What changed in this filing

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Item 1. Financial Statements

2023-05-15 compared with 2022-11-14 · 465 added, 1667 removed, 218 unchanged (91% of the section changed)

Financial Statements

unaudited condensed consolidated financial statements of NextPlat Corp, F/K/A/ Orbsat Corp, (“NextPlat,” the

“Company,” “we,” or “our”), for the three and nine months ended September 30, 2022 and for

comparable periods in the prior year are included below.

The financial statements should be read in conjunction with the notes to

financial statements that follow.

unaudited condensed consolidated financial statements of NextPlat Corp, (“NextPlat,” the “Company,”

“we,” or “our”), for the three months ended March 31, 2023 and for comparable periods in the prior year are

included below.

The financial statements should be read in conjunction with the notes to financial statements that

CORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS AS OF

September 30, 2022

December 31, 2021

CONDENSED CONSOLIDATED

BALANCE SHEETS

Current Assets

Accounts receivable, net

Accounts receivable

Unbilled revenue

1 unchanged sentence

Prepaid expenses – current portion

Equity method investment

Other current assets

Total Current Assets

Property and equipment, net

Right of use asset

Right of use assets, net

Intangible assets, net

Prepaid expenses – long term portion

Equity method investment

Prepaid expenses – long term portion

Total Other Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

Accounts payable and accrued liabilities

Accounts payable and accrued expenses

Contract liabilities

1 unchanged sentence

Due to related party

Lease liabilities - current

Provision for income taxes

Stock subscription payable

Operating lease liabilities - current

Income taxes payable

Liabilities from discontinued operations

1 unchanged sentence

Long Term Liabilities:

Note payable coronavirus loans– long term

Lease liabilities - long term

Notes payable Coronavirus – long term

Operating lease liabilities – long term

Total Liabilities

Commitments and Contingencies

Stockholders’ Equity

2 unchanged sentences

Common stock ($ 0.0001 par value;

50,000,000 shares authorized, 9,649,096 shares issued and outstanding as of September 30, 2022 and 7,053,146 outstanding at December 31, 2021

50,000,000 shares authorized, 14,441,025 and 14,402,025 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively)

Additional paid-in capital

2 unchanged sentences

( 31,146,804 )

Accumulated other comprehensive income (loss)

Accumulated other comprehensive loss

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

the accompanying notes to the unaudited condensed consolidated financial statements.

accompanying notes to condensed consolidated financial statements.

CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

COMPREHENSIVE LOSS

Three Months Ended

September 30, 2022

Three Months Ended

September 30, 2021

Nine months Ended

September 30, 2022

Nine months Ended

September 30, 2021

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Cost of sales

5 unchanged sentences

Total operating expenses

Loss before other expenses and income taxes

( 2,164,939 )

( 2,236,846 )

( 4,532,803 )

Loss before other (income) expense

( 1,238,462 )

Other (income) expense

Gain on debt extinguishment

Interest earned

Interest expense

Interest earned

Foreign currency exchange rate variance

Total other (income) expense

Net loss before income tax expense

$ ( 2,258,840 )

$ ( 2,305,549 )

$ ( 4,764,784 )

$ ( 4,567,085 )

Provision for income taxes

Net loss before equity net loss of affiliate

( 2,258,840 )

( 2,305,549 )

( 4,764,784 )

( 4,567,085 )

Equity in net losses of affiliate

( 3,454,436 )

( 5,713,276 )

( 2,305,549 )

( 8,219,220 )

Loss before equity method investment

( 1,155,066 )

Comprehensive (Loss) Income:

Equity in net loss of affiliate

$ ( 1,187,230 )

$ ( 850,083 )

Comprehensive loss:

$ ( 1,187,230 )

4 unchanged sentences

$ ( 865,413 )

$ ( 8,306,973 )

$ ( 4,524,235 )

NET LOSS INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

Weighted number of common shares outstanding – basic & diluted

Basic and diluted net loss per share

the accompanying notes to the unaudited condensed consolidated financial statements.

the accompanying notes to condensed consolidated financial statements.

CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

the Nine months Ended September 30, 2022

Comprehensive

Stockholders’

December 31, 2021

$ ( 21,986,215 )

of common related to offering

of common related to restricted stock award

based compensation in relation to options granted

Comprehensive

( 8,219,220 )

September 30, 2022

$ ( 30,205,435 )

the Nine months Ended September 30, 2021

the Three Months Ended March 31, 2023 (Unaudited)

$0.0001 Par Value

Comprehensive

Stockholders’

December 31, 2020

$ ( 13,878,553 )

common stock from convertible debt

of common related to offering

of common for over-allotment

of warrants for over-allotment

of common stock from exercise of warrant

of common stock for exercise of options

based compensation in connection with options granted

based compensation in connection with restricted stock awards

of common stock for services

conversion feature of convertible debt

Comprehensive

Balance, December 31, 2022

$ ( 31,146,804 )

Issuance of common stock related to restricted stock award

Comprehensive loss

( 1,187,230 )

September 30, 2021

Balance, March 31, 2023

$ ( 32,334,034 )

the Three Months Ended September 30, 2022

the Three Months Ended March 31, 2022 (Unaudited)

$0.0001 Par Value

Comprehensive

Stockholders’

June 30, 2022

Balance, December 31, 2021

$ ( 21,986,215 )

based compensation in relation to restricted stock award

based compensation in relation to options granted

Comprehensive

$ ( 21,986,215 )

Issuance of common stock related to offering

Issuance of common stock related to restricted stock award

Comprehensive loss

Balance, March 31, 2022

$ ( 22,836,298 )

September 30, 2022

$ ( 22,836,298 )

the Three Months Ended September 30, 2021

$0.0001 Par Value

accompanying notes to condensed consolidated financial statements.

CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

the Three Months Ended March 31, 2023 (Unaudited)

Comprehensive

Stockholders’

June 30, 2021

Balance, December 31, 2022

Issuance of common stock related to restricted stock award

Comprehensive loss

( 1,187,230 )

of common stock related to exercise of options

based compensation for restricted stock awards

based compensation for options granted

of common stock from exercise warrant

Comprehensive

Balance, March 31, 2023

the Three Months Ended March 31, 2022 (Unaudited)

Comprehensive

Stockholders’

Income (Loss)

( 2,305,549 )

September 30, 2021

$ ( 18,445,638 )

accompanying notes to unaudited condensed consolidated financial statements.

Balance, December 31, 2021

Issuance of common stock related to offering

Issuance of common stock related to restricted stock award

Comprehensive loss

Balance, March 31, 2022

accompanying notes to condensed consolidated financial statements.

CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THE NINE MONTHS ENDED

September 30, 2022

September 30, 2021

THE THREE MONTHS ENDED

CASH FLOWS FROM OPERATING ACTIVITIES:

4 unchanged sentences

Amortization of intangible asset

Amortization of convertible debt, net

Amortization of right to use

Stock based compensation in relation to restricted stock awards

Fair value of options granted

Stock issued for services

Share of loss from equity method

Gain on debt extinguishment

Amortization of right of use assets

Share of loss from equity method investment

Stock-based compensation

Change in operating assets and liabilities:

1 unchanged sentence

Unbilled revenue

VAT receivable

Prepaid expense

Other current assets

Accounts payable and accrued liabilities

VAT receivable

Accounts payable and accrued expenses

Lease liabilities

Provision for income taxes

Income taxes payable

Contract liabilities

1 unchanged sentence

( 2,067,007 )

( 2,997,644 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

Purchase of equity method investment

( 7,000,000 )

Net cash used in investing activities

( 7,471,118 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from convertible note payable

Proceeds from (repayments to) note payable, related party, net

Proceeds from exercise of options

Proceeds from common stock offering

Proceeds from warrant offering

Repayments to note payable Coronavirus loans

Proceeds from exercise of warrant

Repayment of note payable

Net cash provided by financing activities

Net cash (used in) provided by financing activities

Effect of exchange rate on cash

Net increase (decrease) in cash

Net (decrease) increase in cash

( 2,171,264 )

4 unchanged sentences

Non-cash adjustments during the period for

Beneficial conversion feature on convertible debt

Recognition of operating lease liability

Conversion of convertible debt into common shares

the accompanying notes to the unaudited condensed consolidated financial statements.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles

generally accepted in the United States for interim financial statements and do not include all the information and footnotes required

by accounting principles generally accepted in the United States for complete financial statements.

The information furnished reflects

all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the financial

statements not misleading.

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

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

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

audited by an independent registered public accounting firm.

The accounting policies and procedures employed in the preparation of these

condensed consolidated financial statements have been derived from the audited financial statements of the “Company” for

the year ended December 31, 2021, which are contained in the Company’s annual report on Form 10-K as filed with the Securities

and Exchange Commission (the “SEC”) on March 31, 2022.

The consolidated balance sheet as of December 31, 2021 was derived

from those financial statements.

of Presentation and Principles of Consolidation

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

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

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

All material intercompany balances and transactions have been

eliminated in consolidation.

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

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

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

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

Historically, the business of NextPlat

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

in Online Storefronts and E-Commerce Platforms below, the Company operates two main e-commerce websites as well as 25 third-party e-commerce

storefronts such as Alibaba, Amazon and Walmart.

These e-commerce venues form an effective global network serving thousands of consumers,

enterprises, and governments.

NextPlat has announced its intention to broaden its e-commerce platform and is implementing comprehensive

systems upgrade to support this initiative.

The Company has also begun the design and development of a next generation platform for digital

assets built for Web3 (an internet service built using decentralized blockchains).

This new platform (“NextPlat Digital”)

is currently in the design and development phase and will enable the use of a range of digital assets, such as non-fungible tokens (“NFTs”),

in e-commerce and in community-building activities.

Storefronts and E-Commerce Platforms

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

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

These websites

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

Over the long term, we plan to

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

substantial further demand for our products.

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

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

We currently operate 25 storefronts across

various countries in 5 continents.

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

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

We currently have more than 9,000 product

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

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

The products include handheld satellite phones, personal

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

Our Amazon Marketplaces represented

approximately 52.3 %

of the Company’s revenues during the nine months ended September 30, 2022 and 2021, respectively.

For the years ended December

31, 2021 and 2020, Amazon online marketplaces represented approximately 63.6 %

of total sales, respectively.

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

the foreseeable future.

Our e-commerce storefronts enable us to attract a significantly diversified level of sales from all over the

world, ensuring we are not overly reliant on any single market or sector for our sales revenue.

Furthermore, many products we sell require

subscription-based services which allow us to increase our recurring revenue airtime sales.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Communications

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

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

and Internet of Things (IoT) connectivity services.

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

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

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

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

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

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

conflicts and natural or man-made disasters.

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

Low Earth Orbit satellite network.

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

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

simplex data service.

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

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

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

shipments, livestock, and monitoring unattended remote assets.

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

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

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

Higher margin recurring service revenue from the sale

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

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

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

our subsidiaries, U.S.

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

based Global Telesat Communications Limited

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

in 16 countries across 5 continents.

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

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

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

infrastructure.

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

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

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

may not be available.

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

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

infrastructure.

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

communicate via voice and data applications.

Common stock issued for stock subscription payable

the accompanying notes to condensed consolidated financial statements.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Our distress beacons enable

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

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

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

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

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

along with many other types of assets.

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

one of the most modern satellite networks in the world.

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

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

tracking device to monitor remote assets.

and Tracking Portal

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

to access it.

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

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

Asset location reports including position, speed, altitude,

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

through GTCTrack.

Organizational

Company was originally incorporated in 1997 in Florida.

On April 21, 2010, the Company merged with and into a wholly-owned subsidiary

for the purpose of changing its state of incorporation to Delaware, effecting a 2:1 forward split of its common stock, and changing its

name to EClips Media Technologies, Inc.

On April 25, 2011, the Company changed its name to Silver Horn Mining Ltd.

pursuant to a merger

with a wholly owned subsidiary.

Telesat Communications Limited (“GTC”) was formed under the laws of England and Wales in 2008.

On February 19, 2015, we entered

into a share exchange agreement with GTC and all of the holders of the outstanding equity of GTC pursuant to which GTC became a wholly

owned subsidiary of ours.

March 28, 2014, we merged with a newly-formed wholly-owned subsidiary of ours solely for the purpose of changing our state of incorporation

to Nevada from Delaware, effecting a 1:150 reverse split of our common stock, and changing our name to Great West Resources, Inc.

connection with the plans to enter into the business of potash mining and exploration.

During late 2014, we abandoned our efforts to

enter the potash business.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unless the context requires otherwise,

references to the “Company”, “we”, “us”, “our”, “our Company”, or “our

business” refer to Nextplat Corp and its subsidiaries.

Organization & Nature of Operations .

NextPlat Corp, a Nevada corporation (the “Company”, “NextPlat”, “we”), formerly Orbsat Corp was incorporated

The Company operates two main e-commerce websites as well as 25 third-party e-commerce storefronts on 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 a comprehensive system upgrade to support

this initiative.

The Company has also begun the design and development of a next generation platform for digital assets built for Web3

(an internet service built using decentralized blockchains).

This new platform (“NextPlat Digital”) is currently in the design

and development phase and will enable the use of a range of digital assets, such as non-fungible tokens (“NFTs”), in e-commerce

and in community-building activities.

In addition, we provide a comprehensive array of Satellite Industry communication services and related

equipment sales.

Our wholly-owned

subsidiary, Global Telesat Communications Limited

(“GTC”), was formed under the laws of England and Wales in 2008.

On February 19, 2015, we entered into a share exchange

agreement with GTC and all of the holders of the outstanding equity of GTC pursuant to which we acquired all of the outstanding

equity in GTC.

wholly-owned subsidiary, Orbital Satcom Corp.

(“Orbital Satcom”), a Nevada corporation, was formed on November 14, 2014.

January 22, 2015, we changed our name to “Orbital Tracking Corp” from “Great West Resources, Inc.” pursuant to

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

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

As a result of the reverse split,

our common stock now has the CUSIP number:

All share and per share, information in the accompanying consolidated financial

statements and footnotes has been retroactively restated to reflect these reverse splits.

on August 19, 2019, we changed our name to “Orbsat Corp” from “Orbital Tracking Corp.” pursuant to a merger with

a newly formed wholly owned subsidiary.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 subsequently approved a 1-for-5 reverse stock split.

The Company filed a Certificate of Change to its Amended and

Restated Articles of Incorporation to effect a reverse stock split of its issued and outstanding common stock, at a ratio of 1-for-5 .

The effective time of the reverse stock split was 12:01 a.m.

ET on May 28, 2021.

The Company’s common stock began trading on a

split-adjusted basis commencing upon market open on May 28, 2021.

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

The warrants were assigned the CUSIP number, 68557F 118.

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

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

January 18, 2022, the Company filed a Certificate of Amendment of the Amended and Restated Articles of Incorporation of the Company with

the Secretary of State of the State of Nevada in order to change the Company’s corporate name from Orbsat Corp to NextPlat Corp.

This name change was effective as of January 21, 2022.

The name change was approved by the Company’s stockholders at the 2021 annual

meeting of stockholders held on December 16, 2021.

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

At present, NextPlat

B.V., has no active operations.

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 million (the “Unit Purchase”).

Each Unit consists of one share of Series B Convertible

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

Stock (“RXMD Warrants”).

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

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

In addition, the Series B Preferred

Stock has a liquidation and dividend preference.

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

in part, and contain cashless exercise provisions.

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

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

Fernandez, and our board member, Rodney

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

Fernandez appointed to serve as Chairman of

Progressive Care’s Board of Directors and Mr.

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

of Directors.

On November 11, 2022, the Progressive Care board of directors elected Mr.

Fernandez to serve as the Chief Executive Officer of Progressive Care.

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

and Trading, L.P.

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

(the “Note”).

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

$ 2.79 million.

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

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

connection with the Note Purchase, NextPlat, Messrs.

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

Agreement with Progressive Care.

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

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

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

per share of Common Stock.

Pursuant to the Debt Modification Agreement, NextPlat, Messrs.

Fernandez and Barreto and the other purchasers

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

The Debt Modification Agreement also provides

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

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

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

In consideration of the concessions in the Debt

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

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

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

notes thereto assumes a 1-for-5 reverse stock split of Company’s outstanding shares of common stock effective May 28, 2021 and

unless otherwise indicated, all such amounts and corresponding conversion price or exercise price data set forth in this Quarterly

Report on Form 10-Q have been adjusted to give effect to such assumed reverse stock split.

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.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years then ended.

Actual results may differ significantly from those estimates.

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

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

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.

Company 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 ,

($ 11,884,437 at September 30, 2022), are

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.

receivable and allowance for doubtful accounts

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

existing accounts receivable.

The Company periodically reviews its accounts receivable to determine whether an allowance is necessary

based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt.

balances deemed to be uncollectible are offset against sales and relieved from accounts receivable, after all means of collection have

been exhausted and the potential for recovery is considered remote.

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

for doubtful accounts.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Basis of Presentation and Principles of

Consolidation

The accompanying

Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally

accepted in the United States (“GAAP”), consistent in all material respects with those applied in the 2022 Form 10-K,

for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”).

Accordingly, they do not include all information and footnotes normally included in annual consolidated financial statements and

should be read in conjunction with the consolidated financial statements and notes thereto included in the 2022 Form 10-K.

opinion of management, the Condensed Consolidated Financial Statements contain all adjustments (consisting principally of normal

recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of comprehensive

loss, statements of stockholders’ equity and statements of cash flows for such interim periods presented.

Additionally,

operating results for interim periods are not necessarily indicative of the results that can be expected for a full year.

These Condensed 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.

Use of Estimates

In preparing the Condensed

Consolidated Financial Statements, management is required to make estimates and assumptions that affect the reported amounts of assets

and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years then ended.

Actual results

may differ significantly from those estimates.

Significant estimates made by management include, but are not limited to, 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 and corporate income taxes.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

The Company assesses the valuation

of its inventories and reduces the carrying value of those inventories that are obsolete or in excess of the Company’s forecasted

usage to their estimated net realizable value.

The Company estimates the net realizable value of such inventories based on analysis and

assumptions including, but not limited to, historical usage, expected future demand and market requirements.

A change to the carrying

value of inventories is recorded to cost of goods sold.

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

Prepaid expenses include prepayments

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

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

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 condensed 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 condensed 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 investees as of September 30, 2022 and determined that the

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

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Summary of Significant Accounting Policies

The significant accounting policies

of the Company were described in Note 1.

to the Audited Consolidated Financial Statements included in the Company’s Form 10-K for

the fiscal year ended December 31, 2022.

There have been no material changes to the Company’s significant accounting policies for

the three months ended March 31, 2023.

places its cash with high credit quality financial institutions.

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 , approximately $ 16.2 million, are unsecured.

In April 2023, the Company has entered into a deposit placement agreement for Insured Cash Sweep Service (“ICS”).

This service is a secure, and convenient way to access FDIC protection on large deposits, earn a return, and enjoy flexibility.

will reduce the Company’s risk as it relates to uninsured FDIC amounts in excess of $ 250,000 .

Currency Translation

Company’s reporting currency is U.S.

The accounts of one of the Company’s subsidiaries, GTCL, is maintained using

The accounts of one of the Company’s subsidiaries, GTC, is maintained using

the appropriate local currency, Great British Pound, as the functional currency.

7 unchanged sentences

relevant translation rates are as follows:

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

GBP, quarterly

average rate at 1.176596 US$:

GBP and yearly average rate at 1.258384444 US$:

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

2021 closing rate at 1.342642 US$:

GBP, quarterly average rate at 1.3784972 US$:

GBP and yearly average rate at 1.3853499 US$:

the year ended 2021 closing rate at 1.353372 US$:

for the three months ended March 31, 2023, closing rate at 1.23 US$:

GBP, quarterly average

rate at 1.21 US$:

GBP, for the three months ended March 31, 2022, closing rate at 1.31 US$:

GBP, quarterly average rate at 1.34

GBP, for the year ended 2022 closing rate at 1.21 US$:

GBP, yearly average rate at 1.24 US$:

Recognition and Unearned Revenue

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

Equipment sales revenue

is recognized when the equipment is delivered to and accepted by the customer.

Only equipment sales are subject to warranty.

Historically,

the Company has not incurred significant expenses for warranties.

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

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

The Company also records as contract liabilities, certain

annual plans for airtime, which are paid in advance.

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

Unbilled revenue

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

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

Company’s assessment of which revenue recognition guidance is appropriate to account for each element in an arrangement can involve

significant judgment.

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

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

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

To determine revenue recognition for arrangements that the Company

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

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

(ii) identify

the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance

obligations in the contract;

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

The five-step model is applied

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

to the customer.

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

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

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

when (or as) the performance obligation is satisfied.

accordance with ASU No.

2016-12, Revenue from Contracts with Customers (Topic 606):

Narrow-Scope Improvements and Practical Expedient ,

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

(2) permit an entity to exclude

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

(3) specify that the measurement

date for noncash consideration is contract inception;

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

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

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

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

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

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

the period of adoption.

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

within those fiscal years.

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

Based on the terms and conditions of the product arrangements, the Company believes that its products and services can be accounted for

separately as its products and services have value to the Company’s customers on a stand-alone basis.

When a transaction involves

more than one product or service, revenue is allocated to each deliverable based on its relative fair value;

otherwise, revenue is recognized

as products are delivered or as services are provided over the term of the customer contract.

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

At September 30, 2022

and December 31, 2021, we had contract liabilities of approximately $ 35,009 and $ 36,765 , respectively.

of Product Sales and Services

of sales consists primarily of materials, airtime and overhead costs incurred internally and amounts incurred to contract manufacturers

to produce our products, airtime and other implementation costs incurred to install our products and train customer personnel, and customer

service and third-party original equipment manufacturer costs to provide continuing support to our customers.

There are certain costs

which are deferred and recorded as prepaids, until such revenue is recognized.

Refer to revenue recognition above as to what constitutes

deferred revenue.

and handling costs are included as a component of costs of product sales in the Company’s consolidated statements of operations

because the Company includes in revenue the related costs that the Company bills its customers.

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

These assets are amortized over 10 years.

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

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

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

and equipment

and equipment are carried at historical cost less accumulated depreciation.

Depreciation is based on the estimated service lives of the

depreciable assets and is calculated using the straight-line method.

Expenditures that increase the value or productive capacity of assets

are capitalized.

Fully depreciated assets are retained in the property and equipment, and accumulated depreciation accounts until they

are removed from service.

When property and equipment are retired, sold or otherwise disposed of, the asset’s carrying amount and

related accumulated depreciation are removed from the accounts and any gain or loss is included in operations.

Repairs and maintenance

are expensed as incurred.

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

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

SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT

Office furniture and fixtures

Computer equipment

Rental equipment

Leasehold improvements

Website development

of long-lived assets

Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the

assets may not be fully recoverable, or at least annually.

The Company recognizes an impairment loss when the sum of expected undiscounted

future cash flows is less than the carrying amount of the asset.

The amount of impairment is measured as the difference between the asset’s

estimated fair value and its book value.

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

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

for Derivative Instruments

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

These derivatives, including embedded derivatives in the Company’s

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

Fair values for exchange traded

securities and derivatives are based on quoted market prices.

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

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

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

in accordance with the accounting guidance.

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

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

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

At March 31, 2023 and

December 31, 2022, we had contract liabilities of approximately $ 34,000 and $ 36,000 , respectively.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Based Compensation

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

consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments

over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period).

The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date

fair value of the award.

Company records stock-based payments made to non-employees in accordance with Accounting Standards Update (“ASU”) 2018-07, Compensation-Stock

Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting, which aligns accounting for share-based

payments issued to non-employees to that of employees under the existing guidance of Topic 718, with certain exceptions.

Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”)

which requires, among other things, an asset and liability approach to calculating deferred income taxes.

The asset and liability approach

require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between

the carrying amounts and the tax bases of assets and liabilities.

A valuation allowance is provided to offset any net deferred tax assets

for which management believes it is more likely than not that the net deferred asset will not be realized.

Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions.

When tax returns are filed, there

may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained.

In accordance

with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which,

based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination,

including the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset or aggregated with other positions.

positions that meet the more likely than not recognition threshold is measured at the largest amount of tax benefit that is more than

50 percent likely of being realized upon settlement with the applicable taxing authority .

The portion of the benefit associated with

tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits

in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon

Company believes its tax positions are all more likely than not to be upheld upon examination.

As such, the Company has not recorded

a liability for uncertain tax benefits.

Company has adopted ASC 740-10-25, “Definition of Settlement,” which provides guidance on how an entity should determine

whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a

tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished.

For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position

is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations

remains open.

The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities,

generally for three years after they are filed.

January 1, 2019, the Company accounts for its leases under ASC 842, Leases .

Under this guidance, arrangements meeting the definition

of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right of use

asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the

Company’s incremental borrowing rate.

Lease liabilities are increased by interest and reduced by payments each period, and the

right of use asset is amortized over the lease term.

For operating leases, interest on the lease liability and the amortization of the

right of use asset result in straight-line rent expense over the lease term.

For finance leases, interest on the lease liability and

the amortization of the right of use asset results in front-loaded expense over the lease term.

Variable lease expenses are recorded

when incurred.

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.

September 30, 2022 and December 31, 2021, the Company had aggregated current and long-term operating lease liabilities of $ 863,294

and $ 19,763 ,

respectively, and right of use assets of $ 865,115

and $ 22,643 ,

respectively.

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

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In June 2016, the

Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments

– Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which

introduces an impairment model based on expected, rather than incurred, losses.

Additionally, it requires expanded disclosures

regarding (a) credit risk inherent in a portfolio and how management monitors the portfolio’s credit quality;

management’s estimate of expected credit losses;

and (c) changes in estimates of expected credit losses that have taken place

during the period.

In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial

Instruments – Credit Losses.” This ASU clarifies receivables from operating leases are accounted for using the lease

guidance and not as financial instruments.

In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic

326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.”

This ASU clarifies various scoping and other issues arising from ASU 2016-13.

In March 2020, the FASB issued ASU 2020-03,

“Codification Improvements to Financial Instruments.” This ASU improves the Codification and amends the interaction of

Topic 842 and Topic 326.

ASU 2016-13 and related amendments are effective for fiscal years beginning after December 15, 2022, with

early adoption permitted.

The Company adopted this guidance effective January 1, 2023 and the adoption had no material impact on our

condensed consolidated financial statements and related disclosures.

On an ongoing basis, the Company will contemplate

forward-looking economic conditions in recording lifetime expected credit losses for the Company’s financial assets measured

at cost, such as the Company’s trade receivables.

Other 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 condensed 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

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

and Development

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

and Development (“ASC 730-10”).

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

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

Third-party research and development costs are expensed

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

Company-sponsored research and development costs

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

For the nine months ended September 30, 2022 and the

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

per Common Share

income (loss) per common share is calculated in accordance with ASC Topic 260:

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Earnings (Loss) per Share

income (loss) per common share is calculated in accordance with Accounting Standards Codification (“ASC”) Topic 260:

Earnings per Share (“ASC 260”).

(loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during

The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average

shares outstanding as they would be anti-dilutive.

In periods where the Company has a net loss, all dilutive securities are excluded.

following are dilutive common stock equivalents during the year ended:

SCHEDULE OF DILUTIVE COMMON STOCK EQUIVALENTS

September 30, 2022

September 30, 2021

Stock Options

Stock Warrants

Party Transactions

party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls,

is controlled by, or is under common control with the Company.

Related parties also include principal owners of the Company, its management,

members of the immediate families of principal owners of the Company and its management and other parties with which the Company may

deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of

the transacting parties might be prevented from fully pursuing its own separate interests.

A party which can significantly influence

the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties

and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing

its own separate interests is also a related party, (see Note 12).

Accounting Pronouncements

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Pronouncements Recently Adopted

May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic

470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity

(Subtopic 815-40).

ASU 2021-04 clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding

equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.

provides guidance to clarify whether an issuer should account for a modification or an exchange of a freestanding equity-classified written

call option that remains equity classified after modification or exchange as (1) an adjustment to equity and, if so, the related earnings

per share effects, if any, or (2) an expense and, if so, the manner and pattern of recognition.

ASU 2021-04 is effective for annual beginning

after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted, including adoption in an interim

The Company is currently evaluating the impact that this standard will have on its consolidated financial statements.

October 2021, the FASB issued guidance which requires companies to apply Topic 606, Revenue from Contracts with Customers, to recognize

and measure contract assets and contract liabilities from contracts with customers acquired in a business combination.

Public entities

must adopt the new guidance for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years, with early

adoption permitted.

The Company is currently evaluating the impact and timing of adoption of this guidance.

new accounting standards, not disclosed above, that have been issued or proposed by FASB that do not require adoption until a future

date are not expected to have a material impact on the consolidated financial statements upon adoption.

accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have

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.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2 - INVENTORY

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

SCHEDULE OF INVENTORIES

September 30, 2022

December 31, 2021

Basic income (loss) per share is computed by dividing net income (loss) by the weighted

average number of shares of common stock outstanding during the period.

The computation of diluted net loss per share does not

include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive.

where the Company has a net loss, all dilutive securities are excluded.

Of Earnings Per Share

Three Months Ended March 31,

Net loss attributable to common shareholders

$ ( 1,187,230 )

$ ( 850,083 )

Basic weighted average common shares outstanding

Potentially dilutive common shares

Diluted weighted average common shares outstanding

Basic weighted average loss per common share

Diluted weighted average loss per common share

March 31, 2023 and December 31, 2022, inventory consisted of the following:

Finished goods

Less reserve for obsolete inventory

the nine months ended September 30, 2022 and the year ended December 31, 2021, the Company did not make any change for reserve for obsolete

VAT Receivable

January 1, 2021, VAT rules relating to imports and exports between the UK and EU changed as a result of the UK’s departure from

the EU, (“BREXIT”).

For the nine months ended September 30, 2022 and the year ended December 31, 2021, the Company recorded

a receivable in the amount of $ 355,118 and $ 491,417 , respectively, for amounts available to reclaim against the tax liability from UK

and EU countries.

For the three months ended March 31, 2023 and the year ended December 31, 2022, the Company recorded

a receivable in the amount of approximately $ 510,000

and $ 433,000 ,

respectively, for amounts available to reclaim against the tax liability from UK and EU countries.

Prepaid Expenses

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

Prepaid expenses include prepayments

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

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

5 – PROPERTY AND EQUIPMENT

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

SCHEDULE OF PROPERTY AND EQUIPMENT

September 30, 2022

December 31, 2021

expenses current and long term amounted to approximately $ 78,000

and $ 49,000 ,

respectively at March 31, 2023, as compared to $ 46,000

and $ 49,000 ,

respectively at December 31, 2022.

Prepaid expenses include prepayments in cash for accounting fees, public company expenses,

insurance, 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.

Property and Equipment, net

and equipment, net consisted of the following:

OF PROPERTY AND EQUIPMENT, NET

Office furniture and fixtures

3 unchanged sentences

Website development

Less accumulated depreciation

Property and equipment gross

accumulated depreciation

( 2,021,848 )

( 1,865,244 )

expense was $ 329,272 and $ 206,654 for the nine months ended September 30, 2022 and 2021, respectively.

For the year ended December 31,

2021, depreciation expense was $ 292,102 .

6 – INTANGIBLE ASSETS

December 10, 2014, the Company entered the satellite voice and data equipment sales and service business through the purchase of certain

contracts from Global Telesat Corp.

These contracts permit the Company to utilize the Globalstar, Inc.

and Globalstar

LLC (collectively, “Globalstar”) mobile satellite voice and data network.

The purchase price for the contracts of $ 250,000

was paid by the Company under an asset purchase agreement by and among the Company, its wholly owned subsidiary, Orbital Satcom, GTC

and World Surveillance Group, Inc.

Property and equipment, net

expense was approximately $ 155,000 and $ 93,000 for the three months ended March 31, 2023 and 2022, respectively.

Intangible Assets, net

Intangible assets, net consist of customer contracts purchased as part of the GTC acquisition in 2014.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6 – INTANGIBLE ASSETS (continued)

in the purchased assets are:

(i) the rights and benefits granted to GTC under each of the Globalstar Contracts, subject to certain exclusions,

(ii) account and online access to the Globalstar Cody

Simplex activation system, (iii) GTC’s existing customers who are serviced pursuant to the Globalstar Contracts (only as to their

business directly and exclusively related to the Globalstar Contracts), and (iv) all of GTC’s rights and benefits directly and

exclusively related to the Globalstar Contracts.

of customer contracts are included in depreciation and amortization.

For the nine months ended September 30, 2022 and 2021, the Company

amortized $ 18,750 and $ 18,750 , respectively.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of customer contracts is included in depreciation and amortization in the accompanying Condensed Consolidated Statements of

Comprehensive Loss.

For the three months ended March 31, 2023 and 2022, the Company recognized amortization expense of $ 6,250

and $ 6,250 ,

respectively.

Future amortization of intangible assets is as follows:

SCHEDULE OF FUTURE AMORTIZATION OF INTANGIBLE ASSETS

the nine months ended September 30, 2022 and 2021, there were no additional expenditures on research and development.

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 .

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”).

Each share of Series B Preferred Stock

will vote as a class with the common stock of Progressive, and will have 100,000 Progressive votes per share, and each share of

Series B Preferred Stock will be convertible into 100,000 shares of Progressive’s common stock.

The Warrants 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.

November 11, 2022, the Progressive Care board of directors elected Mr.

Fernandez to serve as the Chief Executive Officer of Progressive

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 9,130,435 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 $ 0.02 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

The board seats, combined with the Company’s ownership interest of 33.28 % provide the Company with significant influence

over Progressive, but not a controlling interest.

Progressive does not depend on the Company for continuing financial support to maintain operations as of September 30, 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 $ 11.7 million at September 30, 2022.

Company combined its investment in the Series B Preferred Stock, common stock, warrants, and convertible note receivable into one line

item on the condensed consolidated balance sheets as “Equity method investment”.

The Company reported its aggregate earnings

from its investment as one line item on the condensed 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 condensed consolidated balance sheet description equity method investment as follows:

OF DESCRIPTION EQUITY METHOD INVESTMENT

30, 2022, beginning balance

of income from Progressive Care, Inc.

and Subsidiaries

( 3,453,172 )

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

30, 2022, carrying amount

method investment – short term

method investment – long term

following summarizes the Company’s condensed consolidated statements of operations and comprehensive loss description equity in

net loss of affiliate for the three and nine months ended September 30, 2022 as follows:

the Three and Nine Months Ended

in net loss of affiliate

$ ( 3,453,172 )

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

$ ( 3,454,436 )

records depreciation expense on its estimated cost basis difference which is subject to change

Company did not have any equity in net loss of affiliate for the three and nine months ended September 30, 2021.

8 - ACCOUNTS PAYABLE AND ACCRUED OTHER LIABILITIES

payable and accrued other liabilities consisted of the following:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED OTHER LIABILITIES

September 30, 2022

December 31, 2021

2023 (nine months)

Accounts Payable and Accrued Expenses

payable and accrued expenses consisted of the following:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable

3 unchanged sentences

VAT liability & sales tax payable

income tax payable

Accrued legal fees

Accrued stock based compensation

Pre-merger accrued other liabilities

2 unchanged sentences

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9 - CORONAVIRUS LOANS

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

Communications LTD (“GTC”), to apply for a Coronavirus Interruption Loan, offered by the UK government, for an amount up

to £ 250,000 .

On July 16, 2020 (the “Issue Date”), GTC, entered into a Coronavirus Interruption Loan Agreement (“Debenture”)

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

rate of GBP:USD of 1.3533720 .

The Debenture bears interest beginning July 16, 2021, at a rate of 4.0 % per annum over the Bank of England

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

The Debenture has a term

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

The first repayment of £ 4,166.67 (exclusive

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

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

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

The Debenture is secured

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

corporate and working capital purposes.

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

(i) non-payment

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

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

As of September 30, 2022, and December 31, 2021,

the Company has recorded $ 55,750 and $ 56,391 as current portion of notes payable and $ 157,958 and $ 253,757 as notes payable long term,

respectively.

May 8, 2020, NextPlat Corp was approved for the US funded Payroll Protection Program, (“PPP”) loan.

The loan was for $ 20,832

and had a term of 2 years, of which the first 6 months are deferred at an interest rate of 1 %.

On May 23, 2021, BlueVine, the Company’s

SBA approved mortgage lender and originator, notified the Company, that the loan in the amount of $ 20,832 , had been forgiven.

As of December

31, 2021, the Company has recorded $ 20,832 as forgiveness of debt.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Coronavirus Loan

On July 16, 2020 (the “Issue

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

UK Bank PLC (the “Lender”) for an amount of £ 250,000 ,

or USD $ 338,343

at an exchange rate of GBP:USD of 1.3533720 .

The Debenture bears interest beginning July 16, 2021, at a rate of 4.0 %

per annum over the Bank of England Base Rate ( 0.1 %

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

The Debenture has a term of 6 years from

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

The first repayment of £ 4,166.67

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

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

or, if less, the balance of the debenture .

The Debenture is secured by all GTC’s assets as well as a guarantee by the UK

The proceeds from the Debenture were 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”).

Upon the occurrence of an Event of Default, the Debenture becomes

payable upon demand.

of March 31, 2023, and December 31, 2022, the Company has recorded approximately $ 62,000 and $ 60,000 as current portion of notes payable

and approximately $ 144,000 and $ 156,000 as notes payable long term, respectively.

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 condensed 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

condensed 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.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10 - STOCKHOLDERS’ EQUITY (continued)

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 Quarterly Report on Form 10-Q,

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 Quarterly Report on Form 10-Q have been adjusted

to give effect to such assumed reverse stock split.

have authorized 3,333,333

shares of $ 0.0001

par value of preferred stock.

preferred stock was outstanding for any year presented.

As of March 31, 2023, there were no shares of preferred stock issued and outstanding.

have authorized 50,000,000

shares of $ 0.0001

par value common stock.

As of March 31, 2023, 14,441,025 shares of common stock were issued and outstanding.

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 per share.

As of September 30, 2022, and December 31, 2021, there were 9,649,096 and 7,053,146

shares of common stock and 0 shares of preferred stock issued and outstanding, respectively.

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

of September 30, 2022, there were no shares of Series A, B, C, D, E, F, G, H, I, J, K and L convertible preferred stock authorized, and

no shares issued and outstanding.

of September 30, 2022, there were 3,312,000 registered warrants to purchase common stock authorized of which 2,386,092 registered warrants

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

an exercise price of $ 5.50 .

The warrants expire in June of 2026.

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

months ended September 30, 2022 is as follows:

SCHEDULE OF OUTSTANDING STOCK WARRANTS ACTIVITIES

Balance at January 1, 2021

Balance outstanding and exercisable at December 31, 2021

Balance at January 1, 2022

Balance outstanding and exercisable at September 30, 2022

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10 - STOCKHOLDERS’ EQUITY (continued)

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

2022 Private Placement of Common Stock

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

signatures were received from, certain institutional and accredited investors (the “December Investors”) in connection with

the sale in a private placement by the Company of 2,229,950 shares of the Company’s common stock (the “December Offering”).

On January 2, 2022, the Company delivered to December Investors a fully executed Purchase Agreement, which was dated December 31, 2021.

The purchase price for the common stock sold in the December Offering was $ 3.24 per share, the closing transaction price reported by

Nasdaq on December 31, 2021.

closing of the December Offering occurred on January 5, 2022.

The Company received gross proceeds from the sale of the common stock in

the December Offering of approximately $ 7.2 million.

The Company intends to use the proceeds from

the December Offering for general corporate purposes, including potential acquisitions and joint ventures.

Approximately 73 % of

funds raised in the December Offering were secured from existing shareholders and from the members of the Company’s senior management

and Board of Directors.

connection with the December Offering, the Company entered into a registration rights agreement with the December Investors (the “Registration

Rights Agreement”), pursuant to which, among other things, the Company agreed to prepare and file with the SEC a registration statement

to register for resale the shares of the Company’s common stock sold in the Offering.

shares of common stock offered and sold in the December Offering were sold in reliance on the exemption from registration provided by

Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act and corresponding provisions

of state securities or “blue sky” laws.

terms of the transaction disclosed above, including the provisions of the Purchase Agreement and Registration Rights Agreement, were

approved by the Board of Directors;

and because some of the securities were offered and sold to officers and directors of the Company,

such terms were separately reviewed and approved by the Audit Committee of the Board of Directors.

January 5, 2022, the Company issued 2,229,950 shares of common stock pursuant to a private placement offering at a per share price of

$ 3.24 , resulting in gross proceeds of $ 7,225,038 .

Legal and registration fees amounted to $ 220,000 , resulting in net proceeds of $ 7,005,038 .

Prior to the private placement close, proceeds of $ 1,400,000 , were received and recorded as a stock subscription payable, for the year

ended December 31, 2021.

January 21, 2022, the Company issued 10,000

shares of common stock to Mr.

Rodney Barreto, pursuant to a restricted stock award, “RSA,” granted on January 7, 2022

and effective on January 20, 2022.

The award is for 20,000

restricted shares of common, which vest in two equal installments, the first on the effective date and the remaining on the one year

anniversary of the effective date, with a fair market value of $ 3.48

per share, on the date of issuance.

All shares were fully vested and upon issuance resulted in stock-based compensation of $ 34,800 .

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

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

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

to serve as Chairman of the Board.

However, two weeks later on June 2, 2021, the Company entered into a new employment agreement (the

“June Agreement”) with Mr.

Fernandez, which superseded and replaced “the May Agreement.” The June Agreement has

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

Fernandez received the award of restricted stock with a grant date fair value

equal to $ 3,000,000 determined at the per unit offering price in the June Offering ($ 5 per Unit) (the “RSA”), which RSA will

vest 1/3 at each of the three anniversaries of the grant date.

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

the June Agreement.

Notwithstanding the vesting schedule, full vesting will occur upon a Change in Control, as that term is defined in

the Restricted Stock Agreement pursuant to which the RSA was made (the “June Restricted Stock Agreement”).

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

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

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

of the securities granted to him in the RSA, in regard to the restricted stock award.

The Company at its sole expense is obligated to

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

July 22, 2022, pursuant to Mr.

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

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

managing director.

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

The value of the award for the

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

The award is valued over the service

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

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

award, became vested and issuable.

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

vested upon his resignation, see Note 13.

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

the award on October 8, 2021.

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

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

shares were fully vested upon issuance.

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

stock-based compensation of $ 292,320 .

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

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

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

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

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10 - STOCKHOLDERS’ EQUITY (continued)

summary of the status of the Company’s outstanding stock options and changes during the nine months ended September 30, 2022 is

SCHEDULE OF OUTSTANDING STOCK OPTIONS ACTIVITIES

Balance at January 1, 2021

Balance outstanding and exercisable at December 31, 2021

Balance at January 1, 2022

Balance outstanding and exercisable at September 30, 2022

11 - STOCK SUBSCRIPTION PAYABLE

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

signatures were received from, certain institutional and accredited investors (the “December Investors”) in connection with

the sale in a private placement by the Company of 2,229,950 shares of the Company’s common stock (the “December Offering”).

On January 2, 2022, the Company delivered to December Investors a fully executed Purchase Agreement, which was dated December 31, 2021.

The purchase price for the common stock sold in the December Offering was $ 3.24 per share, the closing transaction price reported by

Nasdaq on December 31, 2021.

the nine months ended September 30, 2022 and for the year ended December 31, 2021, the Company had a stock subscription payable of $ 0

and $ 1,400,000 , respectively.

On January 5, 2022, the Company

received an additional $ 5,825,038 ,

resulting in the issuance of 2,229,950

shares of the Company’s common stock, eliminating

the stock subscription payable as well as, the closing of the offering.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation

the three months ended March 31, 2023 and 2022, stock-based compensation expense recognized in selling, general and administrative expenses was approximately

and $ 35,000 ,

respectively.

There were no income tax benefits recognized from stock-based compensation during the three months ended March 31, 2023 and 2022 due to

cumulative losses and valuation allowances.

Related Party Transactions

of September 30, 2022, total related party payments due as of September 30, 2022, and December 31, 2021, were $ 15,692 and $ 35,308 , respectively.

The payments due were accrued salary.

These related party payables were non-interest bearing.

Company’s UK subsidiary, GTC had an over-advance line of credit with HSBC, for working capital needs, which was not renewed by

the Company on December 31, 2021.

The over-advance limit was £ 25,000 or $ 33,834 at an exchange rate of GBP:USD 1.353372 , with interest

at 5.50 % over Bank of England’s base rate or current rate of 6.25 % variable.

The advance was guaranteed by David Phipps, the Company’s

President and Chief Executive Officer of Global Operations.

The Company uses an American Express account for Orbital Satcom Corp and

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

Company employs three individuals who are related to Mr.

These three individuals earned gross wages totaling $ 99,965 and $ 107,042

for the nine months ended September 30, 2022 and 2021, respectively.

February 1, 2023, the Company entered into a Management Services Agreement with Progressive Care Inc.

(“Progressive

Care”) to provide certain management and administrative services to Progressive Care for a $ 25,000

per month fee.

During the three months ended March 31, 2023, the Company received $ 50,000

from Progressive Care as management fees and this amount is included in other income on the condensed consolidated statements of

comprehensive loss.

July 12, 2022, the Company hired Lauren Sturges Fernandez, the spouse of Mr.

2 unchanged sentences

On September 22, 2022, Mrs.

Fernandez’s title was changed to Chief of

Staff and Special Assistant to the Chairman of the Board, her salary remains the same.

the consummation of the Company’s investment in Progressive Care Inc.

on September 2, 2022, our Chairman and Chief Executive

Officer, Charles M.

Fernandez, and our board member, Rodney Barreto, were appointed to Progressive Care’s Board of Directors,

Fernandez appointed to serve as Chairman of Progressive Care’s Board of Directors and Mr.

Barreto appointed to serve

as a Vice Chairman of Progressive Care’s Board of Directors.

On November 11, 2022, the Progressive Care board of directors

Fernandez as the Chief Executive Officer of Progressive Care.

In addition, on September 2, 2022, NextPlat, Messrs.

Fernandez and Barreto and certain other purchasers purchased from Iliad Research and Trading, L.P.

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

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

The aggregate purchase price paid to Iliad for the Note was $ 2.3

Million of which NextPlat contributed $ 1

million and Messrs.

Fernandez and Barreto contributed $ 400,000

each (the “Note Purchase”).

In 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.

In consideration of the concessions in the

Debt Modification Agreement, Progressive Care issued 21,000,000

shares of its common stock to the purchasers of the Note, of which NextPlat, Charles Fernandez and Rodney Barreto, received 9,130,435 , 3,652,174 ,

and 3,652,174

shares, respectively.

Fernandez’s title was changed to Chief of Staff and Special Assistant to the Chairman of the

Board, with no change to her salary.

Previously Mrs.

Fernandez was a consultant and earned compensation for her services of $ 10,995

for the year ended December 31, 2022.

In April 2023, Mrs.

Fernandez’s annual salary increased to $ 125,000 , which was approved by the Board of Directors.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Commitments and Contingencies

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

and global economies.

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

most notably China, have experienced setbacks.

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

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

While vaccine availability and uptake has increased,

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

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

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

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

depend on future developments.

The resumption of our normal business operations may be delayed or constrained by lingering effects of

COVID-19 on our customers, suppliers and/or third-party service providers.

Furthermore, the extent to which our mitigation efforts are

successful, if at all, is not currently ascertainable.

Due to the daily evolution of the COVID-19 pandemic and the responses to curb

its spread, we cannot predict the full impact of the COVID-19 pandemic on our business and results of operations, but our business, financial

condition, results of operations and cash flows have already been materially adversely impacted, and we anticipate they will continue

to be adversely affected by the COVID-19 pandemic and its negative effects on global economic conditions.

Any recovery from the COVID-19

pandemic and related economic impact may also be slowed or reversed by a variety of factors, such as any increase in COVID-19 infections.

Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of its national

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

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

of COVID-19, we have experienced shortages in inventory due to manufacturing issues, a reduction in the volume of sales in some parts

of our business, such as rental sales and direct website sales, and a reduction in personnel due to lockdown related issues.

of operations for the nine months ended September 30, 2022 and for the years ended December 31, 2021 and December 31, 2020, reflect this

however, we expect that this trend may continue, and the full extent of the impact is unknown.

In recent months, some governmental

agencies in the US and Europe, where we produce the largest percentage of our sales, have lifted certain restrictions.

However, if customer

demand continues to be low, our future equipment sales, subscriber activations and sales margin will be impacted.

Compensatory Arrangements of Director

September 13, 2022, the Board appointed Maria Cristina Fernandez as a new director to the Board.

In addition, the Board approved a rotation

in the membership of the Company’s audit committee, compensation committee and nominating committee.

The membership of each such

committee is now as follows:

Audit Committee:

Rodney Barreto (Committee Chair),

Cristina Fernandez, and Lou Cusimano

Compensation Committee:

Hector Delgado (Committee Chair),

Lou Cusimano, and John Miller

Nominating Committee:

Cristina Fernandez (Committee

Chair), Lou Cusimano and Rodney Barreto

connection with Ms.

Fernandez’s appointment to the Company’s Board of Directors, the Company entered into a Director Services

Agreement with Ms.

Fernandez on September 28, 2022.

The agreement has a two -year term (subject to the director’s nomination and

election) and provides for a cash retainer of $ 30,000 per year plus meeting fees of $ 3,000 for every Board meeting attended and $ 500

for each committee meeting attended (to the extent such committee meetings do not occur on the same day as a board meeting).

The agreement

also contains customary confidentiality and indemnification provisions and require the Company to maintain a specified amount of director

and officer insurance.

The Company also entered into a Stock Option Agreement with Ms.

Fernandez on October 1, 2022, granting Ms.

options to purchase 20,000 shares of the Company’s common stock, subject to the vesting and other conditions set forth in the Stock

Option Agreement.

Under the vesting provisions in the Stock Option Agreement, the first half of the options were fully vested on day

one, with the remaining half vesting on the first anniversary of the grant date.

The options granted under the Stock Option Agreement

were made outside of the Company’s existing equity incentive plans and were approved by the Company’s independent directors.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13 - COMMITMENTS AND CONTINGENCIES (continued)

Phipps Employment Agreement

June 5, 2021, the Company entered into a three year employment agreement with Mr.

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

“2021 Phipps Employment Agreement”).

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

Phipps serves as the 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 is entitled to receive an annual cash bonus if the Company meets or exceeds criteria adopted

by the Compensation Committee of the Board of Directors (the “Compensation Committee”).

Phipps is also entitled to participate

in any other executive compensation plans adopted by the Board of Directors, and is eligible for such grants of awards under stock option

or other equity incentive plans as the Compensation Committee may from time to time determine (the “Share Awards”).

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 in the granting documents 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.

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.

Phipps will be entitled to participate in such pension, profit sharing, group insurance, hospitalization,

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

The 2021 Phipps Employment Agreement may be terminated based on death or disability of Mr.

Phipps, for cause or without good

reason, for cause or with good reason, and as a result of the change of control of the Company.

The 2021 Phipps Employment Agreement

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

non-solicitation covenants, indemnification provisions, etc.

On August 7, 2021, the 2021 Phipps Employment Agreement was amended in order

to, among other things, (i) increase Mr.

Phipps’ compensation to include a car allowance of $ 1,000 a month and (ii) clarify Mr.

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

Employment Agreements

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

to serve as Chairman of the Board.

two weeks later on June 2, 2021, the Company entered into a new employment agreement (the “June Agreement”) with Mr.

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

Under the June Agreement, Mr.

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

The June Agreement

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

Fernandez 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.

Fernandez is also entitled to participate in any other executive

compensation plans adopted by the Board and is eligible for such grants of Share Awards.

Share Awards will be subject to the applicable

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

therein or in any award certificate(s), which will supersede any conflicting provisions governing Share Awards provided under the equity

incentive plan.

The Company is required to pay or to reimburse Mr.

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

or paid by Mr.

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

Fernandez is 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 June 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.

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13 - COMMITMENTS AND CONTINGENCIES (continued)

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

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

The Company will also pay for

any and all fees and costs incurred by Mr.

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

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

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

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 (the “Ellenoff Agreement”).

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

Under the terms of the Ellenoff Agreement,

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 were 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 Company’s Common Stock, 300,000 of which were within 5 business days of the execution of the Ellenoff Employment

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

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

the commencement of his employment if during each such year Mr.

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

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

provided that the Company’s

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

Such options have an exercise price

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

These equity awards to Mr.

Ellenoff were material to induce Mr.

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

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

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13 - COMMITMENTS AND CONTINGENCIES (continued)

Employment Agreement

June 22, 2021, the Company appointed Theresa Carlise as Controller, Treasurer and Secretary.

In connection with Ms.

Carlise’s appointment,

Carlise and the Company entered into an employment agreement (the “Carlise Agreement”) with an initial term of one year

The term of the Carlise Agreement will be automatically extended for additional one-year terms unless terminated by the Company or Ms.

Carlise by written notice.

Carlise’s annual base compensation is $ 180,000 .

The Carlise Agreement provides for medical plan

coverage and an auto allowance.

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

In addition, Ms.

will be entitled to receive an annual cash bonus if the Company meets or exceeds criteria adopted by the Compensation Committee of the

Board of Directors.

Carlise is also entitled to participate in any other executive compensation plans adopted by the Board of Directors

and is eligible for such grants of awards under stock option or other equity incentive plans as the Compensation Committee of the Company

may from time to time determine.

The Company is required to pay or to reimburse Ms.

Carlise for all reasonable out-of-pocket expenses

actually incurred or paid by Ms.

Carlise in the course of her employment, consistent with the Company’s policy.

Carlise shall

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

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

The Carlise Agreement may

be terminated based on death or disability of the executive, for cause or without good reason, for cause or with good reason, and as

a result of the change of control of the Company.

The Carlise Agreement also contains certain provisions that are customary for agreements

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

7, 2021, on the approval and recommendation of the Compensation Committee, the Company entered into the Carlise Agreement to, among other

things, change Ms.

Carlise’s title to “Chief Accounting Officer, Secretary and Treasurer.

On October 8, 2021, on the approval

and recommendation of the Compensation Committee, and following the subsequent approval of the Board, the Company entered into an amendment

to Carlise, the Company’s Chief Accounting Officer, Treasurer and Secretary, to extend the initial term of her employment agreement

from 1 year to 3 years (the “Carlise Amendment”).

Employment Agreement

August 24, 2021, Paul R.

Thomson was appointed to the position of Executive Vice President of the Company.

Thomson’s appointment

as Executive Vice President was effective on August 24, 2021, the date of that certain Employment Agreement between Mr.

Thomson and the

Company (the “Thomson Agreement”).

The Thomson Agreement has an initial term of three ( 3 ) years and will be automatically

extended for additional 1-year term unless terminated by the Company or Mr.

Thomson by written notice.

Thomson’s annual base

compensation is $ 250,000 .

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

In addition, Mr.

be entitled to receive an annual cash bonus if the Company meets or exceeds criteria adopted by the Compensation Committee of the Board.

Thomson is also entitled to participate in any other executive compensation plans adopted by the Board 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”).

connection with Mr.

Thomson’s employment, and as a material inducement to enter into the Thomson Agreements, Mr.

Thomson received

(i) immediately vested options to purchase 25,000 shares of Common Stock at a per share price of $5.35, and having a term of 5 years;

and (ii) a restricted stock grant of 25,000 shares of Common Stock, 10,000 of which vest immediately, and the remaining 15,000 of which

will vest at the rate of 5,000 shares at the end of each of the next three annual anniversaries of his employment.

These equity awards

Thomson were issued outside of a shareholder approved stock or option plan pursuant to the Nasdaq “inducement grant”

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

On October 7, 2021, the Board of Directors of the Company (the “Board”) appointed

Thomson, the Executive Vice President of the Company, to the additional position of Chief Financial Officer of the Company effective

October 9, 2021.

As Chief Financial Officer, Mr.

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

On October 8, 2021, on the approval and recommendation of the Compensation Committee of the Board (the “Compensation Committee”),

and following subsequent approval of the Board, the Company entered into an amendment to the Company’s current employment agreement

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

2021 (the “Thomson Amendment”).

CORP AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13 - COMMITMENTS AND CONTINGENCIES (continued)

Employment Agreement

October 7, 2021, the Board appointed Andrew Cohen as Senior Vice President of Operations of the Company, effective October 8, 2021.

connection with Mr.

Cohen’s appointment, the Company entered into an employment agreement, dated October 8, 2021 (the “Cohen

Agreement”), that sets forth the terms of his employment.

Cohen Agreement has an initial term of three ( 3 ) years and will be automatically extended for additional 1-year terms unless terminated

by the Company or Mr.

Cohen by written notice.

Cohen’s annual base compensation is $ 250,000 .

The Company may increase (but

not decrease) his compensation during its term.

In addition, Mr.

Cohen will be entitled to receive an annual cash bonus if the Company

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

Cohen is also entitled to participate in any other

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

plans as the Compensation Committee may from time to time determine.

The Company is required to pay or to reimburse Mr.

Cohen for all

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

Cohen in the course of his employment, consistent with the Company’s

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

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

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

Cohen, for cause, for good reason, and

as a result of the change of control of the Company.

The Cohen Agreement also contains certain provisions that are customary for agreements

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

connection with Mr.

Cohen’s employment, and as a material inducement to enter into the Cohen Agreement, Mr.

Cohen received (i)

immediately vested options to purchase 25,000 shares of Common Stock at a per share price of $5.35, and having a term of 5 years;

(ii) a restricted stock grant of 25,000 shares of Common Stock, 10,000 of which vest immediately, and the remaining 15,000 of which will

vest at the rate of 5,000 shares at the end of each of the next three annual anniversaries of his employment.

These equity awards to

Cohen were issued outside of a shareholder approved stock or option plan pursuant to the Nasdaq “inducement grant” exception

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

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

Section 4(a) of the Agreement shall

be deleted and replaced to read as follows;

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

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

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

The Corporation shall review the Base

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

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

upon termination of the Employee’s

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

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

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

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

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

withholding of all applicable taxes;

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

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

and (iii) payment on a pro-rated

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

of the Employee’s termination of Employment.

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

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

July 12, 2022, the Company entered into a mutual release and separation agreement with Mr.

Cohen in regard to his employment with the

Company and accepted his resignation as of July 29, 2022.

Per the terms of the agreement Mr.

Cohen was entitled to $75,000 severance

and the remaining 15,000 restricted stock award became fully vested and was issued on August 4, 2022, resulting in stock-based compensation

of $ 76,950 .

December 2, 2021, the Company entered a 62-month lease for its corporate headquarters for 4,141

square feet of office space for $ 186,345

annually, in Coconut Grove, FL.

The rent increases 3 %

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

July 24, 2019, a three-year lease was signed for 2,660 square feet for £ 25,536 annually, for our facilities in Poole, England,

“UK lease”, for £ 2,128 per month, or USD $ 2,765 per month at the yearly average conversion rate of 1.299279 .

lease expired July 23, 2022 and the Company is continuing to lease the facility on a month-to-month basis.

On October 6, 2022, the UK

lease was renewed effective November 1, 2022 to October 31, 2023 for £ 2,500 , or USD $ 3,146 per month at the yearly average conversion

rate of 1.25838 .

This renewal is not representative in the table future minimum lease payments, for the nine months ended September 30,

leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees.

expenses generally represent the Company’s share of the landlord’s operating expenses.

The Company does not have any leases

classified as financing leases.

minimum lease payments under these leases are as follows:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

Years Ending December 31,

Total undiscounted future non-cancelable minimum lease payments

Imputed interest

Present value of lease liabilities

Weighted average remaining term

expenses for the nine months ended September 30, 2022, and 2021 were $ 58,284 and $ 24,948 , respectively.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13 - COMMITMENTS AND CONTINGENCIES (continued)

September 30, 2022, the Company had current and long-term operating lease liabilities of $ 863,294 and right of use assets of $ 865,115 .

rent expense for the nine months ended September 30, 2022 and 2021 were $ 70,717 and $ 36,055 , respectively.

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

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

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

The Company’s position is that Mr.

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

or arising under any employment agreement.

The Company and Mr.

Seifert are currently engaged in litigation over the matter of his employment

and termination.

The Company believes it has adequate defenses to Mr.

Seifert’s claims and has asserted affirmative claims for

relief against Mr.

Seifert including, but not limited to, breach of the employment agreement, breach of the fiduciary, fraud in the inducement

in connection with the employment agreement, fraudulent misrepresentation, and constructive fraud.

The Company does not expect to seek

substantial monetary relief in the litigation.

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

under Case No.

1:21-cv-22436-DPG.

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

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

NextPlat responded by moving to dismiss

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

to the adverse action alleged in the complaint.

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

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

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

On September 8, 2022, we received notice from the U.S.

Department of

Labor that Thomas Seifert had withdrawn his Complaint.

Pursuant to applicable Federal Regulations, the matter was closed and the Secretary’s

Findings were rescinded.

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

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

The Company believes it has adequate defenses to any such claims.

The Company has determined to initiate litigation against Mr.

Seifert asserting a number of claims including, but not limited to, rescission

of the employment agreement, fraud in the inducement in connection with the execution of the employment agreement, and breach of the

fiduciary duties of good faith and loyalty.

The Company does not expect to seek substantial monetary relief in the litigation.

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

The Company is not currently involved in any pending legal proceeding or litigation, and to the best of our knowledge, no governmental

authority is contemplating any proceeding to which the Company is a party or to which any of the Company’s properties is subject,

which would reasonably be likely to have a material adverse effect on the Company’s business, financial condition and operating

The Company is not currently involved in any pending legal proceeding or litigation, and, to the best of our knowledge, no

governmental authority is contemplating any proceeding to which the Company is a party or to which any of the Company’s properties

is subject, which would reasonably be likely to have a material adverse effect on the Company’s business, financial condition and

operating results.

Company has entered into a number of lease arrangements under which the Company is the lessee.

These leases are classified as operating

In addition, the Company has elected the short-term lease practical expedient in ASC Topic 842 related to real estate leases

with terms of one year.

The following is a summary of the Company’s lease arrangements.

Lease Agreements

December 2, 2021, the Company entered into a 62-month lease for 4,141 square feet of office space in Florida, for $ 186,345 annually.

The rent increases 3 % annually.

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

our facilities in Poole, England, we rent office and warehouse space of approximately 2,660 square feet for £ 30,000 annually or

approximately USD $ 37,107 , based on a yearly average exchange rate of 1.24 GBP:USD.

The Poole lease was renewed on October 6, 2022,

and will expire October 31, 2023.

Florida lease does not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees.

Variable expenses generally represent the Company’s share of the landlord’s operating expenses.

The Company does not have

any leases classified as financing leases.

rate implicit to the Florida lease is not readily determinable, and we therefore use our incremental borrowing rate to determine the

present value of the lease payments.

The weighted average incremental borrowing rate used to determine the initial value of right of

use (ROU) assets and lease liabilities for the three months ended March 31, 2023 and for the year ended December 31, 2022 was 3.75 %.

Right of use assets for operating leases are

periodically reduced by impairment losses.

We use the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant,

and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.

As of March 31, 2023 and December 31, 2022, we have not recognized any impairment losses for our ROU assets.

monitor for events or changes in circumstances that require a reassessment of one of our leases.

When a reassessment results in the remeasurement

of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would

reduce the carrying amount of the ROU asset to an amount less than zero.

In that case, the amount of the adjustment that would result

in a negative ROU asset balance is recorded in profit or loss.

CORP AND SUBSIDIARIES

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Concentrations

accounted for 52.3 %

of the Company’s revenues during the nine months ended September 30, 2022 and 2021, respectively.

For the three months ended

September 30, 2022 and 2021, Amazon accounted for 59.2 %

64.8 %, respectively.

to customers through Amazon accounted for 57.2 %

of the Company’s revenues during the three months ended March 31, 2023 and 2022, respectively.

No other customer accounted for 10 %

or more of the Company’s revenues for either period.

CORP AND SUBSIDIARIES

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

14 – CONCENTRATIONS (continued)

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

months ended September 30, 2022 and 2021.

SCHEDULE OF CONCENTRATION RISK

September 30, 2022

September 30, 2021

Satcom Global

Globalstar Europe

Network Innovations

Cygnus Telecom

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

months ended September 30, 2022 and 2021.

September 30, 2022

September 30, 2021

Satcom Global

Globalstar Europe

months ended March 31, 2023 and 2022 (unaudited).

SCHEDULE OF CONCENTRATION RISK

Iridium Satellite

Network Innovations

Cygnus Telecom

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

Concentration risk, amount

following table sets forth revenue as to each geographic location, for the three months ended March 31, 2023 and 2022 (unaudited):

SCHEDULE OF REVENUE FROM EACH GEOGRAPHIC LOCATION

September 30, 2022

September 30, 2021

North America

1 unchanged sentence

Asia & Pacific

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

September 30, 2022

September 30, 2021

North America

South America

Asia & Pacific

Subsequent Events

October 1, 2022, the Company entered into a Stock Option Agreement with Ms.

Maria Cristina Fernandez granting Ms.

Fernandez options to

purchase 20,000 shares of the Company’s common stock, subject to the vesting and other conditions set forth in the Stock Option

Under the vesting provisions in the Stock Option Agreement, the first half of the options were fully vested on day one, with

the remaining half vesting on the first anniversary of the grant date.

The options granted under the Stock Option Agreement were made

outside of the Company’s existing equity incentive plans and were approved by the Company’s independent directors.

October 6, 2022, the UK lease was renewed for our facility in Poole, United Kingdom, effective November 1, 2022 to October 31, 2023,

for £ 2,500 , or USD $ 3,146 per month at the yearly average conversion rate of 1.25838.

November 7, 2022, in connection with election of Mr.

Robert Bedwell as the Chief Compliance Officer of the Company, the Company entered

into an employment agreement with Mr.

Pursuant to this agreement, Mr.

Bedwell will receive an annual base salary of $ 125,000

and will be eligible for grants of awards under the Company’s Incentive Award Plan as determined by the Compensation Committee

and our CEO from time to time with an initial reward under his employment agreement of stock options for 50,000 shares of the Company’s

common stock with a vesting schedule as follows:

(1) options for 25,000 shares will become fully vested on the first anniversary of the

commencement of Mr.

Bedwell’s employment with the Company;

(2) options for 10,000 additional shares will become fully vested on

the second anniversary of the commencement of Mr.

Bedwell’s employment with the Company;

and (3) options for an additional 15,000

shares will become fully vested on the third anniversary of the commencement of Mr.

Bedwell’s employment with the Company.

Bedwell duties for NextPlat, he will continue monitoring the compliance of RXMD and PharmCoRx, accordingly Progressive Care will

pay for 20% of Mr.

Bedwell’s annual base salary.

November 14, 2022, in connection with the transition of Mr.

Paul Thomson from Executive Vice President and Chief Financial Officer of

the Company to his new role as Senior Vice President of Mergers, Acquisitions and Special Projects, the Company entered into a new employment

agreement with Mr.

This new agreement has an initial term of one year and may be extended by our CEO for additional terms of

one year each.

Under this agreement, Mr.

Thomson will be paid an annual base salary of $ 150,000 and will keep all his rights and interests

in and to the options set forth in his prior employment agreement with the Company, subject to the terms and conditions set forth in

such prior employment agreement.

November 14, 2022, in connection with the election of Ms.

Cecile Munnik as Chief Financial Officer of the Company, the Company entered

into an employment agreement with Ms.

Pursuant to the agreement, until June 30, 2023, Ms.

Munnik will devote 30% of her business

time to the Company and will devote the remaining 70% to Progressive Care.

Starting on July 1, 2023, Ms.

Munnik will devote all of her

full business time and effort to the performance of her duties as the Chief Financial Officer of the Company.

Munnik will receive

an annual base salary of $ 67,500 from the commencement of her employment with the Company until June 30, 2023.

Thereafter, commencing

on July 1, 2023, Ms.

Munnik will receive an annual base salary of $ 225,000 .

In addition, Ms.

Munnik will be eligible for grants of awards

under the Company’s Incentive Award Plan as determined by the Compensation Committee and our CEO from time to time with an initial

reward under her employment agreement of stock options for 50,000 shares of the Company’s common stock with a vesting schedule

(1) options for 25,000 shares will become fully vested on the first anniversary of the commencement of Ms.

employment with the Company;

(2) options for 10,000 additional shares will become fully vested on the second anniversary of the commencement

Munnik’s employment with the Company;

and (3) options for an additional 15,000 shares will become fully vested on the third

anniversary of the commencement of Ms.

Munnik’s employment with the Company.

2023 Investment in Progressive Care and Debt Conversion

On May 5, 2023, NextPlat entered into a Securities Purchase Agreement (the “SPA”) with Progressive

Care, pursuant to which the Company agreed to purchase 455,000 newly issued units of securities from Progressive Care (the “Units”)

at a price per Unit of $ 2.20 for an aggregate purchase price of $ 1 million (the “Unit Purchase”).

Each Unit consists of one

share of common stock, par value $ 0.0001 per share, of Progressive Care (“Common Stock”) and one warrant to purchase a share

of Common Stock (the “PIPE Warrants”).

The PIPE Warrants have a three-year term and will be immediately exercisable.

PIPE Warrant is exercisable at $ 2.20 per share of Common Stock.

On May 9, 2023, NextPlat and Progressive Care closed the transactions

contemplated in the SPA.

Progressive Care intends to use the net proceeds from the Unit Purchase for its working capital needs.

with the closing, Progressive Care entered into a Debt Conversion Agreement (the “DCA”) with NextPlat and the other

holders (the “Holders”) of that certain Amended and Restated Secured Convertible Promissory Note, dated as of September

2, 2022, made by Progressive Care in the original face amount of approximately $ 2.8

million (the “Note”).

Pursuant to the DCA, NextPlat and the other Holders agreed to convert the total

approximately $ 2.9 million

of outstanding principal and accrued and unpaid interest to Common Stock at a conversion price of $ 2.20

Of the total 1,312,379

shares of Common Stock issued upon conversion of the Note pursuant to the DCA, NextPlat received 570,599

shares, Charles M.

Fernandez, the Executive Chairman and Chief Executive Officer of NextPlat, received 228,240

shares, and Rodney Barreto received 228,240

In addition, each of the Holders also received a warrant to purchase one share of Common Stock for each share of Common

Stock they received upon conversion of the Note (the “Conversion Warrants”).

The Conversion Warrants have a three-year

term and will be immediately exercisable.

Each Conversion Warrant is exercisable at $ 2.20

per share of Common Stock.

CORP AND SUBSIDIARIES

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

At the same time, Progressive Care and NextPlat entered into a First Amendment (the “Amendment”) to that certain Securities

Purchase Agreement dated November 16, 2022 (the “Debenture Purchase Agreement”).

Under the Debenture Purchase Agreement, Progressive

Care agreed to issue, and NextPlat Corp agreed to purchase, from time to time during the three-year term of the Debenture Purchase Agreement,

up to an aggregate of $ 10 million of secured convertible debentures from the Company (the “Debentures”).

Pursuant to the Amendment,

NextPlat and Progressive Care agreed to amend the Debenture Purchase Agreement and the form of Debenture to have a conversion price of $ 2.20 per share.

At present, no Debentures have been purchased by NextPlat under the Debenture Purchase

In addition, Progressive Care issued warrants to certain existing Progressive Care investors to induce them to approve the transaction

contemplated by the SPA (the “Inducement Warrants”).

Fernandez and Rodney Barreto received Inducement Warrants

to purchase 190,000 and 30,000 shares of Common Stock, respectively.

The Inducement Warrants have a three-year term and will be immediately

Each Inducement Warrant is exercisable at $ 2.20 per share of Common Stock.

Merchant Sourcing Agreement

April 20, 2023, the Company and Alibaba.com Singapore E-Commerce Private Limited, a company organized under

the laws of Singapore (“Alibaba”), entered into a Merchant Sourcing Agreement (the “Agreement”) pursuant to which

the Company and Alibaba will collaborate in a non-exclusive manner to increase the sale of products produced and sold by American companies

to the Chinese consumer market on the Tmall Global e-commerce platform.

The Agreement has a term of ninety (90) days.

2023 Private Placement of Common Stock

April 5, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”)

with an accredited investor (the “Investor”) for the sale by the Company in a private placement of 3,428,571 shares of the

Company’s common stock, $ 0.0001 par value per share (the “Common Stock”).

The offering price of the Common Stock was

$ 1.75 per share, the closing price of the Common Stock on April 4, 2023.

On April 11, 2023, the Private Placement closed.

Upon the closing

of the Private Placement, the Company received gross proceeds of approximately $ 6.0 million.

The Company sold the Common Stock to the

Investor in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation

D promulgated under the Securities Act and corresponding provisions of state securities or “blue sky” laws.

represented that it is acquiring the Common Stock for investment only and not with a view towards, or for resale in connection with,

the public sale or distribution thereof.

Accordingly, the Common Stock has not been registered under the Securities Act and may not be

offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable

state securities laws.

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

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elsewhere in this report.

Statements made in this Item 2, “Management’s Discussion and Analysis and Plan of Financial Condition

Statements made in this Item 2, “Management’s Discussion and Analysis of Financial Condition

and Results of Operations,” and elsewhere in this quarterly report on Form 10-Q that do not consist of historical facts, are “forward-looking

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The Company disclaims any obligation to update the forward-looking statements in this report.

should read the following information in conjunction with our financial statements and related notes contained elsewhere in this report.

You should consider the risks and difficulties frequently encountered by early-stage companies, particularly those engaged in new and

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that critical accounting policies may have on our business and our financial performance.

encourage you to review our periodic reports filed with the SEC and included in the SEC’s EDGAR database, including the Annual

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

public filings with the SEC.

Corp, formerly Orbsat Corp (“NextPlat”), is a Nevada corporation.

Our headquarters and principal executive offices are located

at 3250 Mary St., Suite 410, Coconut Grove, FL 33133.

Our telephone number is (305) 686-3250, and our corporate website is www.nextplat.com .

Unless the context requires otherwise, in this report the terms “the Company,” “we,”

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

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

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

and global economies.

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

most notably China, have experienced setbacks.

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

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

While vaccine availability and uptake has increased,

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

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

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

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

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

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

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

The resumption of our normal business operations

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

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

Due to the daily evolution of the

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

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

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

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

such as any increase in COVID-19 infections.

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

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

that may occur in the future.

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

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

of COVID-19, we have experienced shortages in inventory due to manufacturing issues, a reduction in the volume of sales in some parts

of our business, such as rental sales and direct website sales, and a reduction in personnel due to lockdown related issues.

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

Recently, some governmental agencies in the US and Europe,

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

We have incurred strong increases in sales outside

of our Amazon marketplaces for the nine months ended September 30, 2022.

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

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

beyond our current global network of online storefronts serving thousands of consumers, enterprises, and governments, the Company has

encourage you to review our periodic reports filed with the SEC and included in the SEC’s EDGAR database, including our Annual

Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 31, 2023, and our subsequent public

filings with the SEC.

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

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

Our new platform (“NextPlat Digital”), which is currently in the design and development phase in collaboration

with consultants and contracted developers, will initially enable the use of non-fungible tokens (“NFTs”), in e-commerce

and in community-building activities.

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

assets once applicable legal and regulatory requirements are addressed.

As currently contemplated, NextPlat Digital may facilitate the

creation/minting, purchase and sale of a broad range of non-yield-generating and non-fractionalized NFT products, including, but not

limited to, art, music, collectables, digital real estate, video games, game items and certificates of authenticity.

We also anticipated

developing and deploying NFTs for use in tokenizing data for use in brand loyalty programs.

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.

The Company operates two main e-commerce websites as well as 25 third-party e-commerce

storefronts such as Alibaba, Amazon and Walmart.

These e-commerce venues form an effective global network serving thousands of consumers,

enterprises, and governments.

NextPlat has announced its intention to broaden its e-commerce platform and is implementing comprehensive

systems upgrade to support this initiative.

The Company has also begun the design and development of a next generation platform for digital

assets built for Web3 (an internet service built using decentralized blockchains).

This new platform (“NextPlat Digital”)

is currently in the design and development phase and will enable the use of a range of digital assets, such as non-fungible tokens (“NFTs”),

in e-commerce and in community-building activities.

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

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

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of “coins” or the mining of cryptocurrencies.

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

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

our platform is also unresolved.

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

obligations for the Company.

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

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

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

To the extent that we determine that

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

federal and/or securities laws, we intend to

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

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

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

administered and enforced by the U.S.

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

We may have legal

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

respect to the securities status of an NFT that we propose to post to our platform, we will follow an internally developed model that

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

2023 Private Placement of Common Stock

April 5, 2023, we entered into a securities purchase agreement (the “Purchase Agreement”)

with an accredited investor (the “Investor”) for the sale by the Company in a private placement of 3,428,571 shares of the

Company’s common stock, $0.0001 par value per share (the “Common Stock”).

The offering price of the Common Stock was

$1.75 per share, the closing price of the Common Stock on April 4, 2023.

On April 11, 2023, the Private Placement closed.

Upon the closing

of the Private Placement, we received gross proceeds of approximately $6.0 million.

The Company sold the Common Stock to the

Investor in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation

D promulgated under the Securities Act and corresponding provisions of state securities or “blue sky” laws.

represented that it is acquiring the Common Stock for investment only and not with a view towards, or for resale in connection with,

the public sale or distribution thereof.

Accordingly, the Common Stock has not been registered under the Securities Act and may not be

offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable

state securities laws.

May 2023 Investment

in Progressive Care and Debt Conversion

On May 5, 2023, we

entered into a Securities Purchase Agreement (the “SPA”) with Progressive Care, pursuant to which we agreed to

purchase 455,000 newly issued units of securities from Progressive Care (the “Units”) at a price per Unit of $2.20 for

an aggregate purchase price of $1 million (the “Unit Purchase”).

Each Unit consists of one share of common stock, par

value $0.0001 per share, of Progressive Care (“Common Stock”) and one warrant to purchase a share of Common Stock (the

“PIPE Warrants”).

The PIPE Warrants have a three-year term and will be immediately exercisable.

Each PIPE Warrant is

exercisable at $2.20 per share of Common Stock.

On May 9, 2023, NextPlat and Progressive Care closed the transactions contemplated

Progressive Care intends to use the net proceeds from the Unit Purchase for its working capital needs.

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

What changed 10-Q

Item 1. Financial Statements