer of Global Operations

Vice President and Chief Financial Officer

Accounting Officer, Treasurer and Secretary

Vice President of Operations

Chairman and Chief Business Development Strategist

information required by this Item will be included in the Company’s definitive proxy statement to be filed with the SEC within

120 days after December 31, 2022, in connection with the solicitation of proxies for the Company’s 2023 annual meeting of shareholders

(the “2023 Proxy Statement”) and is incorporated herein by reference.

directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until their earlier

4 unchanged sentences

of office at the discretion of the Board of Directors.

of Directors and Executive Officers

following is a brief account of the education and business experience during at least the past five years of our directors and executive

officers, indicating each person’s principal occupation during that period, and the name and principal business of the organization

in which such occupation and employment were carried out.

Fernandez , Director, Executive Chairman and Chief Executive Officer , 60, has served as the Company’s Executive

Chairman since May 28, 2021 and its Chief Executive Officer since June 5, 2021.

Fernandez was a co-founder and the Chairman of Kempstar

(a large-scale marketer of energy and agricultural commodities) from November 2015 through June 2020;

a member of the Supervisory Board

of Smartrac (a RFID products and IoT solutions) from January 2019 through March 2020;

Chief Executive Officer of eApeiron Solutions (a

brand protection and e-commerce company) from June 2016 through December 2018;

served as the founder and Chief Investment Officer of

Barnstar Funds, LP (a fund established in 2012 for investment in special situations across the capital markets) from October 2012 through

and co-founder and Chairman of Lakeview Health Systems, LLC (a private pay, specialized hospital company) from December 2003

through December 2012.

Fernandez was chosen to serve as a director of the Company based on his 30 years’ experience identifying

profitable start-up and dislocation opportunities, building significant value and executing both private and public exit strategies.

Phipps, Director, President of Orbsat and Chief Executive Officer of Global Operations , 56.

Phipps has served as the Chief

Executive Officer of Global Operations since June 2, 2021, and as the Managing Director of the Company’s wholly owned UK subsidiary,

Global Telesat Communications LTD (“GTC”), since 2008.

He served as the President of the Company since February 19, 2015

and as a member of the Board since February 24, 2015, and Chairman of the Board from February 24, 2015 until May 23, 2021 and Chief Executive

Officer of the Company from February 25, 2015 to June 2, 2021.

He has over 20 years’ experience in the communications industry,

during which time he has overseen acquisitions, mergers and capital raising activities, and has more than 35 years of experience of investment

management, finance, and operational roles in several private and public companies.

Phipps was chosen as a director of the Company

based on his knowledge of and relationships in the global satellite communications business.

Thomson, Executive Vice President and Chief Financial Officer, 65.

Thomson has served as Executive Vice President of the

Company since August 24, 2021, and as Chief Financial Officer of the Company since October 9, 2021.

Thomson has over 43 years of

finance and enterprise risk management experience, supporting corporate growth through operational restructuring and business transactions.

Thomson spent twelve years in public accounting with Price Waterhouse in the UK, Venezuela and the United States before taking senior

finance and risk management roles in the broadcast, multi-level marketing, commercial real estate and financial advisory industries.

Thomson served as Chief Compliance Officer of Fairholme Capital Management, L.L.C.

and Fairholme Funds, Inc.

from 2008 to January

Thomson was appointed to the position of Executive Vice President of the Company on August 24, 2021 and had previously provided

consulting services to the Company for a period of one month in 2021 prior to his employment with the Company.

Thomson holds a Bachelor

of Arts in Engineering Science and Economics from Jesus College, Oxford University.

Carlise , Chief Accounting Officer, Treasurer and Secretary , 63, Ms.

Carlise was appointed as the Company’s

Chief Accounting Officer, Treasurer and Secretary on June 22, 2021.

Carlise previously served as the Company’s Chief Financial

Officer, Treasurer and Secretary from June 9, 2015 until the October 16, 2020 expiration of her CFO employment agreement with the Company.

The Company retained her services on a non-exclusive basis as the Company’s Comptroller to facilitate the CFO transition until

December 7, 2020.

Prior thereto she served as a financial advisor to FTE Networks (OTCQX:

FTNW), a provider of infrastructure services

for the telecommunications and wireless sector, from May 2014 through March 2015, and as Chief Financial Officer and director from September

2011 through May 2014.

Prior to FTE Networks, she served as the Chief Executive Officer, Chief Financial Officer and a director of CSI

Consultants Inc., which provided information technology consulting and system design to the industrial and manufacturing sectors, from

July 2010 to September 2011 and as Chief Financial Officer and a director of Las Vegas Railway Express, Inc.

LVRE), a developer

of passenger rail transportation and related ancillary services, from December 2009 through July 2010.

From October 2006 to November

Carlise served as Chief Financial Officer of Shearson Financial Network, Inc., a direct-to-consumer mortgage banking company.

From October 1986 to April 2003, Ms.

Carlise served as Chief Financial Officer, senior vice president and a director of National Record

NRMI) the fourth largest music retailer in the US, as according to number of retail locations, generating approximately

$200 million annually, in 38 states, Hawaii and Guam.

Carlise holds a Bachelor of Science in Finance with a Concentration in Monetary

Economics, from Indiana University of Pennsylvania.

Cohen, Senior Vice President of Operations, 60, Mr.

Cohen was appointed as the Company’s Vice President of Operations on

October 9, 2021.

Cohen has 35 years of experience in the private equity and real estate sectors.

From 1996 through 2009, he was a

Partner at Apollo Real Estate Advisors, where he was involved in the acquisition, financing, asset management and disposition of office,

residential, retail and hospitality properties throughout the United States.

From 2010 through 2016, he was a Managing Director of First

Atlantic Real Estate, where he was head of U.S.

investments for a Europe-based fund.

Most recently, from 2017 to 2019, he was a Partner

at Arel Capital, investing in multifamily assets on behalf of institutional and private investors.

Cohen received his BA from Brown

University and MBA from Columbia Business School.

Ellenoff, Director, Vice Chairman and Chief Business Development Strategist , 62 ,

was appointed to the Board of Directors as Vice Chairman and as the Company’s Chief Business Development Strategist on August

Ellenoff is the founder and a partner at Ellenoff Grossman & Schole LLP, a law

firm based in NYC with more than 120 professionals, and he is a corporate and securities attorney with a focus in business transactions,

mergers and acquisitions and corporate financings.

Ellenoff has represented companies in connection with their initial public offerings,

secondary public offerings, PIPEs, crowdfunding, regulatory compliance, as well as strategic initiatives and general corporate governance

Ellenoff has established his firm as a leader in several alternative finance programs, including SPACs, PIPEs, RDs and Crowdfunding.

Along with other members of his Firm, Mr.

Ellenoff has been involved at various stages with over 300 SPACs and numerous associated SPAC

business combinations.

Ellenoff Grossman & Schole LLP was founded in 1992.

Ellenoff is also a Managing Member at ESQVest LLP,

a venture capital firm that invests in early-stage legal technology companies since its founding in 2014.

Mr Ellenoff’s broad

experience in capital markets and corporate governance matters brings significant expertise in these areas to our Board of Directors.

Delgado , Director , 53, was appointed to the Board of Directors on May 27, 2015.

Delgado is currently the Executive

Officer of the Naval Reserve Special Operations Command South (SOCSOUTH) Detachment 108.

Delgado has served as the President of ASR

Alert Systems since 2018.

He previously served as a Special Agent in the United States Department of Homeland Security from 1995 to 2018

and as the Managing Member of ISR Strategies, LLC, a full-service security consulting company, since 2010.

He is a United States Navy

SEAL with active and reserve service for over twenty-eight years.

In 2006, he was mobilized and served a combat tour in Ramadi, Iraq

with SEAL Team THREE receiving a Navy Commendation Medal with Combat “V”.

He has served with SEAL Teams TWO, THREE, FOUR,

EIGHTEEN and Special Operations Command Central and South.

Delgado has participated in tours of duty in the Middle East, Europe,

Africa and South America.

He has also served as an adjunct instructor at the United States Merchant Marine Academy teaching maritime

security and conducting International Ship Security Code (ISPS) training and assessments.

Delgado was appointed to serve as a director

of the Company based on his leadership and entrepreneurial experience and particular familiarity with the military and governmental agencies.

Carpenter , Director , 66, was appointed to the Board of Directors on May 28, 2021.

From 2006 to 2019, Ms.

has held the offices of CFO, Executive Vice-President of ComSovereign Holding Corp.

(COMS), a Nasdaq company in the aviation industry,

where she has been responsible for the matters of SEC compliance and reporting, accounting, audit, banking, HR and benefits, payroll,

corporate administration, board governance, legal, contracts and risk management.

Carpenter holds a Bachelor’s degree in Accounting

from Oklahoma State University, and a CPA license in the State of Oklahoma;

she is also a Certified Management Accountant (CMA) and Chartered

Global Management Accountant (CGMA).

Carpenter was chosen to serve as a director of the Company based on her leadership positions

in public companies as well as her expertise in compliance and finance.

Cusimano , Director , 75, was appointed to the Board of Directors on May 28, 2021.

Cusimano’s dual career

with the Federal Aviation Administration (FAA) and the United States Air Force Reserve (USAF) spanned three decades of continuous service.

Prior to retiring from the FAA in May 2003, Mr.

Cusimano was a Senior Executive and Deputy Director of the FAA’s Flight Standards

In this role, in addition to day-to-day oversight, his responsibilities included maintaining close and continuous liaison with

representatives of Congress, the aviation industry, including interest groups, the general public, all air carriers, the national

military establishment, other Federal agencies, and foreign flight operations, and airworthiness authorities.

Over the course of his

career at the FAA, he held a number of key management positions including serving at “Acting Director” and as the Division

Manager of the Air Transportation Division and Certification and Surveillance Division.

He also served the FAA in executive level management

positions as Division Manager of the Safety Programs Division within FAA’s Office of Systems Safety which reported directly to

the Administrator of the FAA.

Cusimano’s parallel career as an Air Force officer and pilot spanned 30 years of service, culminating

with attaining the rank of full colonel, and retiring as Wing Commander, 459th Airlift Wing.

He was senior ranking officer in charge

of over 1,400 reservists and nine C-141B/C strategic airlift aircraft which conducted world-wide combat airlift and airlift support missions

for the Air Mobility Command.

He is a highly decorated officer and retired with honors on June 1, 2000.

Cusimano holds an airline

transport pilot certificate, flight engineer certificate, and flight instructor certificate with fixed wing, rotorcraft, and instrument

instructor ratings.

He is also a certified A&P Mechanic with Inspector Authorization authority.

He earned a Bachelor of Arts degree

in experimental psychology from Hofstra University in 1969 and he completed National Security Management School in 1987.

top secret clearances at the FAA and with the Air Force.

Cusimano is certified as an ISO-9000:2000 Auditor with the International

Cusimano was chosen to serve as a director because of his more than 35 years of experience in

government and professional roles including as Acting Director of the FAA.

Miller, Director , 80, was appointed to the Board of Directors on May 28, 2021.

Lieutenant General (Retired) John E.

served over 34 years in the US Army.

Commissioned as an Infantry Officer, he served in line units, staff positions and Army Schools.

He had multiple assignments at the US Army Command and General Staff College where he taught Tactics and Wargaming Instructor and served

as the Deputy Commandant and later Commandant.

Miller has served as the owner/consultant at Miller Analytics, LLC since September

Miller previously served as a member of the board of directors of Drone Aviation Holding Corp.

from December 2017 to November 2019.

He holds a Bachelor’s degree in Mathematics from Missouri State University and a Master’s degree in Operations Research from

Georgia Tech.

He is also a graduate of the Army Command and General Staff College and the Army War College.

Miller also attended Executive

Development programs at Yale University, the Menninger Foundation and Leadership at the Peak, Denver, CO.

Miller was chosen to serve

as a director of the Company based on his leadership, his knowledge of and relationships in aerospace industries, and his familiarity

with the military and governmental agencies.

Barreto, Director, 64, was appointed to the Board of Directors effective January 20, 2022.

is President and CEO of the Barreto Group and of Barreto Hospitality since their founding.

The Barreto Group, which was founded in 1988,

is a diversified company specializing in corporate and public affairs consulting, real estate investment, and development.

Barreto Hospitality,

which was founded in 2020, is the food, beverage, and hospitality arm of the Company boasting a wide array of dining and entertainment

venues across South Florida.

Barreto is also the founding partner of Floridian Partners, LLC.

Floridian Partners LLC, which was founded

in 2000, is a consulting firm that develops and manages effective corporate and public affairs strategies designed to achieve specific

business results.

Barreto has also served as the CEO of Barreto Capital, LLC, a private money lender, since November 2018.

has chaired the Super Bowl Host Committee a record three (3) times, in the years 2007, 2010 and 2020.

Barreto was appointed

to serve as a director of the Company based on his significant leadership and entrepreneurial experience.

director is related to any other director or executive officer of our Company or our subsidiaries, and, there are no arrangements

or understandings between a director and any other person pursuant to which such person was elected as director.

in Certain Legal Proceedings

the past ten years, none of our officers, directors, promoters or control persons have been involved in any legal proceedings as described

in Item 401(f) of Regulation S-K.

Committee of the Board of Directors

members of the Audit Committee are Kendall Carpenter, Louis Cusimano and Hector Delgado.

Each member of the Audit Committee is independent

as defined by the Nasdaq Rules.

Kendall Carpenter is the Chairperson of the Audit Committee.

In addition, each member of the Audit Committee

satisfies the additional requirements of the SEC and Nasdaq Rules for audit committee membership, including the additional independence

requirements and the financial literacy requirements.

The Board has determined that at least one member of the Audit Committee, Ms.

is an “audit committee financial expert” as defined in the SEC’s rules and regulations.

The primary purpose of the

Audit Committee is to oversee the quality and integrity of our accounting and financial reporting processes and the audit of our financial

The Audit Committee is responsible for selecting, compensating, overseeing and terminating the selection of our independent

registered public accounting firm.

of Business Conduct and Ethics

Board has adopted a Code of Business Conduct and Ethics that is applicable to the Company and to all our directors and officers and persons

performing similar functions, including our principal executive officer and principal financial officer.

A copy of the Company’s

Code of Ethics may be obtained on our website at www.NextPlat.com .

We intend to disclose future amendments to such code, or any

waivers of its requirements, applicable to any principal executive officer, principal financial officer, principal accounting officer

or controller, or persons performing similar functions or our directors on our website identified above.

The inclusion of our website

address in this Annual Report on Form 10-K does not include or incorporate by reference the information on our website into this Annual

Report on Form 10-K.

Section 16(a) Reports

solely upon a review of reports on Forms 3, 4 and 5 and any amendments thereto furnished to the Company pursuant to Section 16 of the

Exchange Act, and written representations from the Section 16 officers and directors that no other reports were required, the Company

reports that we believe all Forms 3, 4 and 5 showing ownership of and changes of ownership in our capital stock or similar reportable

transactions which took place during the 2021 fiscal year were timely filed with the SEC, other than the inadvertent late filing of one

Form 3 for Mr.

Cohen of reporting 2 transactions, one Form 3 for Mr.

Ellenoff reporting 9 transactions, one Form 3 for Mr.

Thomson reporting

2 transactions, one Form 3 for Sarwar Uddin, one Form 3 for Mr.

Cusimano, one Form 3 for Mr.

Fernandez reporting 3 transactions, one

Form 3 for Ms.

Carpenter, one Form 3 for Mr.

Miller, one Form 4 for Mr.

Phipps reporting one transaction, one Form 4 for Mr.

reporting one transaction, and one Form 3 for Mr.

Seifert reporting three transactions.

believe it is important that our Board of Directors is composed of individuals reflecting the diversity represented by our employees,

our customers, and our communities.

We provide below disclosure regarding the diversity of our Board of Directors as required by the

listing standards of the NASDAQ Capital Market.

Diversity Matrix (as of March 28, 2022)

Number of Directors

Not Disclose Gender

Gender Identity

Demographic Background

American or Black

Native or Native American

Hawaiian or Pacific Islander

or More Races or Ethnicities

Not Disclose Demographic Background

director is related to any other director or executive officer of our Company or our subsidiaries, and there are no arrangements or understandings

between a director and any other person pursuant to which such person was elected as director.

Executive Compensation

Summary Compensation Table

table below summarizes all compensation awarded to, earned by, or paid to our named executive officers (as defined in Item 402(m)(2)

of Regulation S-K) for the fiscal years ended December 31, 2021 and December 31, 2020.

Name and Principal Position

Stock Awards ($) (2)

Option Awards ($) (2)

Non-Equity Incentive Plan Compensation ($)

Nonqualified Deferred Compensation Earnings ($)

Other Compensation ($) (3)

Fernandez Chief Executive

Officer and Chairman (3)(4)

David Phipps President of NextPlat and Chief Executive Officer of Global Operations.

Former* Chief Executive

Officer and Chairman of NextPlat (3)(5)

Douglas Ellenoff Vice Chairman and Chief Business Development

Strategist (6)

information regarding the Company’s current executive officers is provided above in the section entitled “ Information

About Directors and Executive Officers .”

October 7, 2021, on the approval and recommendation of the Compensation Committee, the Board approved a plan to make bonus payments

of $3,000 per month (each, a “Monthly Bonus”) to each of Mr.

Fernandez and Mr.

The Monthly Bonus payments were

approved in recognition of Messrs.

Fernandez’s and Phipps’ contributions to the Company.

The Monthly Bonus payments will

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

Fernandez and Phipps.

shown in the “Stock Awards” and “Option Awards” column reflect the aggregate grant date fair value calculated

in accordance with FASB ASC 718 for the respective fiscal year with respect to stock options granted to our named executive officers.

Amounts reflect our accounting for these option grants and do not necessarily correspond to the actual values that may be realized

by our named executive officers.

The grant date fair values of these option grants were calculated at the grant date using the Black-Scholes

option pricing model.

The assumptions used for the valuations are set forth in Note 13 – Stockholders’ Equity

in the Notes included in the Annual Report.

Pursuant to SEC rules, we disregarded the estimates of forfeitures related to service-based

vesting conditions.

See the “Outstanding Equity Awards at Fiscal Year-End” table in this proxy statement and related

notes for information with respect to stock options granted prior to fiscal 2020.

and values of compensation reported in “All Other Compensation” are set forth in the following table:

Health Insurance Coverage ($)

Automobile Allowance ($)

Board of Director Compensation ($)

Douglas Ellenoff

Fernandez has served as the Company’s Executive Chairman since May 28, 2021 and its Chief Executive Officer since June 5, 2021.

Phipps served as the President of the Company since February 19, 2015 and as a member of the Board since February 24, 2015, and

Chairman of the Board from February 24, 2015 until May 23, 2021 and Chief Executive Officer of the Company from February 25, 2015

to June 5, 2021.

Fernandez received the following equity awards on December 16, 2021:

of 101,000 shares of restricted common stock of the Company under the 2020 Plan.

All shares fully vested and issued on the Effective

of 275,000 shares of restricted common stock of the Company under the 2021 Plan.

Half of the shares fully vested and issued on the

Effective Grant Date.

The second half of the shares are to be issued and to vest on the first anniversary of the Effective Grant

of an option under the 2021 Plan to buy 75,000 shares of Company common stock at an exercise price of $3.81 per share.

vests one half on grant date and one half on the one-year anniversary of grant date.

The option has a term of 10 years.

Phipps received the following equity awards on December 16, 2021:

of 275,000 shares of restricted common stock of the Company under the 2021 Plan.

All shares fully vested and issued on the Effective

Ellenoff received the following equity awards pursuant to his Employment Agreement, dated August 24, 2021, by and

between the Company and Mr.

Ellenoff (the “Ellenoff Employment Agreement”),

the terms of the Ellenoff Employment Agreement, Mr.

Ellenoff was awarded, in lieu of cash compensation:

(i) a restricted stock award

of 100,000 shares of Common Stock of the Company, 40,000 of which were issued on September 9, 2021, and vested immediately, with

an additional 20,000 shares of restricted stock to be issued and to vest on each of August 24, 2022, August 24, 2023 and August 24,

2024, provided Mr.

Ellenoff continues to serve on the Board of Directors at any time during the year in which the restricted stock

is to vest, (ii) options to purchase a total of 1,500,000 shares of the Company’s Common Stock, 300,000 of which were vested

immediately, 150,000 of which will vest on each of the next three annual anniversaries of the commencement of his employment, and

the remaining 750,000 of which will vest at the rate of 250,000 per year on each of the first three anniversaries of the commencement

of his employment if during each such year Mr.

Ellenoff introduces the Company to twelve (12) or more potential Business Transactions

(as defined in the Ellenoff Agreement and which transactions need not be consummated);

provided that the Company’s Chief Executive

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

Such options will have an exercise price of

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

These equity awards to Mr.

Ellenoff were material to induce Mr.

to enter into the Ellenoff Agreement and were issued outside of a shareholder approved stock or option plan pursuant to the Nasdaq

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

to Summary Compensation Table

Phipps compensation are set forth in his Employment Agreement, dated June 5, 2021, which was effective June 2, 2021 (as

amended, the “2021 Phipps Agreement”), which sets Mr.

Phipps’ annual base compensation at $350,000.

The terms of Mr.

Fernandez’s compensation are set forth in his Employment Agreement, dated June 2, 2021 (as amended, the “June Agreement”),

which sets Mr.

Fernandez’s annual base compensation at $350,000.

The terms of Mr.

Ellenoff’s compensation are set forth in

the Ellenoff Employment Agreement which provides for equity compensation in lieu of a base cash compensation arrangement.

The 2021 Phipps

Employment Agreement, the June Agreement and the Ellenoff Employment Agreement are described below under the section titled “ Employment

Agreements ”.

the years ended December 31, 2021 and 2020, the Company recorded stock-based compensation of $3,758,424 and $904,900, respectively.

Employment Agreements

June 14, 2018, the Company entered into a two-year Employment Agreement (“2018 Phipps Agreement”) with Mr.

Phipps, with an

automatic one-year extension.

Under the terms of the 2018 Phipps Agreement, Mr.

Phipps served as the Company’s Chief Executive

Officer and President and received an annual base salary equal to the sum of $170,000 and £48,000 paid through our operating subsidiary,

For the years ended December 31, 2019 and 2018, the £48,000 equivalent to USD is $61,293 and $62,219 and the yearly conversion

rate is 1.276933 and 1.296229, respectively.

The 2018 Phipps Agreement provided for a performance bonus based on exceeding our annual

revenue goals and on our ability to attract new investment.

The Agreement also provided for medical plan coverage, an auto allowance,

paid vacation, and discretionary stock grants and option awards.

In the event of termination without cause, termination as a result of

a change in control, or resignation with good reason (as defined in the 2018 Phipps Agreement), Mr.

Phipps was entitled to a severance

equal to twice his base salary, the immediate vesting of all unvested options, and other benefits.

As described below, the 2018 Phipps

Agreement terminated in accordance with its terms on June 14, 2020, and Mr.

Phipps and the Company subsequently entered into a new employment

March 13, 2020, the Company and David Phipps executed a waiver of the provisions in his employment agreement requiring prior written

notice of non-renewal to the other party.

As a result, his employment terms with the Company were not automatically extended as set forth

in his employment agreement and the agreement terminated as of June 14, 2020.

After a series of monthly extensions Mr.

employment agreement was replaced with a new employment agreement on March 11, 2021.

As described in more detail below, on June 5,

2021, the Company entered into a new three year employment agreement with Mr.

Phipps (the “2021 Phipps Employment Agreement”)

that was effective as of June 2, 2021 and that replaced his existing employment agreement.

The 2021 Phipps Employment Agreement set Mr.

Phipps’ annual base compensation at $350,000.

On June 5, 2021, the Company

to enter into a new three-year employment agreement with Mr.

Phipps, the that was effective as of June 2, 2021, also referred to herein

as the 2021 Phipps Employment Agreement).

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

Phipps will serve as the serve

as President of the Company and Chief Executive Officer of Global Operations.

The term will be automatically extended for additional

one-year terms thereafter unless terminated by the Company or Mr.

Phipps by written notice.

Phipps’ annual base compensation

under the 2021 Phipps Employment Agreement is an aggregate of $350,000.The Company may increase (but not decrease) his compensation

during its term.

In addition, Mr.

Phipps will be entitled to receive an annual cash bonus if the Company meets or exceeds criteria adopted

by the Compensation Committee of the Board of Directors.

Phipps is also entitled to participate in any other executive compensation

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

as the Compensation Committee of the Company may from time to time determine (the “Share Awards”).

Share Awards will be subject

to the applicable Plan terms and conditions, provided, however, that Share Awards will be subject to any additional terms and conditions

as are provided therein or in any award certificate(s), which shall supersede any conflicting provisions governing Share Awards provided

under the equity incentive plan.

The Company is required to pay or to reimburse Mr.

Phipps for all reasonable out-of-pocket expenses

actually incurred or paid by Mr.

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

be entitled to participate in such pension, profit sharing, group insurance, hospitalization, and group health and benefit plans and

all other benefits and plans, including perquisites, if any, as the Company provides to its senior employees.

The 2021 Phipps Agreement

may be terminated based on death or disability of Mr.

Phipps, for cause or without good reason, for cause or with good reason, and as

a result of the change of control of the Company.

The 2021 Phipps Agreement also contains certain provisions that are customary for agreements

of this nature, including, without limitation, non-competition and non-solicitation covenants, indemnification provisions, etc.

7, 2021, the 2021 Phipps Agreement was amended in order to, among other things, (i) increase Mr.

Phipps’ compensation to include

a car allowance of $1,000 a month and (ii) clarify Mr.

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

of Global Operations.

Employment Agreements

May Employment Agreement

On May 23, 2021, the Company

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

Fernandez to serve as Chairman of the Board.

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

Under the terms of May Agreement, Mr.

Fernandez’s employment

commenced on May 28, 2021.

As compensation for services under the May Agreement, Mr.

Fernandez was to receive, in monthly installments

during the term, the sum of $12,000 per month.

Fernandez was also be entitled to such cash bonus opportunity and equity compensation

arrangements as the Compensation Committee may determine following the effectiveness of this registration statement.

The May Agreement

also provided for the Company to reimburse Mr.

Fernandez for any and all premium payments made by him to obtain and continue in full

force and effect throughout the entire period of employment for personal catastrophe and disability insurance coverages.

Such insurance

was to have premium limits not to exceed one hundred percent (100%) of Mr.

Fernandez’s Base Salary per annum.

In addition, Mr.

Fernandez was entitled to participate in such pension, profit sharing, group insurance, hospitalization, and group health and benefit

plans and all other benefits and plans, including perquisites, if any, as the Company provides to its senior executives.

Under the May

Agreement, the Company was also obligated to reimburse Mr.

Fernandez for up to $10,000 per year related to Mr.

Fernandez’s business

and personal travel and/or that of his immediate family members, as well as up to $10,000 per year for professional fees incurred by

Fernandez, whether in connection with Mr.

Fernandez’s association with the Company or otherwise.

In connection to the June

Offering, which is described above, the Company granted Mr.

Fernandez an award of restricted stock with a grant date fair value equal

to $3,000,000 determined at the per unit offering price of $5.00 per unit (the “RSA”), which RSA will vest 1/3 at each of

the three anniversaries of the grant date.

Notwithstanding the vesting schedule, full vesting will occur upon a Change in Control, as

that term is defined in the RSA.

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

the securities granted to Employee pursuant to the RSA.

June Employment Agreement

June 2, 2021, the Company entered into a new employment agreement (the “June Agreement”) with Charles M.

Fernandez, with

an initial term of five (5) years effective on May 28, 2021.

The June Agreement replaced “the May Agreement”.

Under the June Agreement, Mr.

Fernandez will serve as the Chairman and Chief Executive Officer of the Company.

The June Agreement

will be automatically extended for additional one-year terms unless terminated by the Company or Mr.

Fernandez by written notice.

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

The Company may increase (but not

decrease) his compensation during the June Agreement’s term.

In addition, Mr.

Fernandez is entitled to receive an annual cash

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

Fernandez is also entitled to

participate in any other executive compensation plans adopted by the Board and is eligible for such grants of Share Awards.

Awards will be subject to the applicable Plan terms and conditions, provided, however, that Share Awards will be subject to any

additional terms and conditions as are provided therein or in any award certificate(s), which will supersede any conflicting

provisions governing Share Awards provided under the equity incentive plan.

The Company is required to pay or to reimburse Mr.

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

Fernandez in the course of his employment,

consistent with the Company’s policy.

Fernandez will also be entitled to participate in such pension, profit sharing, group insurance, hospitalization, and group health and

benefit plans and all other benefits and plans, including perquisites, if any, as the Company provides to its senior employees.

Agreement may be terminated based on death or disability of Mr.

Fernandez, for cause or without good reason, for cause or with good reason,

as a result of the change of control of the Company and at the option of Mr.

Fernandez with or without cause.

The June Agreement also

contains certain provisions that are customary for agreements of this nature, including, without limitation, non-competition and non-solicitation

covenants, indemnification provisions, etc.

Company will also reimburse Mr.

Fernandez for any and all premium payments made by him to obtain and continue personal catastrophe and

disability insurance coverages for himself, which policy will have policy limits not to exceed one hundred percent (100%) of his base

salary per annum at any given time.

In addition, the Company will pay for any and all travel-related expenses incurred by Mr.

and/or his immediate family members, not to exceed $10,000.00 per fiscal year, regardless of whether or not such expenses are incurred

Fernandez in connection with services or duties to be performed by him as an employee of the Company.

The Company will also pay

for any and all fees and costs incurred by Mr.

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

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

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

Fernandez in connection with his employment with the Company.

addition, the June Agreement (which repeats, but not duplicates, a grant of restricted stock made under the May Agreement), Mr.

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

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

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

Notwithstanding the vesting schedule, full vesting

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

“May Restricted Stock Agreement”).

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

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

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

“Cause” (as that term is defined in the June Agreement), the RSA will vest and Mr.

Fernandez will receive all right, title

and interest in the balance of the securities granted to him in the RSA.

the term of the June Agreement and so long as Mr.

Fernandez is employed by the Company, he may nominate two directors to the Company’s

Board of Directors.

The appointment of these directors to the Board is subject to approval by the Board of Directors.

August 7, 2021, the June Agreement was amended in order to, among other things, increase Mr.

Fernandez’s compensation by (i) providing

for medical plan coverage for Mr.

Fernandez and his family at the expense of the Company, and (ii) providing for an auto allowance $1,000

Employment Agreement

August 24, 2021, Douglas S.

Ellenoff was appointed to the positions of Chief Business Development Strategist of the “Company” and Vice Chairman of the Board of Directors of the Company.

The appointment was made on the approval and recommendation of the Nominating

Committee of the Board.

Ellenoff was not appointed to any committees of the Board.

connection with Mr.

Ellenoff’s appointment to the position of Chief Business Development Strategist of the Company, Mr.

and the Company entered into a three year Employment Agreement, dated August 24, 2021, which is also referred to herein as the

“Ellenoff Agreement”., Under the Ellenoff Agreement, which sets forth the terms of his employment, including with

regard to compensation.

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

the terms of the Ellenoff Employment Agreement, Mr.

Ellenoff will receive, in lieu of cash compensation:

(i) a restricted stock

award of 100,000 shares of Common Stock of the Company, 40,000 of which will be issued within 5 business days of the execution of the

Ellenoff Employment Agreement and vest immediately, and the remaining 60,000 of which will be issued and vest at the rate of 20,000

shares at the end of each of the next three annual anniversaries of his employment, provided that Mr.

Ellenoff serves on the Board at

any time during such year;

and (ii) options to purchase a total of 1,500,000 shares of the Corporation’s Common Stock, 300,000

of which will issued within 5 business days of the execution of the Ellenoff Employment Agreement and vest immediately, 150,000

of which will vest on each of the next three annual anniversaries of the commencement of his employment, and the remaining 750,000 of

which will vest at the rate of 250,000 per year on each of the first three anniversaries of the commencement of his employment if during

each such year Mr.

Ellenoff introduces the Company to twelve (12) or more potential Business Transactions (as defined in the Ellenoff

Employment Agreement and which transactions need not be consummated);

provided that the Company’s Chief Executive Officer

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

Such options have an exercise price of $5.35 per share

and will terminate 5 years after they vest.

These equity awards to Mr.

Ellenoff were material to induce Mr.

Ellenoff to enter into the

Ellenoff Employment Agreement and were issued outside of a shareholder approved stock or option plan pursuant to the Nasdaq “inducement

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

incentive plans are described below under the heading “ Incentive Plans .”

Equity Awards at 2021 Fiscal Year-End

The table below sets forth certain information concerning

our outstanding equity awards for each named executive officer as of December 31, 2021.

The market values of the Common Stock reported

in this table are calculated based on the closing market price of the Common Stock on Nasdaq on December 31, 2021, which was $3.24

Equity Awards At Fiscal Year-End

of Securities Underlying Unexercised Options (#) Exercisable

of Securities Underlying Unexercised Options (#) Unexercisable

Incentive Plan Awards:

Number of Securities Underlying Unexercised Unearned Options (#)

Exercise Price

Expiration Date

of Shares or Shares of Stock That Have Not Vested (#)

Value of Shares or Shares of Stock That Have Not Vested ($)

Incentive Plan Awards:

Number of Unearned Shares, Shares or Other Rights That Have Not Vested (#)

Incentive Plan Awards:

Market or Payout Value of Unearned Shares, Shares or Other Rights That Have Not Vested ($)

Douglas Ellenoff

granted outside of the Company’s 2018, 2020 and 2021 Equity Awards Plan.

Incentive Plan

June 14, 2018, our Board of Directors approved the 2018 Incentive Plan (the “2018 Plan”).

The purpose of the 2018 Plan is

to provide a means for the Company to continue to attract, motivate and retain management, key employees, consultants and other independent

contractors, and to provide these individuals with greater incentive for their service to the Company by linking their interests in the

Company’s success with those of the Company and its shareholders.

An award may also be granted to any consultant, agent, advisor

or independent contractor for bona fide services rendered to the Company or any Related Company (as defined in the 2018 Plan) that;

not in connection with the offer and sale of the Company’s securities in a capital raising transaction, and do not directly or

indirectly promote or maintain a market for the Company’s securities.

The 2018 Plan is administered by the Board its Compensation

Committee and may grant Options designated as Incentive Stock Options or Nonqualified Stock Options.

The 2018 Plan provides that up to

a maximum of 13,333 shares of the Company’s common stock (subject to adjustment) are available for issuance under the 2018 Plan.

Subject to earlier termination in accordance with the terms of the 2018 Plan and the instrument evidencing the option, the maximum term

of an incentive stock option shall not exceed ten years, and in the case of an incentive stock option granted to a Ten Percent Stockholder

(as defined in the 2018 Plan), shall not exceed five years.

Any portion of an option that is not vested and exercisable on the date of

a plan participant’s Termination of Service (as defined in the 2018 Plan) shall expire on such date.

In the event of a Change in

Control (as defined in the 2018 Plan);

all outstanding awards, other than performance shares and performance units, shall become fully

and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, immediately

prior to the Change in Control and shall terminate at the effective time of the Change in Control;

provided, however, that with respect

to a Change in Control that is a Company Transaction (as defined in the 2018 Plan), such awards shall become fully and immediately exercisable,

and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, only if and to the extent such awards are

not converted, assumed or replaced by the Successor Company (as defined in the 2018 Plan.

and Restated 2020 Equity Incentive Plan

August 21, 2020, the Company’s Board of Directors approved and adopted the Company’s 2020 Equity Incentive Plan (the “2020

Plan”) in order to provide a means for the Company to continue to attract, motivate and retain management, key employees, directors

and consultants.

On December 31, 2020, the Company’s Board of Directors approved and adopted an amendment that increased the number

of shares available for issuance under the 2020 Plan from 450,000 shares to 800,000 shares of the Company’s common stock.

10, 2021, the Company’s Board of Directors further amended the 2020 Plan and adopted and approved an Amended and Restated 2020

Equity Incentive Plan (the “A&R 2020 Plan”), in order to, among other things:

(i) clarify that the exercise price of

stock options will be set at “Fair Market Value,” and (ii) make conforming revision to reflect the 1-for-5 reverse split

that was effective on May 28, 2021.

The A&R 2020 Plan was approved by the Company’s stockholders on December 16, 2021, at the

Company’s 2021 Annual Meeting of Stockholders.

A&R 2020 Plan provides for discretionary awards of, among others, stock options, stock awards, stock unit awards and stock appreciation

rights to participants.

Each award made under the A&R 2020 Plan will be evidenced by a written award agreement specifying the terms

and conditions of the award as determined by the Committee in its sole discretion, consistent with the terms of the A&R 2020 Plan.

All employees, directors, and consultants of the Company and its subsidiaries are eligible to receive awards under the A&R 2020 Plan.

A&R 2020 Plan is administered by the “Committee” which is defined in the A&R 2020 Plan as the Compensation Committee

of the Board or such other committee as may be designated by the Board from time to time to administer the Plan, or, if no such committee

has been designated at the time of any grants, it shall mean the Board.

number of shares of common stock that may be issued under the A&R 2020 Plan is 800,000.

Shares issuable under the A&R 2020 Plan

may be authorized but unissued shares or treasury shares.

If there is a lapse, forfeiture, expiration, termination or cancellation of

any award made under the A&R 2020 Plan for any reason, the shares subject to the award will again be available for issuance.

shares subject to an award that are delivered to us by a participant, or withheld by us on behalf of a participant, as payment for an

award or payment of withholding taxes due in connection with an award will not again be available for issuance, and all such shares will

count toward the number of shares issued under the A&R 2020 Plan.

The number of common shares issuable under the A&R 2020 Plan

is subject to adjustment, in the event of any reorganization, recapitalization, stock split, stock distribution, merger, consolidation,

split-up, spin-off, combination, subdivision, consolidation or exchange of shares, any change in the capital structure of the company

or any similar corporate transaction.

In each case, the Committee has the discretion to make adjustments it deems necessary to preserve

the intended benefits under the A&R 2020 Plan.

No award granted under the A&R 2020 Plan may be transferred, except by will, the

laws of descent and distribution.

maximum number of shares subject to Awards granted under the A&R 2020 Plan or otherwise during any one calendar year to any Director

for service on the Board (other than to Mr.

Phipps and the Company’s CEO and President, if serving on the Board, to whom no annual

limit is applicable), taken together with any cash fees paid by the Company to such Director during such calendar year for service on

the Board, will not exceed $100,000 in total value (calculating the value of any such Awards based on the grant date fair value or such

value as determined by the Board, at its discretion, of such Awards for financial reporting purposes).

Committee may amend any award agreement at any time, provided that no amendment may adversely affect the right of any participant under

any agreement in any material way without the written consent of the participant, unless such amendment is required by applicable law,

regulation or stock exchange rule.

The Board may terminate, suspend or amend the A&R 2020 Plan, in whole or in part, from time to

time, without the approval of the shareholders, unless such approval is required by applicable law, regulation or stock exchange rule,

and provided that no amendment may adversely affect the right of any participant under any outstanding award in any material way without

the written consent of the participant, unless such amendment is required by applicable law, regulation or rule of any stock exchange

on which the shares are listed.

Notwithstanding the foregoing, neither the A&R 2020 Plan nor any outstanding award agreement can

be amended in a way that results in the repricing of a stock option.

Repricing is broadly defined to include reducing the exercise price

of a stock option or cancelling a stock option in exchange for cash, other stock options with a lower exercise price or other stock awards.

No awards may be granted under the A&R 2020 Plan on or after the tenth anniversary of the effective date of the A&R 2020 Plan.

Incentive Award Plan

Company’s Board of Directors approved and adopted the 2021 Incentive Award Plan (“2021 Plan”), subject to stockholder

approval, on August 10, 2021.

The 2021 Plan was approved by the Company’s stockholders on December 16, 2021, at the Company’s

2021 Annual Meeting of Stockholders.

purpose of the 2021 Plan is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected

to make) important contributions to the Company and its subsidiaries by providing these individuals with equity ownership opportunities.

number of shares initially available for issuance under awards granted pursuant to the 2021 Plan is 768,819 shares of common stock.

number of shares initially available for issuance will be increased on January 1 of each calendar year beginning in 2022 and ending in

2031, by an amount equal to the lesser (A) an amount such that the resulting sum (the new “Overall Share Limit”) is equal

to 12% of the aggregate number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and

(B) such smaller number of shares of Common Stock as is determined by the Board.

Shares issued under the 2021 Plan may be authorized

but unissued shares, shares purchased in the open market or treasury shares.

If an award under the 2021 Plan expires, lapses or is terminated,

exchanged for cash, surrendered to an exchange program, repurchased, cancelled without having been fully exercised or forfeited, any

shares subject to such award will, as applicable, become or again be available for new grants under the 2021 Plan.

employees, directors, and consultants of the Company and its subsidiaries are eligible to receive awards under the 2021 Plan.

As of October

22, 2021, eighteen individuals are eligible to receive awards under the 2021 Plan.

2021 Plan is generally administered by the Board, which may delegate its duties and responsibilities to committees of Board and or officers

of the Company (referred to collectively as the “plan administrator”).

The plan administrator will have the authority to

make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the 2021

Plan, subject to its express terms and conditions.

The plan administrator will also set the terms and conditions of all awards under

the 2021 Plan, including any vesting and vesting acceleration conditions.

The plan administrator may also institute and determine the

terms and conditions of an “exchange program,” which could provide for the surrender or cancellation, transfer, or reduction

or increase of exercise price, of outstanding awards, subject to the limitations provided for in the Incentive Award Plan.

2021 Plan provides for the grant of stock options, including incentive stock options, or ISOs, and nonqualified stock options, or NSOs;

restricted stock;

dividend equivalents;

restricted stock units, or RSUs;

stock appreciation rights, or SARs;

and other stock or cash-based

All awards under the 2021 Plan will be set forth in award agreements, which will detail the terms and conditions of the awards,

including any applicable vesting and payment terms and post-termination exercise limitations.

Stock or Cash Based Awards may be granted to participants, including awards entitling participants to receive Shares to be delivered

in the future and including annual or other periodic or long-term cash bonus awards (whether based on specified performance criteria

or otherwise), in each case subject to any conditions and limitations in the 2021 Plan.

The plan administrator will determine the terms

and conditions of other stock or cash-based awards.

awards include any of the foregoing awards that are granted subject to vesting and/or payment based on the attainment of specified performance

goals or other criteria the plan administrator may determine, which may or may not be objectively determinable.

Performance criteria

upon which performance goals are established by the plan administrator.

connection with certain transactions and events affecting the Company’s Common Stock, including a change in control (as defined

in the 2021 Plan), or change in any applicable laws or accounting principles, the plan administrator has broad discretion to take action

under the 2021 Plan to prevent the dilution or enlargement of intended benefits, facilitate such transaction or event, or give effect

to such change in applicable laws or accounting principles.

This includes canceling awards in exchange for either an amount in cash or

other property with a value equal to the amount that would have been obtained upon exercise or settlement of the vested portion of such

award or realization of the participant’s rights under the vested portion of such award, accelerating the vesting of awards, providing

for the assumption or substitution of awards by a successor entity, adjusting the number and type of shares available, replacing awards

with other rights or property and/or terminating awards under the 2021 Plan.

Potential Payments Upon Termination or Change-in-Control

In the event of a termination

Fernandez’s or Mr.

Phipps’ (the “Subject Employees”) employment as a result of his death or Total

Disability (as defined in the respective employment agreement) the Subject Employee or his estate or beneficiaries, as applicable, will

be entitled to the following severance benefits:

(i) continued provision for a period of twelve (12) months following the Subject Employee’s

death or Total Disability of benefits under the Company’s benefit plans extended by the Company to its senior employees;

payment on a pro-rated basis of any bonus or other payments earned prior to the date of termination in connection with any bonus plan

to which the Subject Employee was a participant as of the date of death or Total Disability.

In the event of a termination

of a Subject Employee’s employment due to the expiration of the term of the respective employment agreement, and where the Company

offered to renew the term of employment and the Subject Employee chooses not to continue in the employ of the Company, the Subject Employee

will not be entitled to any severance benefits.

Upon termination of employment

by the Subject Employee for “good reason” (as defined in the respective employment agreement) or if the Company tenders a

non-renewal notice to the Subject Employee without “Cause” (as defined in the respective employment agreement), then the

Subject Employee will be entitled to the following severance benefits:

(i) a cash payment, based on the current scale of the Subject

Employee’s base salary, equal to six months of base salary;

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

date of termination of the benefits under the Company’s benefit plans extended by the Company to its senior employees;

(iii) payment

on a pro-rated basis of any bonus or other payments earned in connection with any bonus plan to which the Subject Employee was a participant

as of the date of the Subject Employee’s termination of employment;

and (iv) any options or restricted stock will be immediately

vested upon termination of Subject Employee’s employment.

Upon termination of the Subject

Employee’s employment at the Subject Employee’s option (without good reason) or by the Company for “Cause,” then

the Subject Employee will be entitled to the following benefits:

(i) continued provision, for a period of one (1) month after the date

of the Subject Employee’s termination of employment, of benefits under the Company’s benefit plans extended to the Employee

at the time of termination and (ii) any conversion rights available under the Company’s benefit plans and as otherwise provided

by law, including the Comprehensive Omnibus Budget Reconciliation Act.

In addition, notwithstanding

the vesting schedule set forth in May Restricted Stock Agreement, full vesting of Mr.

Fernandez’s RSA will occur upon a Change

in Control, as that term is defined in the May Restricted Stock Agreement pursuant to which the RSA was made.

employment is terminated for any reason at any time by the Company prior to the full vesting of the RSA without “Cause” (as

that term is defined in the June Agreement), the RSA will vest and Mr.

Fernandez will receive all right, title and interest in the balance

of the securities granted to him in the RSA.

In the event of a termination

Ellenoff’s employment as a result of his death, his Total Disability (as defined in the Ellenoff Employment Agreement),

the expiration of the initial term of the Ellenoff Employment Agreement, Mr.

Ellenoff’s resignation for any reason or no reason

(upon thirty (30) days prior written notice), or for “Cause” (as defined in the Ellenoff Employment Agreement);

addition to the reimbursement of documented, unreimbursed expenses incurred prior to such date, Mr.

Ellenoff or his estate or beneficiaries,

as applicable, will be entitled to receive any RSAs and options earned and/or vested through the such date, but all other RSAs and options

shall immediately terminate.

Upon termination of Mr.

Ellenoff’s employment (as defined in the Ellenoff Employment Agreement), in

addition to the reimbursement of documented, unreimbursed expenses incurred prior to such date, Mr.

Ellenoff will be entitled to receive

any RSAs and options provided for under the Ellenoff Employment Agreement;

any RSAs and Options that previously had not been vested will

immediately vest, and any RSAs or Options contemplated by the Ellenoff Employment Agreement that had not yet been issued to Mr.

will be promptly issued by the Company.

table below summarizes all compensation of our directors for our last completed fiscal year.

Only non-employee Directors received compensation

for service on the Board of Directors.

Earned or Paid in Cash ($)

Awards ($) (2)

Incentive Plan Compensation ($)

Non-Qualified

Deferred Compensation Earnings ($)

Other Compensation ($)

Carpenter (4)

paid to Charles M.

Fernandez, David Phipps and Douglas S.

Ellenoff, is set in Summary Compensation Table.

shown in the “Stock Awards” and “Option Awards” column reflect the aggregate grant date fair value calculated

in accordance with FASB ASC 718 for the respective fiscal year with respect to stock options granted to our named executive officers.

addition to the stock award noted in the table above, at December 31, 2021, Mr.

Delgado held (i) 11,046 fully vested options, exercisable

into common shares, and (ii) 10,000 unvested restricted stock award, which will vest on the one year anniversary of its issuance,

December 16, 2022.

addition to the restricted stock award noted in the table above, at December 31, 2021, the director has a 10,000 unvested restricted

stock award, which will vest on the one year anniversary of its issuance, December 16, 2022.

Director Compensation

November 18, 2021, our Board, on the recommendation of the Compensation Committee, approved the director compensation packages for the

2022 fiscal year.

The 2022 director compensation packages consists of a cash retainer of $48,000 for each non-employee Director, plus

an equity award of 20,000 shares of restricted stock to each non-employee Director (“2022 Equity Awards”).

Half of each 2022

Equity Award will be issued and vest on day of grant and the remaining half of the 2022 Equity Awards will be issued and vest on the

first anniversary of the grant date.

information required by this Item will be included in the 2023 Proxy Statement and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following tables sets forth,

as of March 28, 2022, the number of and percent of the Company’s common stock beneficially owned by:

(1) each of our directors;

(2) each of our named executive officers;

(3) our directors and executive officers as a group, without naming them;

persons or groups known by us to own beneficially 5% or more of our voting securities.

person is deemed to be the beneficial owner of securities that can be acquired by him within 60 days from March 28, 2022, upon the exercise

of options, warrants or other convertible securities.

Each beneficial owner’s percentage ownership is determined by assuming that

convertible securities that are held by that beneficial owner, but not those held by any other person, and which are exercisable within

60 days of March 28, 2022, have been exercised and converted.

and Address of Beneficial Owner (2)

and Executive Officers

2,186,953 (3)

and Executive Officers as a Group (11 persons)

3,877,738 (10)

Stockholders :

P B Capital B.V.

Stockholders as a Group (2 persons)

* Indicates beneficial ownership of less than

1% of the outstanding common stock.

‡ Named Executive

person is deemed to be the beneficial owner of securities that can be acquired by him within 60 days from March 28, 2022, upon the

exercise of options, warrants or other convertible securities.

Percentage is based on 9,293,096 shares of common stock outstanding

as of March 28, 2022.

otherwise indicated in the footnotes, the address of the beneficial owners is c/o NextPlat Corp, 3250 Mary St., Suite 410, Coconut

Grove, FL 33133.

(i) 1,549,453 shares of common stock, and (ii) 37,500 shares of common stock issuable upon exercise of options and (iii) 600,000

shares of common stock issuable upon the exercise of warrants.

Does not include (i) a 600,000 share stock award granted on May 28,

2021, that vest in three equal tranches on the first, second and third-year anniversaries of the grant and which are held indirectly

through eApeiron Partners, LLC, of which Mr.

Fernandez is owner and manager, (ii) 137,500 shares stock award granted

on December 16, 2021, that vests in on the first year anniversary of the grant and (iii) 37,500 shares of common stock issuable upon

exercise of options, granted on December 16, 2021, that vests on the first-year anniversary of the grant.

(i) 393,288 shares of common stock, and (ii) 301,333 shares of common stock issuable upon exercise of options.

Represents (i) 65,000 shares of common stock held directly

by Douglas Ellenoff and 46,297 shared held indirectly through Sabrina Allan and (ii) options to purchase 300,000 shares of common

stock that are currently exercisable.

Douglas Ellenoff may be deemed to share voting and investment power over the shares held Sabrina

Does not include a (i) 60,000 shares of a restricted stock award granted on August 24, 2021, that vests in three equal tranches

on the first, second and third year anniversaries of the grant, (ii) 1,200,000 shares of common stock issuable upon exercise of options,

granted on August 24, 2021, pursuant to the Ellenoff Employment Agreement (described above), that vests in six tranches on the first,

second and third year anniversaries of the grant date, subject to satisfaction of certain conditions.

(i) 14,360 shares of common stock, and (ii) 11,046 shares of common stock issuable upon exercise of options.

Does not include

a 10,000 share stock award, granted on December 16, 2021, that vests on the first year anniversary of the grant.

(i) 25,433 shares of common stock.

Does not include a 10,000 share stock award, granted on December 16, 2021, that vests on the first

year anniversary of the grant.

(i) 10,000 shares of common stock.

Does not include a 10,000 share stock award, granted on December 16, 2021, that vests on the first

year anniversary of the grant.

Represents (i) 380,371 shares of common stock.

Does not include a 10,000 share stock award, granted on January 20, 2022, that vests on the first year anniversary of the grant.

addition to the Named Executive Officers, the Executive Officers as a Group includes:

Thomson, the Company’s Executive Vice President and Chief Financial Officer, and

beneficial owner of 65,433 shares;

Theresa Carlise, the Company’s Chief Accounting

Officer, Treasurer and Secretary, and beneficial owner of 32,864 shares;

and Andrew S.

the Company’s Senior Vice President of Operations, and beneficial owner of 35,000 shares.

(i) 450,000 shares of common stock, (ii) warrants to purchase 314,362 shares of common stock that are currently exercisable and 679,013

shares of common stock in the name of P B Capital B.V., of which Mr.

Palmer is a director and authorized signatory.

address of the beneficial owner is Vossiusstraat 44-M, Amsterdam, Netherlands 1071 AJ.

address of the beneficial owner is P B Capital B.V., PB Capital, Herengracht 458, 1017CA

Amsterdam, Netherlands.

Authorized for Issuance under Equity Compensation Plans

Compensation Plan Information

of December 31, 2021, we had issued and outstanding options to purchase 929,892 shares of common stock.

The weighted average exercise

price of the options was $3.53.

Options totalling 353,808 were issued outside of equity compensation plans.

weighted average exercise price of the options was $6.83.

The following table summarizes

information, as of December 31, 2021, relating to equity compensation plans of the Company under which the Company’s common stock

is authorized for issuance.

of securities to be issued upon exercise of outstanding options, warrants and rights

average exercise price of outstanding options, warrants and rights

of securities remaining available for future issuance under equity compensation plans

compensation plans approved by security holders:

Equity compensation plans

Incentive Plan

Equity compensation plans

2021 Incentive Plan

compensation plans not approved by security holders:

Incentive Plan

compensation issued pursuant to individual compensation arrangements

3,443,808 (4)

This amount includes 1,000 shares to be issued upon vesting of outstanding restricted stock

Rights to receive restricted stock have been excluded from the computation of the weighted-average

exercise price since these awards have no exercise price.

This amount includes 177,500 shares

to be issued upon vesting of outstanding restricted stock awards.

This amount includes 3,090,000 shares

to be issued upon vesting of outstanding restricted stock awards.

equity compensation made outside of a shareholder approved stock or option plan pursuant to the Nasdaq “inducement grant”

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

information required by this Item will be included in the 2023 Proxy Statement and is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence.

rules require us to disclose any transaction or currently proposed transaction in which the Company is a participant and in which any

related person has or will have a direct or indirect material interest involving the lesser of $120,000 or one percent (1%) of the average

of the Company’s total assets as of the end of last two completed fiscal years.

A related person is any executive officer, director,

nominee for director, or holder of 5% or more of the Company’s common stock, or an immediate family member of any of those persons.

the years ended December 31, 2021 and 2020, Orbital Satcom purchased an aggregate of approximately $1,583,682 and $1,245,308 of inventory

For the years ended December 31, 2021 and 2020, GTC purchased an aggregate of approximately $62,380 and $25,728 of inventory

from Orbital Satcom.

For the year ended December 31, 2021, NextPlat advanced $2,100,000, pursuant to approval from the Company’s

board of directors for inventory.

and Procedures for Related Party Transactions

to establishing the Audit Committee in March 2021, the Board at large was responsible for reviewing and approving in advance any related

party transaction.

Upon establishing the Audit Committee in March 2021, the Audit Committee was responsible for reviewing, approving

and overseeing any transaction between the Company and a related person.

The Audit Committee’s responsibility includes, but is

not limited to, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in

which we were or will be a participant and (a) the amount involved exceeds the lesser of $120,000 or one percent (1%) of the average

of the Company’s total assets as of the end of last two completed fiscal years, and (b) a related person had or will have a direct

or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities

in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person.

rules of the Nasdaq Stock Market, or the Nasdaq Rules, require a majority of a listed company’s Board of Directors to be composed

of independent directors.

In addition, the Nasdaq Rules require that, subject to specified exceptions, each member of a listed company’s

audit, compensation and nominating and governance committees be independent.

Under the Nasdaq Rules, a director will only qualify as

an independent director if, in the opinion of our Board, that person does not have a relationship that would interfere with the exercise

of independent judgment in carrying out the responsibilities of a director.

The Nasdaq Rules also require that audit committee members

satisfy independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than

in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or

indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an

affiliated person of the listed company or any of its subsidiaries.

In considering the independence of compensation committee members,

the Nasdaq Rules require that our board of directors must consider additional factors relevant to the duties of a compensation committee

member, including the source of any compensation we pay to the director and any affiliations with our company.

Board undertook a review of the composition of our Board and its committees and the independence of each director.

Based upon information

requested from and provided by each director concerning his background, employment and affiliations, including family relationships,

our Board has determined that Hector Delgado, John Miller, Kendall Carpenter, Louis Cusimano and Rodney Barreto are independent, as defined

under the Nasdaq Rules, and that David Phipps, Douglas Ellenoff and Charles M.

Fernandez are not independent.

Principal Accounting Fees and Services

the fiscal years ending December 31, 2021, and 2020, RBSM LLP was the Company’s independent registered public accounting firm.

following table sets forth fees billed to us by our independent registered public accounting firm during the fiscal years ended December

31, 2021, and 2020.

Audit Fees (1)

Audit-related Fees

All Other Fees (2)

fees consisted primarily of fees for the audit of our annual financial statements and reviews of the financial statements included

in our quarterly reports and current reports.

other fees reflect fees for review of the Company’s registration statement on Form S-1 and amendments thereto.

Committee Pre-approval Policies and Procedures

Audit Committee on an annual basis reviews audit and non-audit services performed by the independent auditors.

All audit and non-audit

services are pre-approved by the Audit Committee, which considers, among other things, the possible effect of the performance of such

services on the auditors’ independence.

information required by this Item will be included in the 2023 Proxy Statement and is incorporated herein by reference.

Principal Accountant Fees and Services.

information required by this Item will be included in the 2023 Proxy Statement and is incorporated herein by reference.

Exhibits, Financial Statement Schedules.

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Statements Schedules.

Placement Agency Agreement dated December 9, 2022, by and between the Company and Dawson James Securities, Inc.

(incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 13, 2022).

Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014).

3 unchanged sentences

Certificate of Amendment of the Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 20, 2022).

and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC

on January 20, 2022).

of NextPlat Corp’s Securities Registered Under Section 12 of the Exchange Act.

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on January 20, 2022).

Description of NextPlat Corp’s Securities Registered Under Section 12 of the Exchange Act.

(Incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2022).

Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1/A filed with the SEC on April 7, 2021).

1 unchanged sentence

Form of Underwriter’s Warrant (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1/A filed with the SEC on April 7, 2021).

Form of Warrant Agreement issued in offering (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 13, 2022)

Form of Placement Agent Warrant Agreement issued in offering (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Commission on December 13, 2022)

Form 7% Convertible Promissory Note (Incorporated by reference from the Current Report on Form 8-K filed with the SEC on March 11, 2021).

26 unchanged sentences

Fernandez Employment Agreement, dated May 23, 2021 (incorporated by reference to Exhibit 10.20 to Amendment No.4 to the Company’s Registration Statement on Form S-1 filed with the SEC on May 25, 2021, File No.

Employment Agreement, dated June 2, 2021 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report filed

with the SEC on August 17, 2021).

Fernandez Employment Agreement, dated June 2, 2021 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report filed with the SEC on August 17, 2021).

Form of Director Offer Letter (incorporated by reference to Exhibit 10.17 to the Company’s Registration Statement on Form S-1/A filed with the SEC on April 7, 2021).

25 unchanged sentences

Stock Option Agreement, dated August 24, 2021, by and between Orbsat Corp and Douglas Ellenoff (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report filed with the SEC on November 15, 2021).

Restricted Stock Award Agreement, dated August 24, 2021, by and between Orbsat Corp and Douglas Ellenoff (incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report filed with the SEC on November 15, 2021).

Stock Option Agreement, dated August 24, 2021, by and between Orbsat Corp and Paul R.

Thomson (incorporated by reference to Exhibit 10.12 to the Company’s Quarterly Report filed with the SEC on November 15, 2021).

Restricted Stock Award Agreement, dated August 24, 2021, by and between Orbsat Corp and Paul R.

Thomson (incorporated by reference to Exhibit 10.13 to the Company’s Quarterly Report filed with the SEC on November 15, 2021).

Amended and Restated 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on October 1, 2021).

Amendment No.

Stock Award Agreement, dated August 24, 2021, by and between Orbsat Corp and Douglas Ellenoff (incorporated by reference to Exhibit

10.11 to the Company’s Quarterly Report filed with the SEC on November 15, 2021).

Option Agreement, dated August 24, 2021, by and between Orbsat Corp and Paul R.

Thomson (incorporated by reference to Exhibit 10.12

to the Company’s Quarterly Report filed with the SEC on November 15, 2021).

Stock Award Agreement, dated August 24, 2021, by and between Orbsat Corp and Paul R.

Thomson (incorporated by reference to Exhibit

10.13 to the Company’s Quarterly Report filed with the SEC on November 15, 2021).

and Restated 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form

8-K filed with the SEC on October 1, 2021).

1 Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Paul R.

Thomson (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Restricted Stock Award Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen.

Stock Option Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen.

Amendment No.

2 Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Theresa Carlise (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Director Services Agreement, dated January 11, 2022, between Orbsat Corp and Rodney Barreto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 11, 2022).

Form of Securities Purchase Agreement dated as of December 31, 2021, by and among Orbsat Corp and the Investors (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 5, 2022).

Thomson (incorporated by reference to Exhibit

10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen (incorporated by reference to Exhibit 10.2 to the Company’s

Current Report on Form 8-K filed with the SEC on October 8, 2021).

Restricted Stock Award Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen (incorporated by reference to Exhibit 10.50 to the Company’s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Stock Option Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen (incorporated by reference to Exhibit 10.51 to the Company’s Current Report on Form 10-K filed with the SEC on March 31, 2022).

2 Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Theresa Carlise (incorporated by reference to Exhibit

10.3 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Services Agreement, dated January 11, 2022, between Orbsat Corp and Rodney Barreto (incorporated by reference to Exhibit 10.1 to

the Company’s Current Report on Form 8-K filed with the SEC on January 11, 2022).

of Securities Purchase Agreement dated as of December 31, 2021, by and among Orbsat Corp and the Investors (incorporated by reference

to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 5, 2022).

of Registration Rights Agreement dated as of December 31, 2021, by and among Orbsat Corp and the Investors (incorporated by reference

to Exhibit A of Exhibit 10.54 to this Annual Report on Form 10-K).

Orbsat Corp Amended and Restated 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 22, 2021).

Orbsat Corp 2021 Incentive Award Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 22, 2021).

Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen.

(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Amendment No.

Corp Amended and Restated 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report

on Form 8-K filed with the SEC on December 22, 2021).

Corp 2021 Incentive Award Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed

with the SEC on December 22, 2021).

Agreement, dated October 8, 2021, by and between Orbsat Corp and Andrew Cohen.

(incorporated by reference to Exhibit 10.2 to the

Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021).

1 Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Paul R.

Thomson (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Amendment No.

Thomson (incorporated by reference to Exhibit

10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021).

2 Employment Agreement, dated October 8, 2021, by and between Orbsat Corp and Theresa Carlise.

(incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021).

Form of Indemnity Agreement, , by and between Orbsat Corp and Douglas Ellenoff entered into on November 18, 2021 (incorporated by reference to Exhibit B of Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed with the SEC on January 27, 2022).

Form of Registration Rights Agreement by and between Orbsat Corp and Douglas Ellenoff entered into on November 18, 2021 (incorporated by reference to Exhibit A of Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed with the SEC on January 27, 2022)..

(incorporated by reference to

Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021).

of Indemnity Agreement, , by and between Orbsat Corp and Douglas Ellenoff entered into on November 18, 2021 (incorporated by reference

to Exhibit B of Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed with the SEC on January 27, 2022).

of Registration Rights Agreement by and between Orbsat Corp and Douglas Ellenoff entered into on November 18, 2021 (incorporated

by reference to Exhibit A of Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed with the SEC on January 27, 2022)..

Restricted Stock Award Agreement, dated December 18, 2021, by and between Orbsat Corp and Charles M.

Fernandez (275,000 shares of restricted stock).

Fernandez (275,000 shares of restricted stock) (incorporated by reference to Exhibit 10.63 to the Company’s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Restricted Stock Award Agreement, dated December 18, 2021, by and between Orbsat Corp and Charles M.

Fernandez (101,000 shares of restricted stock).

Restricted Stock Award Agreement, dated December 18, 2021, by and between Orbsat Corp and David Phipps.

Form of Restricted Stock Award Agreement between the Company and each of Paul R Thomson (10,000 shares) and Theresa Carlise (15,000 shares), entered into in December 2021.

Fernandez (101,000 shares of restricted stock) (incorporated by reference to Exhibit 10.64 to the Company’s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Restricted Stock Award Agreement, dated December 18, 2021, by and between Orbsat Corp and David Phipps (incorporated by reference to Exhibit 10.65 to the Company’s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Form of Restricted Stock Award Agreement between the Company and each of Paul R Thomson (10,000 shares) and Theresa Carlise (15,000 shares), entered into in December 2021 (incorporated by reference to Exhibit 10.66 to the Company’s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Form of Restricted Stock Award Agreement between the Company and each of Kendall Carpenter, Louis Cusimano, Hector Delgado and John E.

Miller, entered into in December 2021.

Miller, entered into in December 2021 (incorporated by reference to Exhibit 10.67 to the Company’s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Form of Stock Option Grant Notice and Agreement between Orbsat Corp and each of Charles M.

Fernandez (75,000 shares), Paul R Thomson (10,000 shares) and Theresa Carlise (15,000 shares), entered into in December 2021.

Restricted Stock Award Agreement, dated December 20, 2021, by and between Orbsat Corp and Rodney Barreto.

Fernandez (75,000 shares), Paul R Thomson (10,000 shares) and Theresa Carlise (15,000 shares), entered into in December 2021 (incorporated by reference to Exhibit 10.68 to the Company’s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Restricted Stock Award Agreement, dated December 20, 2021, by and between Orbsat Corp and Rodney Barreto (incorporated by reference to Exhibit 10.69 to the Company’s Current Report on Form 10-K filed with the SEC on March 31, 2022).

Amendment No.

1 Employment Agreement, dated May 2, 2022, by and between NextPlat Corp and Andrew Cohen (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 15, 2022).

Stock Option Agreement, dated July 1, 2022, by and between NextPlat Corp and Charles M.

Fernandez (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 15, 2022).

Restricted Stock Agreement, dated July 22, 2022, by and between NextPlat Corp and Charles M.

Fernandez (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 15, 2022).

Securities Purchase Agreement, dated August 30, 2022, by and between NextPlat and Progressive Care Inc.

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 1, 2022)

Confidential Note Purchase and Release Agreement, dated August 30, 2022, by and between the Company, Progressive Care, Iliad Research and Trading, L.P., PharmCo, L.L.C., Charles Fernandez, Rodney Barreto, Daniyel Erdberg, and Sixth Borough Capital LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 1, 2022).

Debt Modification Agreement dated August 30, 2022, by and between the Company, Progressive Care, Charles Fernandez, Rodney Barreto, Daniyel Erdberg, and Sixth Borough Capital LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 1, 2022).

Director Services Agreement dated as of September 28, 2022, by and between the Company and M.

Cristina Fernandez (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed with the SEC on October 5, 2022).

Stock Option Agreement, dated as of October 1, 2022, by and between the Company and M.

Cristina Fernandez (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K/A filed with the SEC on October 5, 2022).

Securities Purchase Agreement dated November 16, 2022, by and between NextPlat and Progressive Care Inc.

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 18, 2022).

Form of Debenture (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 18, 2022).

Security Agreement, dated as of November 16, 2022, by Progressive Care, Inc., Touchpoint RX, LLC, Family Physicians RX, Inc., and ClearMetrX Inc.

in favor of NextPlat Corp (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on November 18, 2022).

Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on November 18, 2022).

Employment Agreement, dated as of November 7, 2022, by and between the Company and Robert Bedwell (incorporated by reference to Exhibit 10.6 the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2022).

Employment Agreement, dated as of November 14, 2022, by and between the Company and Paul Thomson (incorporated by reference to Exhibit 10.7 the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2022).

Employment Agreement, dated as of November 14, 2022, by and between the Company and Cecile Munnik (incorporated by reference to Exhibit 10.8 the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2022).

Stock Option Agreement dated December 5, 2022, and effective as of November 7, 2022, by and between the Company and Robert Bedwell (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K Filed on December 5, 2022).

Stock Option Agreement dated December 5, 2022, and effective as of November 14, 2022, by and between the Company and Cecile Munnik (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K Filed on December 5, 2022).

Form of Securities Purchase Agreement dated December 9, 2022, by and among the Company and the Investors (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 13, 2022).

Form of Registration Rights Agreement dated December 9, 2022, by and among the Company and the Investors (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on December 13, 2022).

Subsidiaries of NextPlat Corp

5 unchanged sentences

XBRL Taxonomy Schema Document

XBRL Taxonomy Calculation Document

XBRL Taxonomy Linkbase Document

XBRL Taxonomy Label Linkbase Document

XBRL Taxonomy Presentation Linkbase Document

Page Interactive Data File (embedded within the Inline XBRL document)

Inline XBRL Taxonomy Calculation Document

Inline XBRL Taxonomy Linkbase Document

Inline XBRL Taxonomy Label Linkbase Document

Inline XBRL Taxonomy Presentation Linkbase Document

Cover Page Interactive Data File (embedded within the Inline XBRL document)

have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

9 unchanged sentences

March 31, 2023

NEXTPLAT CORP

Executive Chairman and Chief Executive Officer (Principal Executive Officer)

Cecile Munnik

Chief Financial Officer, (Principal Financial Officer)

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registrant and in the capacities and on the dates indicated.

Executive Officer and Executive Chairman (Principal Executive Officer)

Executive Officer and Executive Chairman

Executive Officer)

/s/ Cecile Munnik

Chief Financial Officer (Principal Financial Officer)

March 31, 2023

Cecile Munnik

and Chief Executive Officer of Global Operations

Paul R Thomson

Vice President and Chief Financial Officer (Principal Financial Officer)

Vice President – Mergers, Acquisitions and Special Projects

Theresa Carlise

Accounting Officer, Secretary and Treasurer (Principal Accounting Officer)

Vice President of Operations

Accounting Officer, Secretary and Treasurer

Accounting Officer)

Robert Bedwell

Compliance Officer

Chairman and Chief Business Development Strategist

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Rodney Barreto

Maria Cristina Fernandez

Cristina Fernandez

CORP AND SUBSIDIARIES

Report of Independent Registered Public Accounting Firm RBSM LLP , New York, NY , (PCAOB ID.

Consolidated Financial Statements

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2021 and 2020

Financial Statements

Balance Sheets as of December 31, 2022 and 2021

Statements of Comprehensive Loss for the Years Ended December 31, 2022 and 2021

Statements of Stockholders’ Equity for the Years Ended December 31, 2022 and 2021

Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020

Notes to Consolidated Financial Statements

Statements of Cash Flows for the Years Ended December 31, 2022 and 2021

to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Corp and Subsidiaries

known as Orbsat Corp)

on the Financial Statements

have audited the accompanying consolidated balance sheets of NextPlat Corp & Subsidiaries (formerly known as Orbsat Corp) (the “Company”)

as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity,

and cash flows for each of the two years in the period ended December 31, 2021, and the related notes and schedules (collectively referred

to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects,

the financial positions of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cash

flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in

the United States of America.

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of NextPlat Corp and Subsidiaries (the “Company”) as of December

31, 2022 and 2021, and the related consolidated statements of comprehensive loss, stockholders’ equity and cash flows for each

of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the consolidated financial

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of

the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period

ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

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Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Audit Matters

audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements, and

(2) involved our especially challenging, subjective, or complex judgments.

did not identify any critical audit matters during the course of our audit for the year ended December 31, 2021.

have served as the Company’s auditor since 2014.

critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements

that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are

material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,

and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the

accounts or disclosures to which they relate.

Method Investment – Refer to Notes 7 to the consolidated financial statements

Audit Matter Description

described in Note 7, on August 30, 2022 the Company entered into a Securities Purchase Agreement (the “SPA”) with Progressive

(“Progressive”), which subsequently closed on September 2, 2022.

a result of the SPA and related transactions, the Company paid an aggregate of $7,000,000 for an economic and voting interest in Progressive

to September 2, 2022, the Company’s ownership interest decreased to 31.89% and as of December 31, 2022, the board seats, combined

with the Company’s ownership interest of 33.47% provide the Company with significant influence over Progressive, but not a controlling

Since Progressive does not depend on the Company for continuing financial support to maintain operations as of December 31,

2022, the Company has determined that Progressive is not a variable interest entity, and therefore, the Company is not required to determine

the primary beneficiary of Progressive for potential consolidation.

the Critical Audit Matter Was Addressed in the Audit

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated

financial statements.

procedures included, among others, (i) testing management’s process for determining the accounting treatment of the investment;

(ii) and testing the completeness and accuracy of the underlying data used to record the investment and recognize a gain or loss

on the investment.

testing and relying on Progressive’s financial data from the date of the investment to December 31, 2022.

Professionals

with specialized skill and knowledge were used to assist in evaluating the appropriate accounting treatment of the investment.

We have served as the Company’s auditor since

ID Number 587

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BALANCE SHEETS

receivable, net

expenses – current portion

current assets

Accounts receivable, net

Unbilled revenue

VAT receivable

Prepaid expenses – current portion

Other current assets

Total Current Assets

Property and equipment, net

Intangible Assets, net

Prepaid expenses – long term portion

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Assets

and equipment, net

of use assets, net

method investment

expenses – long term portion

Total Other Assets

AND STOCKHOLDERS’ EQUITY

payable and accrued expenses

payable Coronavirus loans– current portion

to related party

lease liabilities - current

Income taxes payable

subscription payable

from discontinued operations

Current Liabilities

Accounts payable and accrued expenses

Contract liabilities

Note payable – current portion

Note payable Coronavirus loans– current portion

Due to related party

Line of credit

Operating lease liabilities - current

Provision for income taxes

Stock subscription payable

Liabilities from discontinued operations

Total Current Liabilities

Long Term Liabilities:

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

Notes payable Coronavirus – long term

Operating lease liabilities – long term

Total Liabilities

Stockholders’ Equity

Preferred stock, $ 0.0001 par value;

3,333,333 shares authorized

Common stock, $ 0.0001

Term Liabilities:

payable Coronavirus – long term

lease liabilities – long term

Commitments and Contingencies

Stockholders’

stock, ($ 0.0001 par value;

3,333,333 shares authorized)

stock, ($ 0.0001 par

50,000,000 shares

authorized, 14,402,025 and 7,053,146

shares issued and outstanding as of December 31, 2022, and 2021,

issued and outstanding at December 31, 2020, respectively

Additional paid-in capital

Accumulated deficit

respectively)

paid-in capital

( 31,146,804 )

( 21,986,215 )

Accumulated other comprehensive income (loss)

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

other comprehensive (loss) income

Stockholders’ Equity

Liabilities and Stockholders’ Equity

accompanying notes to consolidated financial statements.

CORP AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Years Ended

Cost of sales

STATEMENTS OF COMPREHENSIVE LOSS

the Years Ended

general and administrative

wages and payroll taxes

and amortization

operating expenses

Selling, general and administrative

Salaries, wages and payroll taxes

Stock-based compensation

Professional fees

Depreciation and amortization

Total operating expenses

Loss from other expenses and income taxes

from operations

( 7,201,783 )

( 6,622,333 )

Other (income) expense:

Interest earned

Interest expense

Foreign currency exchange rate variance

Gain on debt extinguishment

Other expenses

Total other expense

Loss before provision for income taxes

(income) expense:

currency exchange rate variance

on debt extinguishment

other expense

before provision for income taxes

( 7,334,114 )

( 8,107,662 )

Provision for income taxes

for income taxes

Loss before equity in net loss of affiliate

( 7,421,114 )

( 8,107,662 )

Comprehensive loss:

in net loss of affiliate

( 1,739,475 )

( 9,160,589 )

Foreign currency translation adjustments

Comprehensive loss

( 8,107,662 )

Comprehensive

currency translation adjustments

Comprehensive

$ ( 9,204,542 )

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

Weighted number of common shares outstanding – basic & diluted

Basic and diluted net (loss) per share

$ ( 8,061,594 )

LOSS ATTRIBUTABLE TO STOCKHOLDERS

average number of common shares outstanding – basic & diluted

and diluted net (loss) per share

accompanying notes to consolidated financial statements.

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STATEMENTS OF STOCKHOLDERS’ EQUITY

THE TWO YEARS ENDED DECEMBER 31, 2021

$0.0001 Par Value

Balance, January 1, 2020

THE YEARS ENDED DECEMBER 31, 2022 AND 2021

January 1, 2021

$ ( 13,878,553 )

Issuance of common stock from convertible debt

Beneficial conversion feature of convertible debt

Issuance of common stock for options exercised

Stock-based compensation in connection with options granted

Stock-based compensation in connection with restricted stock awards

Issuance common stock from exercise of warrant

Issuance common stock from exercise of warrant, shares

Issuance of common stock related to offering

Issuance of common stock related to offering, shares

Issuance of common for over-allotment

Issuance of common for over-allotment, shares

Issuance of warrants for over-allotment

Comprehensive loss

of common stock from convertible debt

conversion feature of convertible debt

of common stock for options exercised

of common stock from exercise of warrant

of common stock related to June offering

of common for over-allotment

of warrants for over-allotment

compensation in connection with options granted

compensation in connection with restricted stock awards

Comprehensive

( 8,107,662 )

Balance, December 31, 2020

December 31, 2021

$ ( 21,986,215 )

Issuance of common stock from convertible debt

Beneficial conversion feature of convertible debt

Issuance of common stock for options exercised

Issuance of common stock from exercise of warrant

Issuance of common stock related to offering

Issuance of common for over-allotment

Issuance of warrants for over-allotment

Stock-based compensation in connection with options granted

Stock-based compensation in connection with restricted stock awards

Comprehensive gain

of common stock related to January offering

of common stock related to December offering

compensation in connection with restricted stock awards

compensation in connection with options granted

Comprehensive

( 9,160,589 )

Balance, December 31, 2021

December 31, 2022

( 31,146,804 )

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STATEMENTS OF STOCKHOLDERS’ EQUITY

THE TWO YEARS ENDED DECEMBER 31, 2021

THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Comprehensive

Stockholders’

Income (Loss)

Balance January 1, 2020

Issuance of common stock from convertible debt

Beneficial conversion feature of convertible debt

Issuance of common stock for options exercised

Stock-based compensation in connection with options granted

Stock-based compensation in connection with

January 1, 2021

of common stock from convertible debt

conversion feature of convertible debt

of common stock for options exercised

of common stock from exercise of warrant

of common stock related to June offering

of common for over-allotment

of warrants for over-allotment

compensation in connection with options granted

compensation in connection with

restricted stock awards

Comprehensive loss

Comprehensive

( 8,107,662 )

Balance, December 31, 2020

Issuance of common stock from convertible debt

Beneficial conversion feature of convertible debt

Issuance of common stock for options exercised

Issuance of common stock from exercise of warrant

Issuance of common stock related to June offering

Issuance of common for over-allotment

Issuance of warrants for over-allotment

Stock-based compensation in connection with options granted

Stock-based compensation in connection with

restricted stock awards

Comprehensive gain

December 31, 2021

of common stock related to January offering

of common stock related to December offering

compensation in connection with restricted stock awards

compensation in connection with options granted

Comprehensive

( 9,160,589 )

Balance, December 31, 2021

December 31, 2022

accompanying notes to consolidated financial statements

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STATEMENTS OF CASH FLOWS

For the Years Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

the Years Ended

FLOWS FROM OPERATING ACTIVITIES:

$ ( 9,160,589 )

$ ( 8,107,662 )

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

Depreciation expense

Amortization of intangible asset

Amortization of right of use asset

Amortization of debt discount, net

Stock-based compensation in connection with restricted stock awards

Stock-based compensation in connection with options granted

Gain on debt extinguishment

Changes in operating assets and liabilities:

Accounts receivable

Unbilled revenue

Prepaid expense

VAT receivable

Other current assets

Operating lease liabilities

Accounts payable and accrued liabilities

Provision for income taxes

Contract liabilities

Net cash used in operating activities

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

of intangible asset

of right of use asset

Write-off of website development cost

of debt discount, net

of loss from equity method investment

compensation in connection with restricted stock awards

compensation in connection with options granted

on debt extinguishment

in operating assets and liabilities:

current assets

lease liabilities

payable and accrued expenses

for income taxes

cash used in operating activities

( 3,601,502 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from (repayments to) related party, net

Proceeds from (repayments to) note payable Coronavirus loans

Proceeds from exercise of options

Proceeds from common stock offering

Proceeds from common over-allotment

Proceeds from warrants over-allotment

Proceeds from exercise of warrant

Proceeds from December offering

Proceeds from (repayments to) convertible notes payable

(Repayments to) proceeds from line of credit

Net cash provided by financing activities

Effect of exchange rate on cash

Net increase in cash

Cash beginning of year

Cash end of year

SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid during the period for

NON-CASH FINANCING AND INVESTING ACTIVITIES DURING THE YEAR

Beneficial conversion feature on convertible debt

Issuance common stock from convertible debt

( 4,092,090 )

FLOWS FROM INVESTING ACTIVITIES:

of property and equipment

of equity method investment

( 7,000,000 )

of Netherlands subsidiary

cash used in investing activities

( 7,715,592 )

FLOWS FROM FINANCING ACTIVITIES:

from (repayments to) related party, net

from (repayments to) note payable Coronavirus loans

Proceeds from exercise

from common stock offering

from common over-allotment

from warrants over-allotment

Proceeds from exercise

Gross proceeds from common stock offering January 2022

Gross proceeds from common stock offering December 2022

(Payment) of stock issuance costs

from (repayments to) convertible notes payable

to) proceeds from line of credit

cash provided by financing activities

of exchange rate on cash

increase in cash

beginning of year

CASH FLOW INFORMATION

paid during the year for

FINANCING AND INVESTING ACTIVITIES DURING THE YEAR

conversion feature on convertible debt

of common stock from convertible debt

accompanying notes to consolidated financial statements

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1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principals of Consolidation

These consolidated financial statements have been prepared by management

in accordance with general accepted accounting principles in the United States of America (“U.S.

GAAP”) and this basis assumes

that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and

commitments in the normal course of business.

and Description of Business

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

NextPlat currently generates

its revenues from the provision of a comprehensive array of communication services and related equipment sales.

In recent years the Company

has successfully leveraged e-commerce solutions to establish a truly global reach.

We intend to achieve our mission and further grow

our business by pursuing the following strategies:

increased product offerings, marketplace expansion, government sourced revenue, product

innovation, future acquisitions and E-Commerce Platforms.

Leveraging 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.

detailed in Online Storefronts and E-Commerce Platforms below, the Company operates two main e-commerce websites as well as 25

third-party e-commerce storefronts platforms 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

Company was originally incorporated in 1997 in Florida.

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enter the potash business.

accounting purposes, this transaction was accounted for as a reverse acquisition and has been treated as a recapitalization of the Company

with GTC considered the accounting acquirer, and the financial statements of the accounting acquirer became the financial statements

of the registrant.

The completion of the Share Exchange resulted in a change of control.

The Share Exchange was accounted for as a reverse

acquisition and re-capitalization.

The GTC shareholders obtained approximately 39% of voting control on the date of Share Exchange.

was the acquirer for financial reporting purposes and the Company was the acquired company.

The consolidated financial statements after

the acquisition include the balance sheets of both companies at historical cost, the historical results of GTC and the results of the

Company from the acquisition date.

All share and per share information in the accompanying consolidated financial statements and footnotes

has been retroactively restated to reflect the recapitalization.

See Note 12 – Stockholders’ Equity.

Satcom Corp, a Nevada corporation was formed on November 14, 2014.

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a merger with a newly formed wholly owned subsidiary.

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

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

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

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a newly formed wholly owned subsidiary.

March 24, 2021, the Company’s shareholders via majority shareholder consent authorized a stock

split not to exceed 1-for-5 reverse stock split .

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

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

The Company’s

Board of Directors (the “Board”) subsequently approved the 1-for-5

reverse stock split .

The Company filed a Certificate

of Change to its Amended and Restated Articles of Incorporation to effect a reverse stock split of its issued and outstanding common

stock, at a ratio of 1-for-5 .

Board of Directors (the “Board”) subsequently approved the 1-for-5 reverse stock split.

The Company filed a Certificate of

Change to its Amended and Restated Articles of Incorporation to effect a reverse stock split of its issued and outstanding common stock,

at a ratio of 1-for-5 .

The effective time of the reverse stock split was 12:01 a.m.

ET on May 28, 2021.

The Company’s common stock began trading on a

split-adjusted basis commencing upon market open on May 28, 2021.

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

The Company’s common stock

began trading on a split-adjusted basis commencing upon market open on May 28, 2021.

The common stock has been assigned a new CUSIP number,

The warrants were assigned the CUSIP number, 68557F 118.

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

No fractional shares of common stock were issued as a result of

the reverse stock split.

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

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certificate of amendment to the Company’s Amended and Restated Articles of Incorporation changing the Company’s name to NextPlat

The Name Change Amendment was filed on January 18, 2022, and t he Company’s

name change from Orbsat Corp to NextPlat Corp was effective as of January 21, 2022.

The Name Change Amendment was filed on January 18, 2022, and the Company’s name change from Orbsat Corp to NextPlat Corp

was effective as of January 21, 2022.

January 21, 2022, the trading symbol for the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”)

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“OSAT” and “OSATW,” respectively.

June 22, 2022, NextPlat B.V.

(“NXPLBV”) was formed in Amsterdam, Netherlands, as a wholly owned subsidiary of NextPlat Corp.

Presently, NXPLBV does not have any active operations.

September 2, 2022, the Company 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 $ 6.0 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 500

votes per share.

Likewise, each share of Series B Preferred Stock is convertible into 500

shares of Progressive Care common stock.

In addition, the Series B Preferred Stock has a liquidation and dividend preference.

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.

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

$ 2.8 million.

The aggregate purchase price paid to Iliad for the Note was $ 2.3 million of which NextPlat contributed $ 1.0 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 %

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

In addition, the conversion price under the note was changed to $ 4.00

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 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.

On November 16, 2022, the Company

entered into a Securities Purchase Agreement (the “SPA”) with Progressive Care, 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 Care (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 Care only as approved by the Company’s Board of Directors.

Until used, 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.

No debentures were

purchased under the SPA for the year ended December 31, 2022.

In 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 Care 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.

In 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 Care’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, etc.).

In addition, each

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

At the Company’s

election, interest can be paid in cash, shares of Progressive Care’s common stock, or some combination thereof.

Progressive Care

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 Care’s common stock.

Upon the prepayment of a

Debenture, Progressive Care 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 Care will be subject to certain restrictive covenants, including with respect to the incurrence of indebtedness,

the imposition of liens on Progressive Care’s assets, changes to the Progressive Care’s organization documents, etc.

In connection with

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

Care 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 Care’s obligations under the Debentures.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Company’s former operations were developing and manufacturing products and services, which reduce fuel costs, save power and energy

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The products and services were made available for sale into markets in the public and private sectors.

December 2009, the Company discontinued these operations and disposed of certain of its subsidiaries, and prior periods have been restated

in the Company’s consolidated financial statements and related footnotes to conform to this presentation.

December 2009, the Company discontinued these operations and disposed of certain of its subsidiaries.

remaining liabilities for discontinued operations are presented in the consolidated balance sheets under the caption “Liabilities

from discontinued operation” and relates to the discontinued operations of developing and manufacturing of energy saving

and fuel-efficient products and services.

The carrying amounts of the major classes of these liabilities as of December 31, 2021, and

2020 are summarized as follows:

from discontinued operation” and relates to the discontinued operations of developing and manufacturing of energy saving and fuel-efficient

products and services.

The carrying amounts of the major classes of these liabilities as of December 31, 2022, and 2021 are summarized

SUMMARY OF CARRYING AMOUNT OF MAJOR CLASSES OF LIABILITIES

December 31, 2021

December 31, 2020

Assets of discontinued operations

Accounts payables and accrued expenses

of discontinued operations

payables and accrued expenses

$ ( 112,397 )

Liabilities from discontinued operations

from discontinued operations

$ ( 112,397 )

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

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

All material intercompany

balances and transactions have been eliminated in consolidation.

Orbital Satcom Corp, (“Orbital Satcom”), Global Telesat Communications Limited, (“GTC”) and NextPlat B.V.

All material intercompany balances and transactions have been eliminated in consolidation.

2021 Public Offering

an early-stage growth company, NextPlat’s ability to access capital is critical.

On June 2, 2021, through an upsized underwritten

public offering of 2,880,000

units at a price to the public of $ 5.00

per unit, the Company received gross proceeds

of $ 14,404,666 (the

public offering of 2,880,000 units at a price to the public of $ 5.00 per unit, the Company received gross proceeds of $ 14,404,666 (the

“June Offering”).

See Note 12, Stockholders’ Equity, for more information

regarding the June Offering.

See Note 12, Stockholders’ Equity, for more information regarding the June Offering.

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

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

432,000 warrants at $ 0.01 per warrant, which had an exercise price of $ 5.00 per share and a 5 year term, for additional gross proceeds to the Company of $ 4,320 .

On June 28, 2021, the Underwriter, upon

1 unchanged sentence

gross proceeds of $ 2,155,680 from the sale of the Shares.

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.

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.

December 9, 2022, the Company entered into placement agency agreement (the “Placement Agency Agreement”) with Dawson James

Securities, Inc.

(“Dawson James”).

The Company has agreed to pay Dawson James a placement agent fee of 6 % of the gross proceeds

received in the private placement and 3 % on all proceeds from officers and directors including any directed orders from the Company.

As additional compensation under the Placement Agency Agreement, the Company will issue Dawson James warrants (the “Placement Agent

Warrants”) to purchase up to 549,051 shares of Common Stock with an exercise price of $ 1.75 per share.

The Placement Agent Warrants

are exercisable at any time and from time to time during the three-year period commencing on the six-month anniversary of the closing

The Company reimbursed Dawson for up to $ 100,000 for its legal and due diligence expenses.

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

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

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

financial statements have been prepared by management in accordance with GAAP and this basis assumes that the Company will continue as

a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course

These financial statements do not include any adjustments that may result from the outcome of this uncertainty.

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

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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.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION

AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

Reclassification

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

These reclassifications had no effect on

the reported results of operations.

and Cash Equivalents

Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents.

places its cash with a high credit quality financial institution.

The Company’s account at this institution is insured by the Federal

Deposit Insurance Corporation (“FDIC”) up to $ 250,000 .

All cash amounts in excess of $ 250,000 , $ 17,017,978 , are unsecured.

To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the

financial institution in which it holds deposits.

Company places its cash with a high credit quality financial institution.

The Company’s accounts at this institution are insured

by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 .

All cash amounts in excess of $ 250,000 ,

$ 18,290,725 , are

unsecured at December 31, 2022.

To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually

the rating of the financial institution in which it holds deposits.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Receivable and Allowance for Doubtful Accounts

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value of inventories is recorded to cost of goods sold.

expenses current and long term amounted to $ 97,068

and $ 49,867 ,

respectively for the year ended December 31, 2021, as compared to $ 1,784

at for the year ended December 31, 2020.

Prepaid expenses include prepayments in cash for accounting fees, prepayments in equity instruments, which are being amortized over the

terms of their respective agreements, as well as cost associated with certain contract liabilities.

The current portion consists of costs

paid for future services which will occur within a year.

expenses current and long term amounted to $ 45,679 and $ 49,078 , respectively for the year ended December 31, 2022, as compared to $ 97,068

and $ 49,867 for the year ended December 31, 2021.

Prepaid expenses include prepayments in cash for accounting fees, prepayments in

equity instruments, which are being amortized over the terms of their respective agreements, as well as cost associated with certain

contract liabilities.

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

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 carrying value of our equity method investment is reported as “equity method investment” on the consolidated

balance sheets.

The Company’s equity method investment is reported at cost and adjusted each period for the Company’s share

of the investee’s income or loss and dividend paid, if any.

The Company’s proportionate share of the net loss resulting from

these investments is reported under the line item captioned “equity in net loss of affiliate” in the consolidated

statements of operations and comprehensive loss.

Note 7 contains additional information on the equity method investment.

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 investee as of December 31, 2022 and determined that the

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

Currency Translation

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TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recognition and Unearned Revenue

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At December 31, 2022, we had contract liabilities

of approximately $ 36,765 .

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

of $ 36,415 .

At December 31, 2021, we had contract liabilities of $ 36,765 .

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

of Product Sales and Services

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because the Company includes in revenue the related costs that the Company bills its customers.

incurred for producing and communicating advertising for the Company are charged to operations as incurred.

Advertising expense was $ 92,549

and $ 61,922 for the years ended December 31, 2022 and 2021, respectively.

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

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SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT

Office furniture and fixtures

Computer equipment

Rental equipment

Website development

furniture and fixtures

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

expense for the years ended December 31, 2022, and 2021 was $ 465,059 and $ 292,102 , respectively.

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estimated fair value and its book value.

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

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

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

for Derivative Instruments

Fair Value of Financial Instruments

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

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

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

value in accordance with the accounting guidance.

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

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

Company did not identify any other assets or liabilities that are required

to be presented on the consolidated balance sheets at fair value in accordance with the accounting guidance.

The carrying amounts reported

in the balance sheet for cash, accounts payable, accrued expenses, and notes payable approximate their estimated fair market values based

on the short-term maturity of the instruments.

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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TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 issued to non-employees (for example, service providers, external legal counsel,

suppliers, etc.).

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 issued 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.

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.

Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”)

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TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

calculating the right of use asset and lease liability, the Company has elected to combine lease and non-lease components.

excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and

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

December 31, 2021 and 2020, the Company had aggregated current and long-term operating lease liabilities of $ 19,763 and $ 0 , respectively,

and right of use assets of $ 22,643 and $ 55,606 , respectively.

excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes

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

and Development

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For the Company, comprehensive

loss for the years ended December 31, 2021and 2020 included net loss and unrealized losses from foreign currency translation adjustments.

income (loss) for the years ended December 31, 2022 and 2021 included net income (loss) and unrealized income (losses) from foreign currency translation adjustments.

per Common Share

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SCHEDULE OF DILUTIVE COMMON STOCK EQUIVALENTS

notes payable (1)

(1) 1,245,468

shares of our common stock issuable upon conversion of $ 1,294,268

of Convertible Notes Payable as of December 31, 2020, not accounting for 4.99 %

beneficial ownership limitations.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Party Transactions

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Early adoption is permitted, including adoption in an interim

The Company is currently evaluating the impact that this standard will have on its consolidated financial statements.

The Company adopted the statement on its effective date and it had no impact on the Company’s financial results for the

year ended December 31, 2022.

October 2021, the FASB issued guidance which requires companies to apply Topic 606, Revenue from Contracts with Customers, to recognize

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TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

a material impact on the consolidated financial statements upon adoption.

The Company does not discuss recent pronouncements that are

not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

2 – INVENTORIES

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the EU, (“BREXIT”).

For the year ending December 31, 2021, the Company recorded a receivable in the amount of $ 491,417 for

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

Subsequently to December 31, 2021, the Company has received

a total of £ 70,756 or $ 95,759 , using an exchange rate close of 1.3533720 GBP:USD, in regard to this receivable.

For the years ending December 31, 2022 and 2021, the Company recorded a receivable in the amount of $ 432,769

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

Subsequently to December

31, 2022 and 2021, the Company has received a total of £ 80,570 or $ 96,740 , using an exchange rate close of 1.20069 GBP:USD and

£ 70,756 or $ 95,759 , using an exchange rate close of 1.3533720 GBP:USD, in regard to this receivable.

4 – PREPAID EXPENSES

expenses current and long term amounted to $ 97,068

and $ 49,867 ,

respectively for the year ended December 31, 2021,

as compared to $ 1,784 and

for the year ended December 31, 2020.

Prepaid expenses include prepayments in cash for accounting fees, prepayments in equity instruments,

which are being amortized over the terms of their respective agreements, as well as cost associated with certain contract liabilities.

expenses current and long term amounted to $ 45,679 and $ 49,078 , respectively for the year ended December 31, 2022, as compared to $ 97,068

and $ 49,867 for the year ended December 31, 2021.

Prepaid expenses include prepayments in cash for accounting fees, prepayments in equity

instruments, which are being amortized over the terms of their respective agreements, as well as cost associated with certain contract

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

3 unchanged sentences

furniture and fixtures

Property, Plant and Equipment, Gross

development (1)

and equipment gross

accumulated depreciation

1 unchanged sentence

( 1,502,501 )

expense was $ 292,102 and $ 269,926 for the year ended December 31, 2021 and 2020, respectively.

increase in website development is directly related to the Company’s investment in its enterprise resource planning “ERP”

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.

expenses were $ 465,059 and

$ 292,102 for

the year ended December 31, 2022 and 2021, respectively.

Total property and equipment were reduced by approximately

$ 133,000 for assets still in service.

These assets had a net book value of $ 0 as of December 31, 2022.

CORP AND SUBSIDIARIES

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the years ended December 31, 2022 and 2021, there were no additional expenditures on research and development.

June 22, 2022, the Company formed its Netherlands subsidiary, NextPlat B.V.

with $ 1.00 .

7 – EQUITY METHOD INVESTMENT IN PROGRESSIVE CARE, INC.

AND SUBSIDIARIES

(a publicly traded company) is a personalized healthcare services and technology company that provides prescription pharmaceuticals

and risk and data management services to healthcare organization and providers.

On August 30, 2022 the Company entered into a Securities

Purchase Agreement (the “SPA”) with Progressive Care, Inc.

(“Progressive”), which subsequently closed on September

2, 2022, pursuant to which the Company purchased 3,000 newly issued units of securities from Progressive at a price per unit of $ 2,000 ,

for an aggregate purchase price of $ 6,000,000 .

Each unit consists of one share of Progressive Series B Convertible Preferred Stock (“Series

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

share of Series B Preferred Stock will vote as a class with the common stock of Progressive, and will have 500 Progressive votes per

share, and each share of Series B Preferred Stock will be convertible into 500 shares of Progressive’s common stock.

are exercisable at a price of $ 2,000 per share of Series B Preferred Stock have a five-year term, and are immediately exercisable, in

whole or in part, and contain cashless exercise provisions.

The Company determined the Series B Preferred Stock is in-substance common

stock because the Series B Preferred Stock has similar risk and reward characteristics to common stock.

to the SPA, NextPlat’s Chairman and Chief Executive Officer, Charles M.

Fernandez and board member, Rodney Barreto, were appointed

to Progressive’s Board of Directors as Chairman of the Company’s Board of Directors and Vice Chairman, respectively.

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, entered into a Confidential Purchase and Release Agreement (the “NPA”) with a third-party

lender to Progressive pursuant to which NextPlat agreed to purchase $ 1,000,000 of Progressive’s principal convertible debt from

the third-party (the “Note Purchase”) and was issued 45,652 of Progressive common stock.

NextPlat paid an aggregate of $ 1,000,000

for the Note Purchase and common stock.

The convertible note receivable has a principal balance of $ 1,213,429 , carries a simple interest

rate of 5 %, is convertible at $ 4.00 per share of common stock, and matures on August 31, 2027 .

a result of the SPA and related transactions, the Company paid an aggregate of $ 7,000,000 for an economic and voting interest in Progressive

Subsequent to September 2, 2022, the Company’s ownership interest decreased to 31.89 %.

As of December 31, 2022, the

board seats, combined with the Company’s ownership interest of 33.47 % provide the Company with significant influence over Progressive,

but not a controlling interest.

Since Progressive does not depend on the Company for continuing financial support to maintain operations

as of December 31, 2022, the Company has determined that Progressive is not a variable interest entity, and therefore, the Company is

not required to determine the primary beneficiary of Progressive for potential consolidation.

Based on quoted market prices, the market

value of the Company’s ownership interest in Progressive was approximately $ 10.05 million at December 31, 2022.

Company combined its investment in the Series B Preferred Stock, common stock, warrants, and convertible note receivable into one line

item on the consolidated balance sheets as “Equity method investment”.

The Company reported its aggregate earnings

from its investment as one line item on the consolidated statement of operations as “Equity in net loss of affiliate”.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7 – EQUITY METHOD INVESTMENT IN PROGRESSIVE CARE, INC.

AND SUBSIDIARIES (continued)

following summarizes the Company’s consolidated balance sheet description equity method investment as follows:

OF DESCRIPTION EQUITY METHOD INVESTMENT

30, 2022, beginning balance

of loss from Progressive Care, Inc.

and Subsidiaries

( 1,734,576 )

expense due to cost basis difference (1)

earned from convertible note receivable

earned from amortization of premium on convertible note receivable

of intercompany interest earned

31, 2022, carrying amount

following summarizes the Company’s consolidated statements of operations and comprehensive loss description equity in

net loss of affiliate for the year ended December 31, 2022 as follows:

the Year Ended

December 31, 2022

in net loss of affiliate

$ ( 1,734,576 )

expense due to cost basis difference (1)

earned from convertible note receivable

earned from amortization of premium on convertible note receivable

of intercompany interest earned

in net loss of affiliate

$ ( 1,739,475 )

records depreciation expense on its estimated cost basis difference which is subject to change

8 - ACCOUNTS PAYABLE AND ACCRUED OTHER LIABILITIES

payable and accrued other liabilities consisted of the following:

payable and accrued expenses consisted of the following:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED OTHER LIABILITIES

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liability & sales tax payable

income tax payable

Accrued legal fees

accrued other liabilities

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TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8 – 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.

9 – CONVERTIBLE NOTES PAYABLE

notes payable – long term

2021 Financing

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

individual accredited investor (the “Lender”).

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

promissory note with a principal amount of $ 350,000

(the “March 2021 Note”).

2021 Note is a general, unsecured obligation of the Company and bears simple interest at a rate of 7 %

per annum and matures on the third anniversary of the date of issuance (the “Maturity Date”), to the extent that the

March 2021 Note and the principal amount and any interest accrued thereunder have not been converted into shares of the Company’s

common stock.

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

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:

(i) the then 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 .

“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.

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.

in the March 2021 Note is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities

There were no discounts or brokerage fees associated with this offering.

The Company used the offering proceeds for working capital

and general corporate purposes.

In April 2021 the Noteholder waived contractual pre-emptive rights set forth in the March 2021 NPA.

On May 27, 2021, the Lender converted $ 350,000 of the March 2021 Note into 100,000 shares of common stock.

2020 Financing

On 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”).

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.

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

4 unchanged sentences

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.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 9– CONVERTIBLE NOTES PAYABLE

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

SCHEDULE OF CONVERTIBLE NOTES PAYABLE

( 1,084,944 )

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 $ 1,644,267

of the convertible debt to 1,345,468

shares of common shares.

June 15, 2020, the change in conversion price from $ 0.50 to $ 1.00 per share, resulted in a difference in the carrying value of the balance

of the note payable.

Under ASC 470-50-40-13, if it is determined that the original and new debt instruments are substantially different,

the new debt instrument shall be initially recorded at fair value, and that amount shall be used to determine the debt extinguishment

gain or loss to be recognized and the effective rate of the new instrument.

The original debt had a carrying value of $ 269,262 as of

June 15, 2020, the fair value of the amended debt was $ 0 ($ 792,932 principle netted with the $ 792,392 note payable discount), which resulted

a gain from the extinguishment of debt $ 269,262 .

Further, as of June 30, 2020, the Company recorded a beneficial conversion feature of

the amended note of $ 17,041 , resulting in a balance of unamortized discount notes payable of $ 775,892 as of June 30, 2020.

ended December 31, 2020, the Company amortized the discount on the debt, to interest expense of $ 538,087 , resulting in a balance of unamortized

discount notes payable of $ 329,683 .

the year ended December 31, 2020, the Holders converted a total of $ 687,734 of the convertible debt to 699,800 shares of common shares,

26,823 of which were at the conversion rate of $ 0.50 per share and 672,978 of which were at the conversion rate of $ 1.00 per share.

balance of the convertible notes at December 31, 2020, net of unamortized discount of $ 1,084,944 , is $ 209,323 .

NOTE 10 STOCK SUBSCRIPTION PAYABLE

On 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.

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

For 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

March 5, 2021, the Company entered into a Note Purchase Agreement (the “March 2021 NPA”) with an individual accredited investor

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

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 bore simple interest at a rate of 7 % per annum, maturing on the third anniversary of

the date of issuance.

The Company’s issuance of the March 2021 Note 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.

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

In April 2021 the Noteholder waived contractual

pre-emptive rights set forth in the March 2021 NPA.

On May 27, 2021, the Lender converted $ 350,000 of the March 2021 Note into 100,000

shares of common stock.

the year ended December 31, 2021, the Holders of the August 2020 Notes and the December 2020 Notes, converted a total of $ 1,644,267 of

the convertible debt to 1,345,468 shares of common shares, resulting in the amortization of the debt discount, to interest expense $ 1,425,365 .

the years ended December 31, 2022 and 2021, the balances of the Company’s convertible note payable was $ 0 and $ 0 , respectively.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS (CONTINUED)

10 - STOCK SUBSCRIPTION PAYABLE

the years ended December 31, 2022 and 2021, the Company had a stock subscription payable of $ 0 and $ 1,400,000 , respectively.

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 2021 Offering”).

On January 2, 2022, the Company delivered to December Investors a fully executed Purchase Agreement, which was dated December 31, 2021.

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

Nasdaq on December 31, 2021.

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

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

1 unchanged sentence

11 - CORONAVIRUS LOANS

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 ,

April 20, 2020, the Board of Directors of 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

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

6 unchanged sentences

The first repayment of £ 4,166.67

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

after July 16, 2020.

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

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

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

or, if less, the balance of the debenture .

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

be used for general corporate and working capital purposes.

The Debenture is secured by all GTC’s assets as well as a guarantee by the

UK government and David Phipps, President, with the proceeds of the Debenture are to be used for general corporate and working

capital purposes.

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

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

of Default”).

(i) non-payment of amounts due

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

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

As of December 31, 2021, and

2020, the Company has recorded $ 56,391

As of December 31, 2022, and 2021, the

Company has recorded $ 60,490

as current portion of notes payable and $ 156,266

8 unchanged sentences

31, 2021, the Company has recorded $ 20,832 as forgiveness of debt.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12 - STOCKHOLDERS’ EQUITY

March 28, 2014, in connection with the Reincorporation (see Note 1), all share and per share values for all periods presented in the

accompanying consolidated financial statements are retroactively restated for the effect of the Reincorporation.

March 5, 2016, the Company shareholders voted in favor of an amendment to its Articles of Incorporation to increase the total number

of shares of authorized capital stock to 800,000,000 shares consisting of (i) 750,000,000 shares of common stock and (ii) 50,000,000

shares of preferred stock from 220,000,000 shares consisting of (i) 200,000,000 shares of common stock and (ii) 20,000,000 shares of

preferred stock.

March 8, 2018, we conducted a reverse split of our common stock at a ratio of 1 for 150 .

All share and per share information in the accompanying

consolidated financial statements and footnotes has been retroactively restated to reflect the reverse split.

July 24, 2019, the Company filed a Certificate of Change (the “Certificate of Change”) with the Nevada Secretary of State.

The Certificate of Change provides for (i) a 1-for-15 reverse split (the “Reverse Split”) of the Company’s common stock,

$ 0.0001 par value per share, and the Company’s preferred stock, $ 0.0001 par value per share, (ii) a reduction in the number of

authorized shares of common stock in direct proportion to the Reverse Split (i.e.

from 750,000,000 shares to 50,000,000 shares), and

(iii) a reduction in the number of authorized shares of preferred stock in direct proportion to the Reverse Split (i.e.

from 50,000,000

shares to 3,333,333 shares).

No fractional shares will be issued in connection with the Reverse Split.

Stockholders who otherwise would

be entitled to receive fractional shares of common stock or preferred stock, as the case may be, will have the number of post-Reverse

Split shares to which they are entitled rounded up to the nearest whole number of shares.

No stockholders will receive cash in lieu of

fractional shares.

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

May 28, 2021, the Company effected a reverse

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

“Reverse Split”).

have authorized 3,333,333 shares of $ 0.0001 par value of preferred stock.

No preferred stock was outstanding for any year presented.

have authorized 50,000,000 shares of $ 0.0001 par value common stock.

As of December 31, 2022 and 2021, 14,402,025 and 7,053,146 shares,

respectively, were issued and outstanding.

May 28, 2021, the Company effected a reverse stock split of its common stock at a ratio of 1-for-5 (the “Reverse Split”).

No fractional shares of common stock were issued as a result of the Reverse Split.

Stockholders of record

who were otherwise entitled to receive a fractional share received a whole share.

The conversion or exercise prices of Company’s

issued and outstanding convertible securities, stock options and warrants will be adjusted accordingly.

All information presented in

this Annual Report on Form 10-K, assumes a 1-for-5

reverse stock split of Company’s outstanding

shares of common stock, and unless otherwise indicated, all such amounts and corresponding conversion price or exercise price data set

forth in this Annual Report on Form 10K have been adjusted to give effect to such assumed reverse stock split.

Stockholders of record who were otherwise entitled

to receive a fractional share received a whole share.

The conversion or exercise prices of Company’s issued and outstanding convertible

securities, stock options and warrants were adjusted accordingly.

All information presented, assumes a 1-for-5 reverse stock split of Company’s

outstanding shares of common stock, and unless otherwise indicated, all such amounts and corresponding conversion price or exercise price

data set forth have been adjusted to give effect to such assumed reverse stock split.

on the Nasdaq Capital Market

3 unchanged sentences

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

authorized capital of the Company consists of 50,000,000

shares of common stock, par value $ 0.0001

per share and 3,333,333

shares of preferred stock, par value $ 0.0001

As of December 31, 2021, and 2020,

there were and 7,053,146

shares of common stock and 0

shares of preferred stock issued and outstanding,

respectively.

of December 31, 2021 and 2020, there were no preferred shares issued and outstanding.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

of December 31, 2021, there were 2,836,092 registered warrants authorized to purchase of common stock and 2,530,092 registered warrants

issued and outstanding.

June 2, 2021, the Company issued 2,880,000 warrants to purchase 2,880,000 shares of common stock in an offering, at an exercise price

of $ 5.00 and a term of 5 years.

June 10, 2021, the Company issued 1,000 shares of common stock in our June Offering, as described below, for the exercise of 1,000 warrants,

at an exercise price of $ 5.00 , for cash consideration of $ 5,000 .

June 28, 2021, the Company issued an additional 432,000 warrants to purchase 432,000 shares of common stock in June Offering, at an exercise

price of $ 5.00 and a term of 5 years.

July 6, 2021, the Company issued 78,500 shares of common stock, for the exercise of 78,500 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 392,500 .

July 8, 2021, the Company issued 425,000 shares of common stock, for the exercise of 425,000 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 2,125,000 .

July 12, 2021, the Company issued 2,000 shares of common stock, for the exercise of 2,000 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 10,000 .

July 13, 2021, the Company issued 59,853 shares of common stock, for the exercise of 59,853 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 299,265 .

July 14, 2021, the Company issued 278,555 shares of common stock, for the exercise of 278,555 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 1,392,775 .

July 15, 2021, the Company issued 5,000 shares of common stock in connection with the exercise of 5,000 options, for cash consideration

July 19, 2021, the Company issued 1,000 shares of common stock, for the exercise of 1,000 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 5,000 .

July 30, 2021, the Company issued 80,000 shares of common stock, for the exercise of 80,000 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 400,000 .

2022 Private Placement of Common Stock (“December Offering”)

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.

December 9, 2022, the Company entered into placement agency agreement (the “Placement Agency Agreement”) with Dawson James

Securities, Inc.

(“Dawson James”) pursuant to which Dawson James agreed to serve as lead or managing placement agent on a

best efforts, agency basis in connection with the private placement of the Units.

The Company has agreed to pay Dawson James a placement

agent fee of 6 % of the gross proceeds received in the private placement and 3 % on all proceeds from officers and directors including

any directed orders from the Company.

As additional compensation under the Placement Agency Agreement, the Company will issue Dawson

James warrants (the “Placement Agent Warrants”) to purchase up to 549,051 shares of Common Stock with an exercise price of

$ 1.75 per share.

The Placement Agent Warrants are exercisable at any time and from time to time during the three-year period commencing

on the six month anniversary of the closing date.

2022 Private Placement of Common Stock (“January Offering”)

January 2, 2022, the Company finalized and closed a securities purchase agreement (the “Purchase Agreement”) in connection

with the sale in a private placement by the Company of 2,229,950 shares of the Company’s common stock The purchase price for the

common stock sold in the offering was $ 3.24 per share.

Company received gross proceeds from the sale of the common stock of $ 7,225,038 .

Legal and registration fees amounted to $ 220,000 ,

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

Prior to the private placement close, proceeds of $ 1,400,000 ,

were received and recorded as a stock subscription payable, for the year ended December 31, 2021.

The Company intended to use the proceeds

from the offering for general corporate purposes, including potential acquisitions and joint ventures.

Approximately 73 %

of funds raised were secured from existing shareholders

and from the members of the Company’s senior management and Board of Directors.

2021 Public Offering (“June Offering”)

June 2, 2021, through an upsized underwritten public offering of 2,880,000 units at a price to the public of $ 5.00 per unit, the Company

received gross proceeds of $ 14,404,666 .

connection with closing of the offering, the underwriter partially exercised its overallotment option and purchased an additional 432,000

warrants, which had an exercise price of $ 5.0 0 per share and a term of 5 years, at $ 0.01

per warrant for additional gross proceeds to the Company of $ 4,320 .

On June 28, 2021, the Underwriter, upon the exercise in full of the balance of its over-allotment option, purchased 432,000

additional shares of the common stock for additional gross proceeds of approximately $ 2.2

million from the sale of the Shares.

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13 – WARRANTS

addition to, but separate from, the registered warrants included in the units sold in the June Offering, the Company issued 144,000 warrants

3 unchanged sentences

110 % of the public offering price per unit in the June Offering.

of December 31, 2021, there were 144,000

Underwriter Warrants issued and outstanding.

December 9, 2022, pursuant to the December Offering, the Company issued warrants to purchase 4,575,429 shares of common stock in an offering,

at an exercise price of $ 1.75 and a term of 3 years .

Agent Warrants

addition to, but separate from, the unregistered warrants included in the units sold in the December Offering, the Company issued 549,051

warrants to purchase shares of Common Stock with an exercise price of $ 1.75

per share, to its Placement Agent Dawson James Securities Inc.

The Placement Agent Warrants are exercisable at any time and from

time to time during the three-year period commencing on the six-month anniversary of the closing date.

of December 31, 2022 and 2021, there were 549,051 and 144,000 Underwriter Warrants issued and outstanding, respectively.

summary of the status of the Company’s total outstanding warrants and changes during the year ended December 31, 2022 is as follows:

SCHEDULE OF OUTSTANDING STOCK WARRANTS ACTIVITIES

Average Exercise

Balance at January 1, 2021

Balance outstanding and exercisable at December 31, 2021

at January 1, 2021

outstanding and exercisable at December 31, 2021

Balance at January 1, 2022

Balance outstanding and exercisable at December 31, 2022

of December 31, 2022, and December 31, 2021, there were 7,654,572 and 2,530,092 warrants outstanding, respectively.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

the year ended December 31, 2021

January 12, 2021, the Company issued an aggregate of 30,000 shares of common stock upon the conversion of $ 30,000 of its convertible

debt, at the conversion rate of $ 1.00 per share.

February 23, 2021, the Company issued an aggregate of 80,289 shares of common stock upon the conversion of $ 80,289 of its convertible

debt, at the conversion rate of $ 1.00 per share.

February 23, 2021, the Company issued an aggregate of 120,000 shares of common stock upon the conversion of $ 150,000 of its convertible

debt, at the conversion rate of $ 1.25 per share.

February 23, 2021, the Company issued an aggregate of 1,000 shares of common stock for services in the amount of $ 14,200 .

March 1, 2021, the Company issued an aggregate of 149,532 shares of common stock upon the conversion of $ 149,532 of its convertible debt,

at the conversion rate of $ 1.00 per share.

March 1, 2021, the Company issued an aggregate of 38,616 shares of common stock upon the conversion of $ 48,270 of its convertible debt,

at the conversion rate of $ 1.25 per share.

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

for 5 reverse stock split.

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

The Company’s Board of Directors subsequently approved the 1-for-5 reverse stock split.

The Company has filed a Certificate

of Change to its Amended and Restated Articles of Incorporation to effect a reverse stock split of its issued and outstanding common

stock, at a ratio of 1-for-5.

The effective time of the reverse stock split will be 12:01 a.m.

ET on May 28, 2021 .

The Company’s common stock will begin trading on a split-adjusted basis commencing upon market open on May 28, 2021.

stock will be assigned a new CUSIP number, 68557F 209.

The warrants will be assigned the CUSIP number, 68557F 118.

No fractional shares

of common stock will be issued as a result of the reverse stock split.

Stockholders of record who would otherwise be entitled to receive

a fractional share will receive a whole share.

May 20, 2021, Company issued an aggregate of 29,800 shares of common stock upon the conversion of $ 29,800 of its convertible debt, at

a weighted average conversion rate of $ 1.00 .

On May 27, 2021, Company issued

an aggregate of 897,231 shares of common stock upon the conversion of $ 1,156,377 of its convertible debt, at a weighted average conversion

rate of $ 1.29 .

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

pursuant to which the

Company agreed to issue and sell to the Underwriter in an underwritten public offering 2,880,000

units consisting of one share of common stock and one

warrant, exercisable for one share of common stock at a public offering price of $ 5.00

per unit, (after giving effect to a 1-for-5 reverse

stock split, discussed above) for aggregate gross proceeds of approximately $ 14,400,000

before deducting underwriting discounts, commissions,

and other offering expenses (the “June Offering”).

The common stock and warrants were immediately separable and were issued

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

and “OSATW,” respectively.

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

to purchase an additional 432,000

shares of common stock and/or warrants to purchase

up to an aggregate of 432,000

shares of common stock, in any combination thereof,

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

Offering closed on June 2, 2021.In connection with closing of the June Offering, the Underwriter partially exercised its overallotment

option and purchased an additional 432,000

warrants at $ 0.01

per warrant for additional gross proceeds to

the Company of $ 4,320 .

On June 28, 2021, the Underwriter, upon the exercise in full of the balance of its over-allotment option, purchased 432,000

additional gross and net proceeds after

deducting underwriting discounts of $ 2,160,000 and $ 1,983,226 , respectively.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

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.

The 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.

June 10, 2021, the Company issued 1,000 shares of common stock, for the exercise of 1,000 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 5,000 .

July 6, 2021, the Company issued 78,500 shares of common stock, for the exercise of 78,500 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 392,500 .

July 8, 2021, the Company issued 425,000 shares of common stock, for the exercise of 425,000 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 2,125,000 .

July 12, 2021, the Company issued 2,000 shares of common stock, for the exercise of 2,000 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 10,000 .

July 13, 2021, the Company issued 59,853 shares of common stock, for the exercise of 59,853 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 299,265 .

July 14, 2021, the Company issued 278,555 shares of common stock, for the exercise of 278,555 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 1,392,775 .

July 15, 2021, the Company issued 5,000 shares of common stock in connection with the exercise of 5,000 options, for cash consideration

July 19, 2021, the Company issued 1,000 shares of common stock, for the exercise of 1,000 warrants, at an exercise price of $ 5.00 , for

cash consideration of $ 5,000 .

July 30, 2021, the Company issued 80,000 shares of common stock, for the exercise of 80,000 warrants, at an exercise price of $ 5.00 ,

for cash consideration of $ 400,000 .

September 3, 2021, the Company issued 10,000 shares of common stock in connection with restricted stock awards, with a fair market value

of $ 5.35 per share, from the date of the award.

September 14, 2021, the Company issued 40,000 shares of common stock in connection with restricted stock awards, with a fair market value

of $ 5.35 per share, from the date of the award.

September 22, 2021, the Company issued a total of 12,437

common shares for the exercise of 14,200

options through a cashless exercise using

options for the $ 1.00

exercise price and in connection with a 1,000

restricted stock award.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

October 21, 2021, the Company issued 10,000

shares of common stock in connection with restricted

stock awards, with a fair market value of $ 4.75

per share, from the date of the award, for stock-based

compensation of $ 47,500 .

December 21, 2021, the Company issued 563,500 shares of common stock in connection with restricted stock awards, with a fair market value

of $ 3.74 per share, from the date of the award for stock-based compensation of $ 2,107,490 .

December 28, 2021, the Company awarded at total of 15,000

restricted stock awards, at a fair market value

from the date of issuance.

The Company issued 10,393

shares of common stock, withholding 4,607

of the award for the payment of taxes, this resulted

in net stock-based compensation of $ 39,597 .

the year ended December 31, 2020

Company issued a total of 791,760 shares of common stock during the year ended December 31, 2020, as described below:

January 30, 2020, the Company issued an aggregate of 3,629 common stock upon the conversion of $ 1,815 of its convertible debt, at the

conversion rate of $ 0.50 per share.

January 31, 2020, the Company issued an aggregate of 3,629 common stock upon the conversion of $ 1,815 of its convertible debt, at the

conversion rate of $ 0.50 per share.

February 10, 2020, the Company issued an aggregate of 5,084 common stock upon the conversion of $ 2,542 of its convertible debt, at the

conversion rate of $ 0.50 per share.

February 11, 2020, the Company issued an aggregate of 4,716 common stock upon the conversion of $ 2,358 of its convertible debt, at the

conversion rate of $ 0.50 per share.

February 18, 2020, the Company issued an aggregate of 2,638 common stock upon the conversion of $ 1,319 of its convertible debt, at the

conversion rate of $ 0.50 per share.

February 19, 2020, the Company issued an aggregate of 894 common stock upon the conversion of $ 446 of its convertible debt, at the conversion

rate of $ 0.50 per share.

March 9, 2020, the Company issued an aggregate of 2,061 common stock upon the conversion of $ 1,031 of its convertible debt, at the conversion

rate of $ 0.50 per share.

April 17, 2020, the Company issued an aggregate of 1,409 common stock upon the conversion of $ 705 of its convertible debt, at the conversion

rate of $ 0.50 per share.

April 22, 2020, the Company issued an aggregate of 74 common stock upon the conversion of $ 37 of its convertible debt, at the conversion

rate of $ 0.50 per share.

June 22, 2020, the Company issued an aggregate of 2,687 common stock upon the conversion of $ 2,687 of its convertible debt, at the conversion

rate of $ 1.00 per share.

July 8, 2020, the Company issued an aggregate of 219 common stock upon the conversion of $ 219 of its convertible debt, at the conversion

rate of $ 1.00 per share.

July 16, 2020, the Company’s Board of Directors approved, and the Company entered into a 12-month consulting agreement (“Consulting

Agreement”) with an unrelated third-party for capital raising advisory services and business growth and development services, with

the term renewable upon mutual consent of the parties.

Upon signing of the Consulting Agreement, the Company agreed to issue 4,000

restricted shares of its common stock to the

consultant (the “Consulting Shares”), 1,000

additional restricted shares of common stock

to be issued quarterly until the consultant may receive cash compensation for its services, which will be determined, upon completion

of certain milestones, by the Company’s CEO.

On July 22, 2020, the Company issued 4,000

common stock valued at $ 50,200

and on November 13, 2020, the Company issued

common stock valued at $ 11,250 .

July 23, 2020, the Company issued an aggregate of 468 common stock upon the conversion of $ 468 of its convertible debt, at the conversion

rate of $ 1.00 per share.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

August 25, 2020, David Phipps exercised 80,000 options via a cashless exercise.

Additionally, on August 25, 2020, Hector Delgado and

two employees exercised 22,000 options through a cashless exercise.

The Company withheld newly acquired shares pursuant to the exercise

of the Option.

The amount of common stock issued is calculated by using [Number of Options Exercising] minus [Exercise Price]

* [Number of Options Exercising] divided by [Prior Close OSAT Market Price].

As a result of the exercise 85,960 shares

of common stock were issued.

August 25, 2020, the Company issued 1,000 common stock for consulting services valued at $ 12,550 .

August 26, 2020, the Company issued an aggregate of 117,200 common stock upon the conversion of $ 117,200 of its convertible debt, at

the conversion rate of $ 1.00 per share.

September 1, 2020, the Company issued an aggregate of 38,219 common stock upon the conversion of $ 38,219 of its convertible debt, at

the conversion rate of $ 1.00 per share.

September 2, 2020, the Company issued an aggregate of 4,351 common stock upon the conversion of $ 4,351 of its convertible debt, at the

conversion rate of $ 1.00 per share.

September 8, 2020, the Company issued an aggregate of 33,600 common stock upon the conversion of $ 33,600 of its convertible debt, at

the conversion rate of $ 1.00 per share.

September 10, 2020, the Company issued an aggregate of 114,457 common stock upon the conversion of $ 114,457 of its convertible debt,

at the conversion rate of $ 1.00 per share.

September 11, 2020, the Company issued an aggregate of 15,000 common stock upon the conversion of $ 15,000 of its convertible debt, at

the conversion rate of $ 1.00 per share.

September 14, 2020, the Company issued an aggregate of 66,294 common stock upon the conversion of $ 66,294 of its convertible debt, at

the conversion rate of $ 1.00 per share.

September 15, 2020, the Company issued an aggregate of 13,529 common stock upon the conversion of $ 13,529 of its convertible debt, at

the conversion rate of $ 1.00 per share.

September 16, 2020, the Company issued an aggregate of 30,275 common stock upon the conversion of $ 30,275 of its convertible debt, at

the conversion rate of $ 1.00 per share.

September 17, 2020, the Company issued an aggregate of 33,197 common stock upon the conversion of $ 33,197 of its convertible debt, at

the conversion rate of $ 1.00 per share.

September 21, 2020, the Company issued an aggregate of 5,780 common stock upon the conversion of $ 5,780 of its convertible debt, at the

conversion rate of $ 1.00 per share.

September 22, 2020, the Company issued an aggregate of 55,005 common stock upon the conversion of $ 55,005 of its convertible debt, at

the conversion rate of $ 1.00 per share.

September 30, 2020, the Company issued an aggregate of 43,240 common stock upon the conversion of $ 43,240 of its convertible debt, at

the conversion rate of $ 1.00 per share.

November 3, 2020, the Company issued an aggregate of 6,061 common stock upon the conversion of $ 6,061 of its convertible debt, at the

conversion rate of $ 1.00 per share.

November 5, 2020, the Company issued an aggregate of 25,848 common stock upon the conversion of $ 25,848 of its convertible debt, at the

conversion rate of $ 1.00 per share.

November 6, 2020, the Company issued an aggregate of 11,340 common stock upon the conversion of $ 11,340 of its convertible debt, at the

conversion rate of $ 1.00 per share.

November 11, 2020, the Company issued an aggregate of 20,000 common stock upon the conversion of $ 20,000 of its convertible debt, at

the conversion rate of $ 1.00 per share.

November 13, 2020, the Company issued an aggregate of 38,894 common stock upon the conversion of $ 38,894 of its convertible debt, at

the conversion rate of $ 1.00 per share.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

Issued Outside of Equity Incentive Plan

August 24, 2021, the Company issued to Douglas Ellenoff, Chief Business Development Strategist, 300,000 options which are fully vested,

to purchase its common stock.

The Company will issue an additional 150,000 options per year for the next three years which will be fully

vested at the end of each year, as long as Mr.

Ellenoff remains employed by the Company.

During the next three years, Mr.

Ellenoff will

be eligible to receive an additional 250,000 per year on each of the first three anniversaries of the commencement of his employment

if during each such year Mr.

Ellenoff introduces the Company to twelve (12) or more potential Business Transactions (as defined in the

Ellenoff Agreement and which transactions need not be consummated);

provided that the Company’s Chief Executive Officer may, in

his sole discretion, waive the vesting requirement in any given year.

Such options have an exercise price of $5.35 per share and will

terminate 5 years after they vest .

on August 24, 2021, the Company granted 25,000 options to Paul R Thomson, its Executive Vice President and current Chief Financial Officer.

The options were issued outside of the Company’s 2020 Equity Incentive Plan and are not governed by the 2020 Plan.

have an exercise price of $ 5.35 per share, vest immediately, and have a term of five years.

325,000 options granted were valued on the grant date at approximately $ 3.24 per option or a total of $ 1,053,064 using a Black-Scholes

option pricing model with the following assumptions:

stock price of $ 5.37 per share (based on the closing price of the Company’s

common stock of the date of grant), volatility of 75.25 %, expected term of 5 years, and a risk-free interest rate of 0.28 %.

October 8, 2021, the Company granted 25,000 options to Andrew Cohen, its Senior Vice President of Operations.

The options were issued

outside of the Company’s Equity Incentive Plans and are not governed by any Plans.

The options have an exercise price of $ 5.35

per share, vest immediately, and have a term of five years .

25,000 options granted were valued on the grant date at approximately $ 2.90 per option or a total of $ 72,350 using a Black-Scholes option

pricing model with the following assumptions:

stock price of $ 4.75 per share (based on the closing price of the Company’s common

stock of the date of grant), volatility of 80 %, expected term of 5 years , and a risk-free interest rate of 0.28 %.

Incentive Plan

June 14, 2018, our Board of Directors approved the 2018 Incentive Plan (the “2018 Plan”).

The purpose of the 2018 Plan is

to provide a means for the Company to continue to attract, motivate and retain management, key employees, consultants and other independent

contractors, and to provide these individuals with greater incentive for their service to the Company by linking their interests in the

Company’s success with those of the Company and its shareholders.

An award may also be granted to any consultant, agent, advisor

or independent contractor for bona fide services rendered to the Company or any Related Company (as defined in the 2018 Plan) that;

not in connection with the offer and sale of the Company’s securities in a capital raising transaction, and do not directly or

indirectly promote or maintain a market for the Company’s securities.

The 2018 Plan is administered by the Board its Compensation

Committee and may grant Options designated as Incentive Stock Options or Nonqualified Stock Options.

The 2018 Plan provides that up to

a maximum of 13,333 shares of the Company’s common stock (subject to adjustment) are available for issuance under the 2018 Plan.

Subject to earlier termination in accordance with the terms of the 2018 Plan and the instrument evidencing the option, the maximum term

of an incentive stock option shall not exceed ten years, and in the case of an incentive stock option granted to a Ten Percent Stockholder

(as defined in the 2018 Plan), shall not exceed five years.

Any portion of an option that is not vested and exercisable on the date of

a plan participant’s Termination of Service (as defined in the 2018 Plan) shall expire on such date.

In the event of a Change in

Control (as defined in the 2018 Plan);

all outstanding awards, other than performance shares and performance units, shall become fully

and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, immediately

prior to the Change in Control and shall terminate at the effective time of the Change in Control;

provided, however, that with respect

to a Change in Control that is a Company Transaction (as defined in the 2018 Plan), such awards shall become fully and immediately exercisable,

and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, only if and to the extent such awards are

not converted, assumed or replaced by the Successor Company (as defined in the 2018 Plan.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - STOCKHOLDERS’ EQUITY (CONTINUED)

and Restated 2020 Equity Incentive Plan

August 21, 2020, the Company’s Board of Directors approved and adopted the Company’s 2020 Equity Incentive Plan (the “2020

Plan”) in order to provide a means for the Company to continue to attract, motivate and retain management, key employees, directors

and consultants.

On December 31, 2020, the Company’s Board of Directors approved and adopted an amendment that increased the number

of shares available for issuance under the 2020 Plan from 450,000 shares to 800,000 shares of the Company’s common stock.

10, 2021, the Company’s Board of Directors further amended the 2020 Plan and adopted and approved an Amended and Restated 2020

Equity Incentive Plan (the “A&R 2020 Plan”), in order to, among other things:

(i) clarify that the exercise price of

stock options will be set at “Fair Market Value,” and (ii) make conforming revision to reflect the 1-for-5 reverse split

that was effective on May 28, 2021.

The A&R 2020 Plan was approved by the Company’s stockholders on December 16, 2021, at the

Company’s 2021 Annual Meeting of Stockholders.

A&R 2020 Plan provides for discretionary awards of, among others, stock options, stock awards, stock unit awards and stock appreciation

rights to participants.

Each award made under the A&R 2020 Plan will be evidenced by a written award agreement specifying the terms

and conditions of the award as determined by the Committee in its sole discretion, consistent with the terms of the A&R 2020 Plan.

All employees, directors, and consultants of the Company and its subsidiaries are eligible to receive awards under the A&R 2020 Plan.

A&R 2020 Plan is administered by the “Committee” which is defined in the A&R 2020 Plan as the Compensation Committee

of the Board or such other committee as may be designated by the Board from time to time to administer the Plan, or, if no such committee

has been designated at the time of any grants, it shall mean the Board.

number of shares of common stock that may be issued under the A&R 2020 Plan is 800,000 .