NextPlat Corp

Note1. Organization and Nature of Operations

NextPlat Corp:

NextPlat Corp, a Nevada corporation (the “Company”, “NextPlat”, “we”), formerly Orbsat Corp was incorporated in1997. The Company operatestwo main e-commerce websites as well as25 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. Additionally, 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 in2008. 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.

Our wholly-owned subsidiary, Orbital Satcom Corp. (“Orbital Satcom”), a Nevada corporation, was formed on* November 14, 2014.*

On* June 22, 2022,NextPlat B.V. (“NXPLBV”) was formed in Amsterdam, Netherlands, as a wholly owned subsidiary of NextPlat Corp. Presently, NXPLBV doesnot* have any active operations.

On* April 1, 2024,*NextPlat acquired 100% of the ownership interest of Outfitter Satellite, Inc., a Tennessee corporation ("Outfitter") in a stock purchase transaction. Outfitter is a wholly-owned subsidiary of NextPlat Corp.

Progressive Care, LLC (formerly Progressive Care Inc.):

On* April 12, 2024,the Company entered into a Merger Agreement and Plan of Reorganization (the “Merger Agreement”) with Progressive Care Inc. and Progressive Care LLC, a Nevada limited liability company and a direct, wholly owned subsidiary of the Company (“Progressive Care” or“Merger Sub”). On October 1, 2024and pursuant to the terms of the Merger Agreement, the Company, Progressive Care Inc. and Merger Sub entered into a business combination transaction pursuant to which Progressive Care Inc. merged with and into Merger Sub (the “Merger”), with Merger Sub being the surviving entity of the Merger. Following the Merger, Progressive Care LLC became be a wholly-owned subsidiary of NextPlat. Progressive Care Inc. previously became a controlled subsidiary of the Company on July 1, 2023,therefore the Merger hadno* financial impact to the Company.

The Merger Agreement and the transactions contemplated thereby were negotiated and approved by a Special Committee comprised ofthree of the Company’s independent directors. The Merger Agreement was also approved by the entirety of the Company’s board of directors.

The Company’s shareholders approved the Merger at the Company’s annual meeting held on* September 13, 2024.*

Progressive Care, through its wholly-owned subsidiaries, Pharmco, LLC (“Pharmco901”), Touchpoint RX, LLC doing business as Pharmco Rx1002, LLC (“Pharmco1002”), Family Physicians RX, Inc. doing business as PharmcoRx1103 and PharmcoRx1204 (“FPRX” or “Pharmco1103” and “Pharmco1204”) (pharmacy subsidiaries collectively referred to as “Pharmco”), and ClearMetrX Inc. (“ClearMetrX”) is a personalized healthcare services and technology company that provides prescription pharmaceuticals and risk and data management services to healthcare organizations and providers.

6

Pharmco901 was formed on* November 29, 2005as a Florida Limited Liability Company and is a 100% owned subsidiary of Progressive Care. Pharmco901* was acquired by Progressive on* October 21, 2010.Progressive currently delivers prescriptions to Florida’s diverse population and ships medications to patients in states where they hold non-resident pharmacy licenses as well. Progressive currently holds Florida Community Pharmacy Permits at all Florida pharmacy locations and the Pharmco901* location is licensed as a non-resident pharmacy in the following states: Arizona, Colorado, Connecticut, Georgia, Illinois, Minnesota, Nevada, New Jersey, New York, Pennsylvania, Texas, and Utah. Progressive is able to dispense to patients in the state of Massachusetts without a non-resident pharmacy license because Massachusetts doesnot require such a license for these activities.

Pharmco1103 is a pharmacy with locations in North Miami Beach and Orlando, Florida that provides Pharmco’s pharmacy services to Miami-Dade County, Broward County, the Orlando/Tampa corridor, and the Treasure Coast of Florida. Progressive acquired all the ownership interests in Pharmco1103 in a purchase agreement entered into on* June 1, 2019.*

Pharmco1002 is a pharmacy located in Palm Springs, Florida that provides Pharmco’s pharmacy services to Palm Beach, St. Lucie and Martin Counties, Florida. Progressive acquired all the ownership interests in Pharmco1002 in a purchase agreement entered into on* July 1, 2018.*

ClearMetrX was formed on* June 10, 2020and providesthird*-party administration (“TPA”) services to340B covered entities. ClearMetrX also provides data analytics and reporting services to support and improve care management for health care organizations.

RXMD Therapeutics was formed on* October 1, 2019.RXMD Therapeutics has hadno* operating activity to date.

Florida Sunshine Brands, LLC:

Florida Sunshine Brands, LLC (“Florida Sunshine”) is a Florida limited liability company and incorporated* December 6, 2023.*Florida Sunshine operates under an operating agreement between NextPlat, with a 51% ownership, and Outer Brands FS, LLC, with a 49% ownership. Florida Sunshine's main objective is to source and sell vitamins and nutritional supplements.

7

Note2. Basis of Presentation and Principles of Consolidation

The accompanying Unaudited 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 the2023 Form10-K, for interim financial information and in accordance with the rules and regulations of the SEC. Accordingly, they donot 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 the2023 Form10-K. In the 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) income, statements of changes in equity, and statements of cash flows for such interim periods presented. Additionally, operating results for interim periods arenot necessarily indicative of the results that can be expected for a full year. The year-end balance sheet data for comparative purposes was derived from audited consolidated financial statements.

The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated in consolidation.

In the period ended* September 30, 2024,the Company changed its presentation method on the statements of cash flows from the indirect method to the direct method. The Company has recast the Condensed Consolidated Statements of Cash Flows and related disclosures for the period ended September 30, 2023,*to conform to the direct presentation method in the current period.

Business acquisition of Progressive Care, Inc.

On* July 1, 2023,the Company, Charles M. Fernandez, Executive Chairman and Chief Executive Officer of the Company, and Rodney Barreto, Director of the Company, exercised common stock purchase warrants and were issued shares of Progressive Care common stock. After the exercise of the common stock purchase warrants, the Company and Messrs. Fernandez and Barreto collectively owned 53% of Progressive Care’s voting stock. At the time of exercise, all of the above common stock purchase warrants were in-the-money. Also on July 1, 2023,*the Company and Messrs. Fernandez and Barreto entered into a voting agreement whereby at any annual or special shareholders meeting of Progressive Care’s stockholders, and whenever the holders of Progressive Care common stock act by written consent, Messrs. Fernandez and Barreto agreed to vote all of the Progressive Care common stock (including any new shares acquired after the date of the voting agreement or acquired through the conversion of securities convertible into Common Stock) that they own, directly or indirectly, in the same manner that NextPlat votes its common stock and equivalents. The voting agreement is irrevocable and perpetual in term.

The exercise of the stock options, along with the entry into the voting agreement, resulted in a change in control of Progressive Care under the voting interest model in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic805, Business Combination, and was accounted for as a business acquisition. Therefore, Progressive Care became a consolidated subsidiary of the Company on* July 1, 2023.The Company previously accounted for its equity interest in Progressive Care as an equity method investment. The consolidated results of operations for the period ended September 30, 2024,include the fullnine* months results of operations attributable to Progressive Care compared to the consolidatednine months ended* September 30, 2023which include only thethree* months results of operations attributable to Progressive Care due to Progressive Care becoming a consolidated subsidiary of the Company on* July 1, 2023.*

On* April 12, 2024,*NextPlat entered into a Merger Agreement and Plan of Reorganization (the “Merger Agreement”) with Progressive Care Inc, and Progressive Care LLC, a Nevada limited liability company and a direct, wholly owned subsidiary of NextPlat (“Merger Sub”). Pursuant to the terms of the Merger Agreement, upon the approval of NextPlat's and Progressive Care's shareholders, Progressive Care would merge with and into Merger Sub (the “Merger”), with Merger Sub being the surviving entity of the Merger. The result of which being that Progressive Care would become a wholly-owned subsidiary of NextPlat.

On* September 13, 2024,*the shareholders of each of NextPlat and Progressive Care approved the Merger Agreement and the transactions contemplated thereby.

On* October 1, 2024,at12:01* Eastern time, the Merger became effective and Progressive Care merged with and into Mergers Sub and thereby became a wholly owned subsidiary of NextPlat. In connection with the Merger, each share of Progressive Care common stock that was issued and outstanding immediately prior to the effective time of the Merger was converted into 1.4865 shares of NextPlat common stock, and each warrant to purchase Progressive Care common stock that was outstanding and unexercised immediately prior to the effective time of the Merger automatically converted into a warrant to purchase shares of NextPlat common stock with each such warrant having and being subject to the same terms and conditions (including vesting and exercisability terms) as were applicable to such Progressive Care warrant immediately before the effective time.

Business acquisition of Outfitter Satellite, Inc.

On* March 25, 2024,the Company entered into a Stock Purchase Agreement with James T. McKinley, pursuant to which the Company agreed to purchase all of the issued and outstanding shares of common stock of Outfitter Satellite, Inc. (“Outfitter”). The closing of the transaction occurred on April 1, 2024.*Outfitter is a wholly-owned subsidiary of NextPlat Corp.

8

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 periods then ended. Actual results* maydiffer significantly from those estimates. Significant estimates made by management include, but arenot* limited to, assumptions used to calculate stock-based compensation, fair value of net assets acquired in the business combination with Progressive Care and Outfitter, common stock and options issued for services, net realizable value of accounts receivables and other 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, pharmacy benefit manager (“PBM”) fee estimates, and the estimates of the valuation allowance on deferred tax assets.

Note3. Summary of Significant Accounting Policies

The significant accounting policies of the Company were described in Note1 to the Audited Consolidated Financial Statements included in the Company’s Form10-K for the fiscal year ended* December 31, 2023*. There have beenno material changes to the Company’s significant accounting policies for thenine months ended* September 30, 2024*. Selected accounting policy disclosures are provided below.

Cash

The Company places its cash with high credit quality financial institutions. The Company’s account at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. All cash amounts in excess of $250,000, approximately $1.0 million, are unsecured. The Company has 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. The Company believes that the ICS agreement will mitigate its credit risk as it relates to uninsured FDIC amounts in excess of*$250,000.*

Foreign Currency Translation

The Company’s reporting currency is U.S. Dollars. The accounts ofone of the Company’s subsidiaries, GTC, is maintained using the appropriate local currency, Great British Pound, as the functional currency. All assets and liabilities are translated into U.S. Dollars at balance sheet date, shareholders’ equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are reported as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) gain. Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the condensed consolidated statements of comprehensive (loss) income.

The relevant translation rates are as follows: for thenine months ended* September 30, 2024*, closing rate at $1.31 US$: GBP, quarterly average rate at $1.30 US$: GBP, for thenine months ended* September 30, 2023*, closing rate at $1.23 US$: GBP, quarterly average rate at $1.26 US$: GBP, for the year ended* December 31, 2023* closing rate at 1.27 US$: GBP, yearly average rate at 1.24 US$: GBP.

Unearned Revenue

Contract liabilities are shown separately in the condensed consolidated balance sheets as current liabilities. At* September 30, 2024* and* December 31, 2023*, we had contract liabilities of approximately $104,000 and $42,000, respectively.

9

Direct and Indirect Remuneration (“DIR”) Fees

Progressive Care reports DIR fees as a reduction of revenue on the accompanying Condensed Consolidated Statements of Comprehensive (Loss) Income. DIR fees are fees charged by PBMs to pharmacies for network participation as well as periodic reimbursement reconciliations. The Company accrues an estimate of PBM fees, including DIR fees, which are assessed or expected to be assessed by payers at some point after adjudication of a claim, as a reduction of prescription revenue at the time revenue is recognized. Changes in the estimate of such fees are recorded as an adjustment to revenue when the change becomes known. Through* December 31, 2023,for some PBMs, DIR fees were charged at the time of the settlement of a pharmacy claim. Other PBMs donot* determine DIR fees at the claim settlement date, and therefore DIR fees are collected from pharmacies after claim settlement, often as clawbacks of reimbursements based on factors that vary from plan to plan. For example,two PBMs calculate DIR fees on a trimester basis and charge the Company for these fees as reductions of reimbursements paid to the Companytwo tothree months after the end of the trimester (e.g., DIR fees for* September -** December 2023claims were clawed back by these PBMs in May -** June 2024).As of December 31, 2023,DIR fees that werenot* collected at the time of claim settlement, the Company recorded an accrued liability for estimated DIR fees that were fully collected by the PBMs by the end of thesecond quarter of2024. Effective* January 1, 2024,*all PBMs began charging DIR fees at the time of the settlement of a pharmacy claim.

Recent Accounting Pronouncements

Accounting Pronouncements Issued butnot yet Adopted**

In* November 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2023-07, “Segment Reporting (Topic280*) - Improvements to Reportable Segment Disclosures” (“ASU2023-07”), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. ASU2023-07 is required to be adopted for annual periods beginning after* December 15, 2023,and interim period within fiscal years beginning after December 15, 2024,with early adoption permitted. The Company will adopt the standard in its interim reporting beginning withQ1*-2025, and the Company will adopt the standard in its annual reporting for the year ending* December 31, 2024.The Company expects that the adoption of the standard willnot* have a material impact on our consolidated financial statements but will enhance our current disclosures.

In* December 2023,the FASB issued ASU2023*-09, “Income Taxes (Topic740)—Improvements to Income Tax Disclosure” (“ASU2023-09”), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. ASU2023-09 is required to be adopted for annual periods beginning after* December 15, 2024,with early adoption permitted. The Company will adopt this accounting standard update effective January 1, 2025.The Company expects that the adoption of the standard willnot* have a material impact on our consolidated financial statements.

Other accounting standards that have been issued or proposed by FASB that donot require adoption until a future date arenot expected to be relevant or have a material impact on the condensed consolidated financial statements upon adoption.

Subsequent Events

On* October 1, 2024,the Company completed the Merger of Progressive Care, which Progressive Care became a wholly-owned subsidiary of the Company. See “Note2. Basis of Presentation and Principles of Consolidation*” for more details of the transaction.

On* October 15, 2024,*the Company settled its ongoing lawsuit with Mr. Thomas Seifert, the Company’s former Chief Financial Officer. Under the terms of the settlement, the Company agreed to pay to Mr. Seifert $150,000 and to reimburse him for legal costs in the amount of $600,000. In exchange, the Company and Mr. Seifert each agreed to dismiss the lawsuit with prejudice and to release the other party from all claims.

The Company has evaluated subsequent events through the date of this filing, the date the condensed consolidated financial statements were available to be issued.

10

Note4. Fair Value

Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the followingthree levels of inputs that* may*be used to measure fair value:

Level1: Quoted prices in active markets for identical assets or liabilities.

Level2: Inputs other than Level1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that arenot active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level3: Unobservable inputs that are supported by little orno market activity and that are significant to the fair value of the assets and liabilities.

The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments:

Identifiable Intangible Assets

The initial recognition of Progressive Care’s identifiable intangible assets, resulting from the acquisition on* July 1, 2023and the application of push-down accounting, were measured using Level3* inputs. The fair value at the date of acquisition was approximately $14.7 million.

The initial recognition of the Outfitter identifiable intangible assets, resulting from the acquisition on* April 1, 2024,were measured using Level3* inputs. The fair value at the date of acquisition was approximately $0.6 million.

11

Note5. Business Acquisition

On* March 25, 2024,the Company entered into a Stock Purchase Agreement with James T. McKinley, pursuant to which the Company agreed to purchase all of the issued and outstanding shares of common stock of Outfitter. The closing of the transaction occurred on April 1, 2024.*

The following table summarizes the consideration transferred to acquire Outfitter and the amounts of identified assets acquired and liabilities assumed at the acquisition date (in thousands):

(1)10-year amortization period

(2)5-year amortization period

(3) Under federal tax law, previously unidentified finite lived intangible assets recognized from a business combination haveno tax basis and therefore arenot amortized for tax purposes. This tax position created a book/tax basis difference at* April 1, 2024,the date of the business combination transaction. Therefore, an approximate $0.1 million deferred tax liability was recorded at April 1, 2024*as a result of the book/tax basis difference for the finite lived intangible assets.

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after NextPlat’s acquisition of Outfitter. The goodwill isnot deductible for tax purposes.

The initial recognition of Outfitter's identifiable intangible assets, resulting from the acquisition on* April 1, 2024,were measured using Level3* inputs. The fair value at the date of acquisition was approximately $0.6 million and were estimated by applying an income approach. The fair value estimates for the identifiable intangible assets are based on (1) an assumed discount rate of 37.3% (2) an assumed capitalization rate of 34.3% (3) assumed long-term growth rate of 3.0% (4) an assumed royalty rate of 1.8% (5) an assumed tax rate of 26.3% (6) an assumed risk free rate of 4.5% (7) an assumed equity risk premium of 6.5% (8) an assumed company specific risk premium rate of 22.5% (9) an assumed beta of 0.82.

12

Note6. Revenue

The following table disaggregates net revenues by categories (in thousands):

13

Note7. Loss per Share

Net income (loss) per common share is calculated in accordance with ASC Topic260: Earnings per Share (“ASC260”). 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 doesnot 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.

The components of basic and diluted EPS were as follows (in thousands, except per share data).

Note8. Accounts Receivable

Accounts receivable consisted of the following (in thousands):

The Company decreased the allowance for credit losses in the amount of approximately $0.1 million and $12,000 for thenine months ended* September 30, 2024and2023*, respectively.

Accounts receivable – trade, net for the Company as of* January 1, 2023and September 30, 2023* were approximately $0.4 million and $7.8 million, respectively.

14

Note9. Inventory

Inventory consisted of the following (in thousands):

Note10. Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):

Depreciation expense was approximately $0.6 million and $0.5 million for thenine months ended* September 30, 2024and2023*, respectively.

15

Note11. Goodwill and Intangible Assets, net

Goodwill

During thenine months ended* September 30, 2024,the Company concluded that the carrying amount of the Healthcare Operations reporting segment exceeded its fair value, resulting in the recognition of a non-cash goodwill impairment charge of approximately $0.7 million. An interim impairment assessment was considered necessary as a result of the sustained decline in the Healthcare Operations stock price and related market capitalization. The goodwill impairment charge is reflected in Impairment loss in the Condensed Consolidated Statements of Comprehensive (Loss) Income. With the assistance of athird*-party valuation firm, the fair value of the Healthcare Operations reporting segment was determined using an income approach whereby the fair value was calculated utilizing discounted estimated future cash flows (level3 nonrecurring fair value measurement). The income approach requires several assumptions including estimation of future cash flows, which is dependent on internally-developed forecasts of revenue and profitability, estimation of the long-term rate of growth for the business, estimation of the useful life over which cash flows will occur, and determination of the weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit. The long-term growth rate used in the impairment was 3.0% and the weighted average cost of capital used in the impairment was 13.5%.

The following table reflects changes in the carrying amount of goodwill during the periods presented by reportable segments (in thousands):

(1) Decrease related to book tax basis difference of intangible assets arising for the business acquisition of Outfitter.

16

Intangibles

During thenine months ended* September 30, 2024,the Company performed an impairment assessment of long-lived assets as it relates to the Healthcare Operations reporting segment due to the decline in future projected revenues and cash flows. As a result, the Company completed a recoverability test and concluded that the asset groups werenot* fully recoverable as the undiscounted expected future cash flows didnot exceed their carrying amounts. The Company, with the assistance of athird-party valuation firm, determined the fair value of the asset groups using an income approach utilizing undiscounted estimated future cash flows (level3 nonrecurring fair value measurement). The income approach requires several assumptions including estimation of future cash flows, which is dependent on internally-developed forecasts of revenue and profitability, and estimation of the useful life over which cash flows will occur. The carrying amount of certain assets in the asset group exceeded the fair value, resulting in the recognition of a non-cash impairment charge to intangible assets of approximately $12.8 million for thenine months ended* September 30, 2024 (*reflected in Impairment loss in the Condensed Consolidated Statements of Comprehensive (Loss) Income).

Intangible assets, net consisted of the following (in thousands):

17

A summary of the changes to the gross carrying amount, accumulated amortization, and net book value of total intangible assets by reporting unit during thenine months ended* September 30, 2024* were as follows (in thousands):

For thenine months ended* September 30, 2024and2023*, the Company recognized amortization expense of approximately $1.7 million and $0.7 million, respectively.

The following table represents the total estimated future amortization of intangible assets for thefive succeeding years and thereafter as of* September 30, 2024* (in thousands):

18

Note12. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following (in thousands):

Note13. Notes Payable

Notes payable consisted of the following (in thousands):

19

(A) Mortgage Note Payable – collateralized

In2018, Progressive Care closed on the purchase of land and building located at400 Ansin Boulevard, Hallandale Beach, Florida. The purchase price was financed in part through a mortgage note and security agreement entered into with a commercial lender in the amount of $1,530,000. The promissory note is collateralized by the land and building, bears interest at a fixed rate of 4.75% per annum, matures on* December 14, 2028and is subject to a prepayment penalty. Principal and interest will be repaid through 119 regular payments of $11,901 that began in January 2019,with the final payment of all principal and accrued interestnot* yet paid on* December 14, 2028.*Note repayment is guaranteed by Progressive Care Inc.

(B) Note Payable – Uncollateralized

As of* September 30, 2024* the uncollateralized note payable represents a non-interest-bearing loan that is due on demand from an investor.

(C) Notes Payable – Collateralized

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”. Thefirst* repayment of£4,166.67 (exclusive of interest) was made13 month(s) after* July 16, 2020.Voluntary prepayments are allowed with5* 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. 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.

In* April 2021,Progressive Care entered into a note obligation with a commercial lender, the proceeds from which were used to purchase pharmacy equipment in the amount of approximately $30,000. During September 2021,pharmacy equipment was returned since the installation was cancelled and the note was amended. The amended promissory note payable requires 46 monthly payments of $331, including interest at 6.9%. The balance outstanding as of September 30, 2024* and* December 31, 2023* on the note payable was approximately $3,000 and $6,000, respectively.

In* July 2022,Progressive Care entered into a note obligation with a commercial lender, the proceeds from which were used to purchase pharmacy equipment in the amount of approximately $90,000. The terms of the promissory note payable require 60 monthly payments of $1,859, including interest at 8.78% starting January 2023.The balance outstanding on the note payable was approximately $62,000 and $71,000 as of September 30, 2024* and* December 31, 2023*, respectively.

In* September 2022,Progressive Care entered into a note obligation with a commercial lender, the proceeds from which were used to purchase a vehicle in the amount of approximately $25,000. The terms of the promissory note payable require 24 monthly payments of $1,143, including interest at 8.29% starting October 2022.The note was paid in full as of September 30, 2024.The balance outstanding on the note payable was approximately $10,000 as of December 31, 2023*.

20

Principal outstanding as of* September 30, 2024*, is expected to be repayable as follows (in thousands):

**Note14. **Equity

Stock-based compensation expense is recorded in selling, general and administrative expense in the Condensed Consolidated Statements of Comprehensive (Loss) Income. For thenine months ended* September 30, 2024and2023*, stock-based compensation expense was approximately $1.6 million and $4.6 million, respectively. There wereno income tax benefits recognized from stock-based compensation during thenine months ended* September 30, 2024and2023* due to cumulative losses and valuation allowances.

Preferred Stock

We have authorized 3,333,333 shares of $0.0001 par value of preferred stock. As of* September 30, 2024* and* December 31, 2023* there wereno shares of preferred stock issued and outstanding.

Common Stock

We have authorized 50,000,000 shares of $0.0001 par value common stock. As of* September 30, 2024*,18,993,146 shares of common stock were issued and outstanding.

Listing on the Nasdaq Capital Market

Our common stock and warrants have been trading on the Nasdaq Capital Market under the symbols “NXPL” and “NXPLW,” respectively, since* January 21, 2022.Prior to January 21, 2022,*our common stock and warrants were traded on the Nasdaq Capital Market under the symbols “OSAT” and “OSATW,” respectively.

**** April 2023Private Placement of Common Stock**

On* 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 Section4*(a)(2) of the Securities Act and Rule506 of Regulation D promulgated under the Securities Act and corresponding provisions of state securities or “blue sky” laws. The Investor represented that it is acquiring the Common Stock for investment only andnot with a view towards, or for resale in connection with, the public sale or distribution thereof. Accordingly, the Common Stock hasnot 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.

21

Note15. Related Party Transactions

Progressive Care Inc.

Following 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, 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 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. (“Iliad”) a Secured Convertible Promissory Note, dated March 6, 2019,made by Progressive Care to Iliad (the “Note”). The accrued and unpaid principal and interest under the note at the time of the purchase was approximately $2.8 million. The aggregate purchase price paid to Iliad for the Note was $2.3 Million of which NextPlat contributed $1.0 million and 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 105,000 shares of its common stock to the purchasers of the Note, of which NextPlat, Charles Fernandez and Rodney Barreto, received 45,653,18,261, and 18,261 shares, respectively, in each case after giving effect to a1*-for-200 reverse stock split enacted by Progressive Care on* December 30, 2022.*

On* February 1, 2023,the Company entered into a Management Services Agreement with Progressive Care to provide certain management and administrative services to Progressive Care for a $25,000 per month fee. During May 2023the management fee was reduced to $20,000 per month. During thenine* months ended* September 30, 2023*, the Company received approximately $175,000 from Progressive Care as management fees. The management fees in the amount of approximately $180,000 for thenine months ended* September 30, 2024* are eliminated as a result of the Progressive Care consolidation as of* July 1, 2023.*

On* May 5, 2023,the Company entered into a Securities Purchase Agreement with Progressive Care, pursuant to which the Company agreed to purchase 455,000 newly issued Units of securities from Progressive Care at a price per Unit of $2.20 for an aggregate purchase price of $1.0 million (the “Unit Purchase”). Each Unit consists ofone* share of Progressive Care common stock, par value $0.0001 per share, andone common stock purchase warrant to purchase a share of Progressive Care common Stock (the “PIPE Warrants”)

On* May 9, 2023,pursuant to the Debt Conversion Agreement (“DCA”), the Company received 570,599 shares of Progressive Care common stock, Charles M. Fernandez received 228,240 shares of Progressive Care common stock, and Rodney Barreto received 228,240 shares of Progressive Care common stock. To induce the approval of the debt conversion pursuant to the DCA, Messrs. Fernandez and Barreto received Inducement Warrants to purchase 190,000 and 30,000 shares of Progressive Care common stock, respectively. In addition, the Company and Messrs. Fernandez and Barreto also received a common stock purchase warrant to purchaseone* share of Progressive Care common stock for each share of Progressive Care common stock they received upon conversion of the Note.

22

On* July 1, 2023,*the Company, Charles M. Fernandez, and Rodney Barreto exercised common stock purchase warrants and were issued shares of Progressive Care common stock. The Company exercised common stock purchase warrants on a cashless basis and was issued 402,269 shares of Progressive Care common stock. The Company also exercised common stock purchase warrants on a cash basis and paid consideration in the amount of $506,000 and was issued 230,000 shares of Progressive Care common stock. Mr. Fernandez exercised common stock purchase warrants on a cashless basis and was issued 211,470 shares of Progressive Care common stock. Mr. Barreto exercised common stock purchase warrants on a cashless basis and was issued 130,571 shares of Progressive Care common stock. After the exercise of the warrants, NextPlat and Messrs. Fernandez and Barreto collectively owned approximately 53% of Progressive Care’s voting stock.

Also, on* July 1, 2023,*NextPlat and Messrs. Fernandez and Barreto, entered into a voting agreement whereby at any annual or special shareholders meeting of Progressive Care’s stockholders, and whenever the holders of Progressive Care’s common stock act by written consent, Messrs. Fernandez and Barreto agreed to vote all of the shares of Progressive Care common stock (including any new shares acquired after the date of the voting agreement or acquired through the conversion of securities convertible into Progressive Care common stock) that they own, directly or indirectly, in the same manner that NextPlat votes its shares of Progressive Care common stock. The voting agreement is irrevocable and perpetual in term.

Next Borough Capital Fund, LP.

On* July 7, 2023,the Company entered into an unsecured promissory note agreement with Next Borough Capital Management, LLC (“the Borrower”), whereby the Company loaned $250,000 to the Borrower. The note bears interest at an annual rate of 7%. The outstanding principal balance of the note plus all accrued unpaid interest was due and payable on July 7, 2024,the Maturity Date. The Maturity Date was extended until November 8, 2024,which the note was paid in full. Each of the Company, Charles M. Fernandez, Robert D. Keyser, Jr., eAperion Partners, LLC, and a revocable trust of Rodney Barreto are members of the Borrower. The net realizable value of the note as of September 30, 2024* was approximately $206,000, net of an allowance of approximately $63,000. The balance as of* December 31, 2023* was approximately $256,000. The note is recorded in Notes receivable due from related party in the Condensed Consolidated Balance Sheets.

Other

On* July 12, 2022,the Company hired Lauren Sturges Fernandez, the spouse of Mr. Fernandez, as Manager of Digital Assets. Mrs. Fernandez is an at-will employee with an annual salary of $95,000. On September 22, 2022,Mrs. Fernandez’s title was changed to Chief of Staff and Special Assistant to the Chairman of the Board, withno* 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.

Note16. Commitments and Contingencies

Litigation

On* June 22, 2021,Thomas Seifert’s employment as the Company’s Chief Financial Officer was terminated for cause. Mr. Seifert asserts that the termination wasnot* for cause and that he is owed compensation payable under his* June 2, 2021employment agreement. The Company’s position is that Mr. Seifert isnot* 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, butnot limited to, breach of the employment agreement, breach of his fiduciary duties, fraud in the inducement in connection with the employment agreement, fraudulent misrepresentation, and constructive fraud. A detailed recitation of the Company’s factual allegations supporting these claims can be found in the Company’s Second Amended Complaint, filed* June 21, 2022.Subsequent to September 30, 2024,the Company settled with Mr. Seifert on October 15, 2024.*Under the terms of the settlement, the Company agreed to pay to Mr. Seifert $150,000 and to reimburse him for legal costs in the amount of $600,000. In exchange, the Company and Mr. Seifert each agreed to dismiss the lawsuit with prejudice and to release the other party from all claims.

On* June 17, 2024,*Progressive Care was notified of a potential claim by a former employee who allegedly suffered a loss due to an alleged breach by Progressive Care of such former employee's employment contract. Management believes, based on discussions with its legal counsel, that Progressive Care has meritorious defenses against the former employee’s claim. Since receipt of the notice of the claim, Progressive Care filed a petition for arbitration against the former employee, asserting that it was the employee who breached the employment contract. Progressive Care will prosecute its claims and will defend any counterclaims vigorously as Progressive Care believes it will prevail on the merits. At this time, we cannot reasonably estimate the amount of the loss.

From time to time, the Company* maybecome involved in litigation relating to claims arising out of our operations in the normal course of business. The Company isnot* 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.

23

Note17. Leases

The Company has entered into a number of lease arrangements under which the Company is the lessee. These leases are classified as operating leases. In addition, the Company has elected the short-term lease practical expedient in ASC Topic842 related to real estate leases with terms ofone year. The following is a summary of the Company’s lease arrangements.

Finance Lease Agreements

In* May 2018,Progressive Care entered into a finance lease obligation to purchase pharmacy equipment with a cost of approximately $115,000. The terms of the lease agreement require monthly payments of $1,678 plus applicable tax over 84 months ending March 2025*including interest at the rate of 6%.

Operating Lease Agreements

Right-of-use (“ROU”) assets for operating leases are periodically reduced by impairment losses. We use the long-lived assets impairment guidance in ASC Subtopic360-10, 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* September 30, 2024* and* December 31, 2023*, we have recognized impairment losses for ROU assets of approximately $0.1 million and $0, respectively.

We monitor for events or changes in circumstances that require a reassessment ofone of our leases. When a reassessment results in the re-measurement 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.

On* December 2, 2021,NextPlat entered into a 62-month lease for 4,141 square feet of office space in Florida (“Florida Lease”), for $186,345 annually. The rent increases 3% annually. The Florida Lease commenced upon occupancy on June 13, 2022,and will expire on August 31, 2027.The Florida Lease doesnot* 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.

For 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,which expired October 31, 2023and was renewed for an additional twelve months. On August 1, 2024we relocated from our previous location in Poole, England to a new facility in Poole and entered into a new lease for office and warehouse space. This is athree-year lease and expires on July 31, 2027.The annual rent is approximately£14,000 through July 31, 2025,approximately£30,000 through July 31,2026, and approximately£26,000 through July 31, 2027.*

Progressive Care entered into a lease agreement for its Orlando pharmacy in* August 2020.The term of the lease is 66 months with a termination date of February 2026.The lease agreement calls for monthly payments that began in February 2021,*of $4,310, with an escalating payment schedule each year thereafter.

Progressive Care leases its North Miami Beach pharmacy location under an operating lease agreement with a lease commencement date in* September 2021.The term of the lease is 60 months with a termination date in August 2026.*The lease calls for monthly payments of $5,237, with an escalating payment schedule each year thereafter.

24

Progressive Care also leases its Palm Beach County pharmacy locations under operating lease agreements expiring in* February 2025.*

In* June 2023,NextPlat entered into a 36-months lease to leasetwenty-five* (25) hours in a Phenom300 aircraft, for approximately $200,650 annually. The rent increases 3% annually. The lease commenced on* June 7, 2023.In June 2024,*NextPlat terminated the lease and paid a lease termination fee in the amount of $0.1 million. The remaining carrying value, net of the ROU asset and liability in the amount of $0.1 million, was written off and recorded in selling, general and administrative expense on the Condensed Consolidated Statements of Comprehensive (Loss) Income.

Note18. Reportable Segments

The Company hastwo reportable segments: (i) e-Commerce Operations, which involves acquiring and leasing, primarily an 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, and other related businesses and (ii) Healthcare Operations, which providesthird party administrator (TPA), data management, COVID-19 related diagnostics and vaccinations, prescription pharmaceuticals, compounded medications, telepharmacy services, anti-retroviral medications, medication therapy management, the supply of prescription medications to long-term care facilities, medication adherence packaging, contracted pharmacy services for340B covered entities under the340B Drug Discount Pricing Program, and health practice risk management.

The Company evaluates the performance of each of the segments based on profit or loss after general and administrative expenses. While the Company believes there are synergies between thetwo business segments, the segments are managed separately because each requires different business strategies.

The following tables present a summary of the reportable segments (in thousands):

25

26

27

28

Note19. Concentrations

e-Commerce Operations concentrations:

Customers:

Sales to customers through Amazon accounted for 35.8% and 49.1% of the Company’s revenues during thenine months ended* September 30, 2024and2023*, respectively.No other customer accounted for10% or more of the Company’s revenues for either period.

Suppliers:

The following table sets forth information as to each supplier that accounted for10% or more of the Company’s purchases for thethree andnine months ended* September 30, 2024and2023* (in thousands):

29

Geographic:

The following table sets forth revenue as to each geographic location (in thousands):

30

Healthcare operations concentrations:

Suppliers:

Progressive Care had significant concentrations withone vendor. The purchases from this significant vendor were 98.0% of total vendor purchases for thenine months ended* September 30, 2024*.

Customers:

Progressive Care trade receivables are primarily from prescription medications billed to various insurance providers. Ultimately, the insured is responsible for payment should the insurance companynot reimburse Progressive Care.

Progressive Care derives a significant portion of sales from prescription drug sales reimbursed through prescription drug plans administered by PBM companies. Prescription reimbursements from ourthree most significant PBMs were as follows: