NextPlat Corp

Previous wording

Outfitter provides consumers, commercial and government customers, with advanced satellite-based connectivity solutions from leading brands, including Iridium, Inmarsat and Globalstar.

Current wording

On April 1, 2024, the Company acquired all of the issued and outstanding shares of common stock of Outfitter Satellite, Inc. (“Outfitter”). Outfitter provides consumers, commercial and government customers, with advanced satellite-based connectivity solutions from leading brands, including Iridium, Inmarsat and Globalstar.

Previous wording

During the first quarter of 2025, the introduction of U.S. and Chinese tariffs on certain imported goods did not have a material impact on our e-Commerce business operations or financial results. However, starting in the second quarter of 2025, certain goods we sell in the U.S. that are imported may become subject to these tariffs which could adversely affect our costs or pricing strategies. Only approximately 35% of our total e-Commerce sales take place within the United States. The OPKO products sold by us in China are manufactured in Spain and are not currently impacted by Chinese tariffs, however, the ongoing trade tensions may impact the potential success and execution of future projects planned in China under our Florida E-Commerce Development Program, including the launch of our Florida Sunshine range of vitamins.

Current wording

During the first half of 2025, the introduction of U.S. and Chinese tariffs on certain imported goods did not have a material impact on our e-Commerce business operations or financial results. However, starting in the second quarter of 2025, certain goods we sell in the U.S. that are imported became subject to these tariffs which affected our costs and pricing strategies. Only approximately 33% of our total e-Commerce sales take place within the United States. The OPKO products sold by us in China are manufactured in Spain and are not currently impacted by Chinese tariffs, however, the ongoing trade tensions may impact the potential success and execution of future projects planned in China under our Florida E-Commerce Development Program, including the launch of our Florida Sunshine range of vitamins.

Previous wording

Our healthcare operations are focused on complex chronic diseases that generally require multi-year or lifelong therapy, which drives recurring revenue and sustainable growth. Our pharmacy services revenue growth is from expanding their services, new drugs coming to market, new indications for existing drugs, volume growth with current clients, and additions of new customers due to their focus on higher patient engagement, benefit of free delivery to the patient, and clinical expertise. The pharmacies also expanded revenue growth through the signing of new contract pharmacy service and data management contracts with 340B covered entities.

Current wording

Our healthcare operations are focused on complex chronic diseases that generally require multi-year or lifelong therapy, which drives recurring revenue and sustainable growth. Our pharmacy services revenue historical source of growth have included expanding our services, new drugs coming to market, new indications for existing drugs, volume growth with current clients, and additions of new customers due to their focus on higher patient engagement, benefit of free delivery to the patient, and clinical expertise. The pharmacies also expanded revenue growth through the signing of new contract pharmacy service and data management contracts with 340B covered entities.

Previous wording

The significant accounting policies of the Company were described in Note 3. to the Audited Consolidated Financial Statements included in the Company’s Form 10-K for the fiscal year ended December 31, 2024. There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2024 Form 10-K. The most recently adopted accounting pronouncements and accounting pronouncements to be adopted by the Company are described in Note 3 in the Notes to our Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Current wording

The significant accounting policies of the Company were described in Note 3. to the Audited Consolidated Financial Statements included in the Company’s Form 10-K for the fiscal year ended December 31, 2024. There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2024 Form 10-K. The most recently adopted accounting pronouncements and accounting pronouncements to be adopted by the Company are described in Note 3 in the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Previous wording

For the three months ended March 31, 2025 and 2024, we recognized overall revenue from operations of approximately $14.5 million and $17.5 million, respectively, an overall decrease of approximately $3.0 million for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024. The decrease in revenue was primarily attributable to the decrease of approximately $3.1 million from Healthcare Operations, partially offset by the increase of approximately $0.1 million from e-Commerce Operations.

Current wording

For the three months ended June 30, 2025 and 2024, we recognized overall revenue from operations of approximately $13.2 million and $17.0 million, respectively, an overall decrease of approximately $3.8 million for the three months ended June 30, 2025, when compared to the three months ended June 30, 2024. The decrease in revenue was primarily attributable to the decrease of approximately $4.4 million from Healthcare Operations, partially offset by the increase of approximately $0.6 million from e-Commerce Operations.

Previous wording

Gross profit margins decreased from approximately 27.8% for the three months ended March 31, 2024, to approximately 23.8% for the three months ended March 31, 2025. The decrease in gross profit margins during the first quarter of 2025 compared to the same period in 2024, was primarily attributable to the decrease in 340B contract revenue in Healthcare Operations, which decreased for the first quarter of 2025 to approximately 23.8% from 27.7% when compared to the same period in 2024 (see further discussion below). The gross profit margins for e-Commerce Operations decreased for the first quarter of 2025 to approximately 24.1% from 28.1% when compared to the same period in 2024 due to a service provider airtime contract that expired on December 31, 2024, which introduced new airtime costs beginning January 1, 2025, and temporary rate reductions for some customers affected by ongoing service interruptions.

Current wording

Gross profit margins decreased from approximately 34.5% for the three months ended June 30, 2024, to approximately 21.8% for the three months ended June 30, 2025. The decrease in gross profit margins during the second quarter of 2025 compared to the same period in 2024, was attributable to the overall decline in gross profit in both operating segments. The gross profit margins for Healthcare Operations decreased for the second quarter of 2025 to approximately 19.9% from 35.2% when compared to the same period in 2024 and was primarily attributable to the decrease in pharmacy prescriptions filled and 340B revenue as well as the continued industry-wide impact of drug price increases outpacing reimbursement rate adjustments. The gross profit margins for e-Commerce Operations decreased for the second half of 2025 to approximately 25.9% from 31.6% when compared to the same period in 2024 due to a service provider airtime contract that expired on December 31, 2024, which introduced new airtime costs beginning January 1, 2025, and temporary rate reductions for some customers affected by ongoing service interruptions.

Previous wording

Loss before other (income) expense decreased by approximately $0.4 million for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024, as a result of the decrease in operating expenses of approximately $1.8 million and the decrease in gross profit of approximately $1.4 million See detailed discussion below.

Current wording

Loss before other (income) expense decreased by approximately $9.1 million for the three months ended June 30, 2025, when compared to the three months ended June 30, 2024, as a result of the decrease in operating expenses of approximately $12.0 million and the decrease in gross profit of approximately $3.0 million See detailed discussion below.

Previous wording

Revenue, net for the three months ended March 31, 2025, consisted of e-Commerce sales of satellite phones, tracking devices, accessories, and airtime plans, pharmacy prescription revenues, and 340B contract revenues. For the three months ended March 31, 2025, overall revenues were approximately $14.5 million compared to $17.5 million for the three months ended March 31, 2024, a decrease in of approximately $3.0 million or 17.0%.

Current wording

Revenue, net for the three months ended June 30, 2025, consisted of e-Commerce sales of satellite phones, tracking devices, accessories and airtime plans, pharmacy prescription revenues, and 340B contract revenues. For the three months ended June 30, 2025, overall revenues were approximately $13.2 million compared to $17.0 million for the three months ended June 30, 2024, a decrease in of approximately $3.8 million or 22.1%.

Previous wording

Total pharmacy prescription and other revenue, net of PBM fees, was approximately $10.1 million and $11.3 million for the three months ended March 31, 2025 and 2024, respectively, a decrease of approximately $1.2 million, primarily attributable to the decrease in pharmacy prescriptions filled of approximately 107,000 versus 134,000 in the prior year period. The decline in prescription volume during the first quarter of 2025 was influenced in part by changes in provider relationships and shifts in patient flow due to insurance network adjustments or provider decisions to align with different pharmacy partners.

Current wording

Total pharmacy prescription and other revenue, net of PBM fees, was approximately $8.2 million and $10.5 million for the three months ended June 30, 2025 and 2024, respectively, a decrease of approximately $2.3 million, primarily attributable to the decrease in pharmacy prescriptions filled of approximately 91,000 versus 133,000 in the prior year period. The decline in prescription volume during the second quarter of 2025 was influenced in part by the continued changes in provider relationships and shifts in patient flow due to insurance network adjustments or provider decisions to align with different pharmacy partners.

Previous wording

Pharmacy 340B contract revenues were approximately $1.4 million and $3.3 million for the three months ended March 31, 2025 and 2024, respectively, a decrease of approximately $1.9 million, due to certain relationships transitioning to other pharmacy partners, one covered entity opening an in-house pharmacy, and another covered entity no longer participates in the 340B program.

Current wording

Pharmacy 340B contract revenues were approximately $1.0 million and $3.0 million for the three months ended June 30, 2025 and 2024, respectively, a decrease of approximately $2.0 million, due to certain relationships transitioning to other pharmacy partners, some covered entities opened in-house pharmacies, and another covered entity no longer participates in the 340B program.

Previous wording

Total operating expenses for the three months ended March 31, 2025, were approximately $4.9 million, a decrease of approximately $1.8 million, or 26.2%, from total operating expenses for the three months ended March 31, 2024, of approximately $6.7 million. Factors contributing to the decrease are described below.

Current wording

Total operating expenses for the three months ended June 30, 2025, were approximately $4.7 million, a decrease of approximately $12.0 million, or 71.9%, from total operating expenses for the three months ended June 30, 2024, of approximately $16.8 million. Factors contributing to the decrease are described below.

Previous wording

Salaries, wages and payroll taxes were approximately $2.7 million and $3.3 million for the three months ended March 31, 2025 and 2024, respectively, a decrease of approximately $0.6 million or 18.0%. The decrease was attributable to the decrease of stock-based compensation for non-recurring grants fully vested.

Current wording

Salaries, wages and payroll taxes were approximately $2.6 million and $3.5 million for the three months ended June 30, 2025 and 2024, respectively, a decrease of approximately $0.9 million or 26.2%. The decrease was attributable to the decrease of stock-based compensation for non-recurring grants fully vested of approximately $0.5 million, a decrease in executive compensation of approximately $0.1 million, and a decrease in total headcount of approximately $0.3 million.

Previous wording

Professional fees include expenses for legal fees, accounting services fees, consulting fees, and public company expenses. Professional fees were approximately $0.6 million and $1.0 million for the three months ended March 31, 2025 and 2024, respectively, a decrease of approximately $0.4 million or 38.6%. The decrease was mainly attributable to the legal and consulting fees as it related to the merger of Progressive Care of approximately $0.4 million in the prior year period.

Current wording

Professional fees include expenses for legal fees, accounting services fees, consulting fees, and public company expenses. Professional fees were approximately $0.5 million and $1.0 million for the three months ended June 30, 2025 and 2024, respectively, a decrease of approximately $0.5 million or 48.7%. The decrease was mainly attributable to the decrease in accounting services fees of approximately $0.2 million, a decrease in director fees of approximately $0.1 million, and a decrease in legal and consulting fees of approximately $0.2 million.

Previous wording

Intangible asset amortization was approximately $26,000 and $0.7 million for the three months ended March 31, 2025 and 2024, respectively, a decrease of approximately $0.7 million or 96.3%. The decrease was attributable to the decrease in the carrying amount of intangible assets when compared to the prior year period. Intangible assets, net as of March 31, 2025 and 2024 were approximately $0.5 million and $13.7 million. Intangible assets related to our Healthcare Operations were fully impaired throughout the year ending December 31, 2024. Intangible assets, net as of March 31, 2025 were related to our e-Commerce Operations due to the Outfitter acquisition in April 2024.

Current wording

Intangible asset amortization was approximately $25,000 and $0.7 million for the three months ended June 30, 2025 and 2024, respectively, a decrease of approximately $0.7 million or 96.4%. The decrease was attributable to the decrease in the carrying amount of intangible assets when compared to the prior year period. Intangible assets, net as of June 30, 2025 and 2024 were approximately $0.5 million and $4.6 million. Intangible assets related to our Healthcare Operations were fully impaired throughout the year ending December 31, 2024. Intangible assets, net as of June 30, 2025 were related to our e-Commerce Operations due to the Outfitter acquisition in April 2024.

Previous wording

We recorded net losses of approximately $1.3 million and $1.7 million for the three months ended March 31, 2025 and 2024, respectively. The change in net loss was a result of the factors described above.

Current wording

We recorded net losses of approximately $1.8 million and $10.7 million for the three months ended June 30, 2025 and 2024, respectively. The change in net loss was a result of the factors described above.

Previous wording

We recorded comprehensive loss for foreign currency translation adjustments of approximately $11,000 and $27,000 for the three months ended March 31, 2025 and 2024, respectively. The change was primarily attributed to exchange rate variances.

Current wording

We recorded comprehensive loss for foreign currency translation adjustments of approximately $58,000 and $27,000 for the three months ended June 30, 2025 and 2024, respectively. The change was primarily attributed to exchange rate variances.

Previous wording

Total e-Commerce revenues were approximately $3.0 million and $2.9 million for the three months ended March 31, 2025 and 2024, respectively, an increase of approximately $0.1 million driven by the growth in recurring airtime revenue, and the additional revenue from the Outfitter acquisition in 2024, however these were offset by a decline in hardware sales.

Current wording

Total e-Commerce revenues were approximately $7.1 million and $6.4 million for the six months ended June 30, 2025 and 2024, respectively, an increase of approximately $0.7 million driven by growth in recurring airtime revenue and hardware sales of approximately $0.6 million, and a favorable foreign currency impact of approximately $0.1 million.

Previous wording

Selling, general and administrative expenses remained flat at approximately $1.4 million for the three months ended March 31, 2025, when compared to the prior year period.

Current wording

Selling, general and administrative remained flat at approximately $2.9 million for the six months ended June 30, 2025, when compared to the prior year period.

Previous wording

Impairment loss for the three months ended March 31, 2024 of approximately $0.1 million was related to the write-down of a right-of-use asset as a result of taking the leased equipment out of service and not returning to service in the future.

Current wording

No impairment loss was recognized during the six months ended June 30, 2025. Impairment loss for the six months ended June 30, 2024 of approximately $9.9 million was related to a goodwill impairment of approximately $0.7 million, long-lived assets, primarily intangible assets, impairment of approximately $9.1 million, and the write-down of a right-of-use asset as a result of taking the leased equipment out of service and not returning to service in the future of approximately $0.1 million.

Previous wording

Our total other income remained flat at approximately $0.2 million for the three months ended March 31, 2025, when compared to the prior year period.

Current wording

Our total other income remained flat at approximately $0.1 million for the six months ended June 30, 2025, when compared to the prior year period.

Previous wording

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. As of March 31, 2025, we had a cash balance of approximately $17.7 million. Our working capital was approximately $22.1 million at March 31, 2025. We continue to closely monitor our cash position and operating expenditures. In response to recent trends and in alignment with our long-term strategic goals, we continue to implement a series of cost reduction measures aimed at improving operational efficiency and preserving liquidity. These measures include optimizing our delivery process and renegotiation of certain vendor agreements. As a result of these initiatives, we anticipate a reduction in our cash burn going forward. While we remain committed to investing in key growth initiatives, we are prioritizing financial discipline to ensure we maintain adequate liquidity to support ongoing operations and strategic objectives. In addition, management is exploring various options with respect to the Company’s operations, including a possible sale or merger of a portion of our business as well as strategic alternatives to diversify our business operations, including opportunities in additional services, joint ventures, and other collaborative structures.

Current wording

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. As of June 30, 2025, we had a cash balance of approximately $16.6 million. Our working capital was approximately $20.7 million at June 30, 2025. We continue to closely monitor our cash position and operating expenditures. In response to recent trends and in alignment with our long-term strategic goals, we continue to implement a series of cost reduction measures aimed at improving operational efficiency and preserving liquidity. These measures include optimizing our delivery process and renegotiation of certain vendor agreements. While we remain committed to investing in key growth initiatives, we are prioritizing financial discipline to ensure we maintain adequate liquidity to support ongoing operations and strategic objectives. In addition, management is exploring various options with respect to strategic alternatives to diversify our business operations, including opportunities in additional services, joint ventures, and other collaborative structures.

Previous wording

As of the date of this report, the Company’s existing cash resources are sufficient to support planned operations for the next 12 months. As a result, management believes that the existing financial resources are sufficient to continue operating activities for at least one year past the issuance date of the financial statements.

Current wording

As of the date of this report, the Company’s existing cash resources are sufficient to support planned operations for the next 12 months. As a result, management believes that the existing financial resources are sufficient to continue operating activities for at least one year past the issuance date of the consolidated financial statements.

Previous wording

Net cash flows used by operating activities totaled approximately $2.1 million and $2.7 million for the three months ended March 31, 2025 and 2024, respectively, and changed by approximately $0.6 million period over period. The favorable change of approximately $0.6 million was primarily attributable to the following:

Current wording

Net cash flows used in operating activities totaled approximately $3.1 million and $0.4 million for the six months ended June 30, 2025 and 2024, respectively, and changed by approximately $2.7 million period-over-period. The unfavorable change of approximately $2.7 million was primarily attributable to the following:

Previous wording

● an increase in cash received from e-Commerce Operations of approximately $0.1 million due to the year-over-year sales increase;

Current wording

● an increase in cash received from e-Commerce Operations of approximately $1.1 million due to the year-over-year sales increase;

Previous wording

● a decrease in cash received from Healthcare Operations of approximately $0.8 million due to the year-over-year sales decrease;

Current wording

● a decrease in cash received from Healthcare Operations of approximately $8.0 million due to the year-over-year sales decrease;

Previous wording

● a decrease in cash paid for inventory purchases and other costs of revenue of approximately $1.8 million primarily due to the decrease in Healthcare Operations revenue;

Current wording

● a decrease in cash paid for inventory purchases and other costs of revenue of approximately $4.1 million primarily due to the decrease in Healthcare Operations revenue;

Previous wording

● an increase in cash paid for other recurring operating expenses of approximately $0.3 million due to payments related to audit fees and other operating expenses;

Current wording

● an increase in cash paid for other recurring operating expenses of approximately $0.2 million due to the timing of payables; and

Previous wording

● and an increase in cash paid for other non-recurring expenses of approximately $0.2 million due to payments related to legal fees.

Current wording

● an increase in cash paid for other non-recurring expenses of approximately $0.2 million.

Previous wording

Net cash flows used in investing activities were approximately $22,000 and $63,000 for the three months ended March 31, 2025 and 2024, respectively. The cash outflow in 2025 and 2024 was attributable to the purchase of vehicles for our Healthcare Operations delivery fleet.

Current wording

Net cash flows provided by investing activities for the six months ended June 30, 2025 were approximately $0.1 million, which were attributable to the purchase and sales of vehicles for our Healthcare Operations delivery fleet. Net cash flows used in investing activities for the six months ended June 30, 2024 were approximately $1.0 million, primarily attributable to the acquisition of Outfitter.

Previous wording

Net cash flows used in financing activities were approximately $0.1 million for the three months ended March 31, 2025, primarily attributable to the repayment of notes payable. Net cash flows used in financing activities of approximately $1,000 for the three months ended March 31, 2024, primarily attributable to the repayment of notes payable, offset by capital contributions received.

Current wording

Net cash flows used in financing activities were approximately $0.3 million for the six months ended June 30, 2025, primarily attributable to the repayment of notes payable. Net cash flows used in financing activities were approximately $34,000 for the six months ended June 30, 2024, primarily attributable to the repayment of notes payable, offset by capital contributions received.

Previous wording

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.

Current wording

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are not reflected in our condensed consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.