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What changed in NextPlat Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of NextPlat Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+315 added−305 removedSource: 10-K (2025-03-24) vs 10-K (2024-04-11)

Top changes in NextPlat Corp's 2024 10-K

315 paragraphs added · 305 removed · 231 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

62 edited+7 added−12 removed102 unchanged
Biggest changeWe 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.
Biggest changeWe 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. 3 Table of Contents We 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.
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.
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 from airtime sales.
There is we believe a fast growing, multi-billion-dollar global market for a small and cost-effective solution for receiving and processing mobile voice and data communications from remote locations used in applications such as tracking vehicles or asset shipments, monitoring unattended remote assets or mobile security. Over the past two decades, the global mobile satellite services market has experienced significant growth.
We believe there is a fast-growing, multi-billion-dollar global market for a small and cost-effective solution for receiving and processing mobile voice and data communications from remote locations used in applications such as tracking vehicles or asset shipments, monitoring unattended remote assets or mobile security. Over the past two decades, the global mobile satellite services market has experienced significant growth.
There are substantial restrictions in federal and state laws on the use and sharing of patient data and ClearMetrX is in compliance with such laws. The ClearMetrX offerings include data management and Third-Party Administration (“TPA”) services for 340B covered entities, pharmacy data analytics, and programs to manage HEDIS Quality Measures including Medication Adherence.
There are substantial restrictions in federal and state laws on the use and sharing of patient data and ClearMetrX is in compliance with such laws. ClearMetrX offerings include data management and Third-Party Administration (“TPA”) services for 340B covered entities, pharmacy data analytics, and programs to manage HEDIS Quality Measures including Medication Adherence.
Healthcare stakeholders are often at odds about proper care techniques and this lack of alignment increases burdens on providers and patients alike and is associated with decreasing satisfaction with healthcare services and negative health outcomes. Growth Strategy We plan to grow our healthcare operations business by executing on the following key growth strategies: Data Management Services.
Healthcare stakeholders are often at odds about proper care techniques and this lack of alignment increases burdens on providers and patients alike and is associated with decreasing satisfaction with healthcare services and negative health outcomes. Our Healthcare Business Strategy We plan to grow our healthcare operations business by executing on the following key growth strategies: Data Management Services .
Competition to our Healthcare Operations Business Competitive Strengths We believe we are well positioned to continue to increase our market share based on the following competitive strengths: Adding value to all constituents. The value we deliver to all constituents is based upon our thousands of daily patient interactions.
Competition to our Healthcare Operations Business Our Competitive Strengths We believe we are well positioned to continue to increase our market share based on the following competitive strengths: Adding value to all constituents . The value we deliver to all constituents is based upon our thousands of daily patient interactions.
This process includes several activities such as performing patient assessments, creating medication treatment plans, monitoring the effectiveness of and adherence to prescribed therapies, and delivering documentation of these services to the patient’s physician to coordinate comprehensive care. Distribution Methods We currently deliver prescriptions throughout Florida and ship medications to residents in those states where we hold non-resident pharmacy licenses.
This process includes several activities such as performing patient assessments, creating medication treatment plans, monitoring the effectiveness of and adherence to prescribed therapies, and delivering documentation of these services to the patient’s physician to coordinate comprehensive care. Distribution Methods We currently deliver prescriptions throughout Florida and can ship medications to residents in those states where we hold non-resident pharmacy licenses.
Our data management services and health IT services can be used by customers across the U.S. and we expect to continue to invest in sales and marketing efforts for these services. Selectively Pursue Growth Through Strategic Acquisitions. We believe the specialty pharmacy industry is highly fragmented and provides numerous opportunities to expand through acquisitions.
Our data management services and health IT services can be used by customers across the U.S. and we expect to continue to invest in sales and marketing efforts for these services. Selectively Pursue Growth Through Strategic Acquisition s. We believe the specialty pharmacy industry is highly fragmented and provides numerous opportunities to expand through acquisitions.
We compete primarily on the basis of coverage, quality, portability, pricing and in the case of our e-commerce storefronts, availability of services and products. The competitors for our satellite telecommunications services and products are other resellers of leading satellite networks such as Iridium, Inmarsat, Thuraya and Globalstar, some of which are also our suppliers.
We compete primarily on the basis of coverage, quality, portability, pricing and in the case of our e-commerce storefronts, availability of services and products. The competitors for our satellite telecommunications services and products are other resellers of leading satellite networks such as Iridium, Inmarsat, Thuraya, Globalstar, and Starlink, some of which are also our suppliers.
Pharmco provides prescription pharmaceuticals, compounded medications, tele-pharmacy services, anti-retroviral medications, medication therapy management, the supply of prescription medications to long-term care facilities, contracted pharmacy services for 340B covered entities under the 340B Drug Discount Pricing Program, and health practice risk management.
Pharmco provides prescription pharmaceuticals, compounded medications, anti-retroviral medications, medication therapy management, the supply of prescription medications to long-term care facilities, contracted pharmacy services for 340B covered entities under the 340B Drug Discount Pricing Program, and health practice risk management.
Available Information We file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC also maintains an Internet site that contains annual, quarterly and current reports, proxy and information statements and other information that we (together with other issuers) file electronically. The SEC’s Internet site is www.sec.gov.
The SEC also maintains an Internet site that contains annual, quarterly and current reports, proxy and information statements and other information that we (together with other issuers) file electronically. The SEC’s Internet site is www.sec.gov.
If our pharmacy locations become subject to additional licensure requirements, are unable to maintain their required licenses or if states place burdensome restrictions or limitations on pharmacies, our ability to operate in the state would be limited, which could have an adverse impact on our business. 13 Table of Contents Other Laws Affecting Pharmacy Operations .
If our pharmacy locations become subject to additional licensure requirements, are unable to maintain their required licenses or if states place burdensome restrictions or limitations on pharmacies, our ability to operate in the state would be limited, which could have an adverse impact on our business. 11 Table of Contents Other Laws Affecting Pharmacy Operations .
While the offering of narrow and preferred networks is common across the country, there have been many lawsuits challenging the use of these type of arrangements due to the fact that they exclude certain providers from participating. The outcome of the challenges has varied, primarily based upon the interpretation of the state laws under which the challenges are made.
While the offering of narrow and preferred networks is common across the country, there have been many lawsuits challenging the use of these types of arrangements due to the fact that they exclude certain providers from participating. The outcome of the challenges has varied, primarily based upon the interpretation of the state laws under which the challenges are made.
Data management services will become an increasing driver of growth and development for us with its higher margins and diverse monetization pathways. Invest in Sales and Marketing. We are based in South Florida and will continue to grow our dispensing operations throughout the state, and there are opportunities to expand geographically throughout the rest of the country.
Data management services will become an increasing driver of growth and development for us with its higher margins and diverse monetization pathways. Invest in Sales and Marketing . Our pharmacies are based in South Florida and will continue to grow our dispensing operations throughout the state, and there are opportunities to expand geographically throughout the rest of the country.
For the year ended December 31, 2023, per EQuIPP®, a performance information management tool that provides standardized, benchmarked data to help shape strategies and guide medication-related performance improvement, our performance score was Five Stars, ranking our pharmacy among the top pharmacies in the U.S.
For the year ended December 31, 2024, per EQuIPP®, a performance information management tool that provides standardized, benchmarked data to help shape strategies and guide medication-related performance improvement, our performance score was Five Stars, ranking our pharmacy among the top pharmacies in the U.S.
Our business strategy We intend to achieve our mission and further grow our business by pursuing the following strategies: ● Increased product offerings - we are constantly increasing our product lines and offerings and will continue to do so in the future. ● Marketplace expansion – We intend to open new global e-commerce storefronts around the world to develop sales in new markets. 8 Table of Contents ● Government sourced revenue - We intend to target US government/GSA sales which have not historically represented a significant part of our sales revenue.
Our e-Commerce Business Strategy We intend to achieve our mission and further grow our business by pursuing the following strategies: ● Increased product offerings - we are constantly increasing our product lines and offerings and will continue to do so in the future. ● Marketplace expansion – We intend to open new global e-commerce storefronts around the world to develop sales in new markets. ● Government sourced revenue - We intend to target US government/GSA sales which have not historically represented a significant part of our sales revenue.
Pharmco’s consultant pharmacist services consist primarily of evaluation of monthly patient drug therapy and monitoring the LTC institution’s drug distribution system. 10 Table of Contents Medication therapy management (“MTM”) involves review and adjustment of prescribed drug therapies to improve patient health outcomes for patients with multiple prescriptions.
Pharmco’s consultant pharmacist services consist primarily of evaluation of monthly patient drug therapy and monitoring the LTC institution’s drug distribution system. 7 Table of Contents Medication therapy management (“MTM”) involves review and adjustment of prescribed drug therapies to improve patient health outcomes for patients with multiple prescriptions.
Because of such advantageous pricing, we may be less price competitive than some of these competitors with respect to certain pharmaceutical products. 12 Table of Contents Intellectual Property Our success and ability to compete depends in part on our ability to maintain our trade secrets.
Because of such advantageous pricing, we may be less price competitive than some of these competitors with respect to certain pharmaceutical products. 10 Table of Contents Intellectual Property Our success and ability to compete depends in part on our ability to maintain our trade secrets.
Noncompliance with the Stark Law could adversely affect our financial results and operations. 14 Table of Contents Statutes Prohibiting False Claims and Fraudulent Billing Activities . A range of federal civil and criminal laws target false claims and fraudulent billing activities.
Noncompliance with the Stark Law could adversely affect our financial results and operations. 12 Table of Contents Statutes Prohibiting False Claims and Fraudulent Billing Activities . A range of federal civil and criminal laws target false claims and fraudulent billing activities.
We expect to incur additional losses prior to recording sufficient revenue from our operations as a result of the costs associated with expanding and seeking additional sources of revenue to our current revenue base. Corporate Information NextPlat Corp, formerly Orbsat Corp, is a Nevada corporation and was originally incorporated in Florida in 1997.
We expect to incur additional losses prior to recording sufficient revenue from our operations as a result of the costs associated with expanding and seeking additional sources of revenue to our current revenue base. 15 Table of Contents Corporate Information NextPlat Corp, formerly Orbsat Corp, is a Nevada corporation and was originally incorporated in Florida in 1997.
We do not tailor our products and services to different types of customers as in our experience military, non-profit, government and recreational users tend to purchase the same types of products and services. Competition to our e-Commerce Operations Business The global satellite communications industry is highly competitive.
We do not tailor our products and services to different types of customers as in our experience military, non-profit, government and recreational users tend to purchase the same types of products and services. 5 Table of Contents Competition to our e-Commerce Operations Business The global satellite communications industry is highly competitive.
The requirements imposed by HIPAA have increased our burden and costs of regulatory compliance, altered our reporting to Plan Sponsors and reduced the amount of information we can use or disclose if members do not authorize such uses or disclosures. Medicare Part D .
The requirements imposed by HIPAA have increased our burden and costs of regulatory compliance, altered our reporting to Plan Sponsors and reduced the amount of information we can use or disclose if members do not authorize such uses or disclosures. 13 Table of Contents Medicare Part D .
These dispensing fees vary by the 340B covered entity and the level of service provided by us. For our long-term care (“LTC”) customers, Pharmco provides purchasing, repackaging and dispensing of both prescription and non-prescription pharmaceutical products. Pharmco utilizes a unit-of-dose packaging system as opposed to the traditional vials as this method of distribution is the industry best practice standard.
These dispensing fees vary by the 340B covered entity and the level of service provided by us. For our long-term care (“LTC”) facilities, Pharmco provides purchasing, special packaging, and dispensing of both prescription and non-prescription pharmaceutical products. Pharmco utilizes a unit-of-dose packaging system as opposed to the traditional vials as this method of distribution is the industry best practice standard.
Further, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
Further, on August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
The contents of our website or any other website are not incorporated by reference into this Annual Report on Form 10-K. 17 Table of Contents
The contents of our website or any other website are not incorporated by reference into this Annual Report on Form 10-K. 16 Table of Contents
Through Pharmco, LLC doing business as Pharmcorx (“Pharmco 901”) and Pharmcorx LTC, Touchpoint RX, LLC doing business as PharmcoRx 1002, LLC (“Pharmco 1002”), Family Physicians RX, Inc. doing business as PharmcoRx 1103 and PharmcoRx 1204 (“FPRX” historically or “Pharmco 1103” and “Pharmco 1204”) (pharmacy subsidiaries collectively referred to as “Pharmco”) we also offer certain disease testing and vaccinations.
In addition to these services, we also offer certain disease testing and vaccinations through Pharmco, LLC doing business as Pharmcorx (“Pharmco 901”) and Pharmcorx LTC, Touchpoint RX, LLC doing business as PharmcoRx 1002, LLC (“Pharmco 1002”), Family Physicians RX, Inc. doing business as PharmcoRx 1103 and PharmcoRx 1204 (“FPRX” historically or “Pharmco 1103” and “Pharmco 1204”) (pharmacy subsidiaries collectively referred to as “Pharmco”).
Federal and state-controlled substance laws require us to register our pharmacies with the U.S. Drug Enforcement Administration (“DEA”) and to comply with security, record keeping, inventory control, labeling standards and other requirements to dispense controlled substances. Food, Drug and Cosmetic Act . Certain provisions of the federal Food, Drug and Cosmetic Act govern the handling and distribution of pharmaceutical products.
Federal and state-controlled substance laws require us to register our pharmacies with the DEA and to comply with security, record keeping, inventory control, labeling standards and other requirements to dispense controlled substances. Food, Drug and Cosmetic Act . Certain provisions of the federal Food, Drug and Cosmetic Act govern the handling and distribution of pharmaceutical products.
Our healthcare business is focused on improving the lives of patients with complex chronic diseases through a patient and provider engagement and their partnerships with payors, pharmaceutical manufacturers, and distributors, offering a broad range of solutions to address the dispensing, delivery, dosing, and reimbursement of clinically intensive, high-cost drugs Segments We operate in two segments: our e-Commerce Business and our Healthcare Business.
Our healthcare business is focused on improving the lives of patients with complex chronic diseases through a patient and provider engagement and their partnerships with payors, pharmaceutical manufacturers, and distributors, offering a broad range of solutions to address the dispensing, delivery, dosing, and reimbursement of clinically intensive, high-cost drugs.
Our Amazon online marketplaces represented approximately 51.6% and 54.3% of total sales for the years ended December 31, 2023, and 2022, respectively and we anticipate that these marketplaces will continue to represent a significant portion of our sales for the foreseeable future.
Our Amazon online marketplaces represented approximately 32.8% and 51.6% of total sales for the years ended December 31, 2024, and 2023, respectively, and we anticipate that these marketplaces will continue to represent a significant portion of our sales for the foreseeable future.
Our e-Commerce Business Leveraging the e-commerce experience of our management team and our 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.
Segments We operate in two segments: e-Commerce Operations and Healthcare Operations. e-Commerce Operations Leveraging the e-commerce experience of our management team and our 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 a key component of the Company’s e-Commerce operations in the future.
We believe that we are well positioned to compete for the satellite telecommunications services business largely on a cost basis and our global e-commerce presence, which makes products more accessible to buy as compared to more traditional methods of purchasing e.g., bricks and mortar storefronts. 7 Table of Contents Our competitive strengths We believe that the following strengths contribute to our success: ● Our global presence enables us to compete in various markets around the world, with our multi-lingual personnel allowing us to respond to global customer inquiries with 24/7/365 customer support. ● Our significant expertise in global e-commerce sales allows us to maintain a competitive advantage over traditional methods of purchase through “brick and mortar” stores. ● Our significant levels of inventory stored in fulfillment centers around the world enable us to quickly secure customer orders against competitors who may not hold available inventory. ● Economies of scale of a leading provider of MSS product allows us to offer competitive prices for our products. ● Long-term contracts and experience with Globalstar allow us to compete competitively on satellite tracking opportunities. ● A diverse customer base with no single customer representing more than 3.0% of our annual gross sales revenue, and no single country representing more than 33% of our gross annual sales revenue as of December 31, 2023.
Our Competitive Strengths We believe that the following strengths contribute to our success: ● Our global presence enables us to compete in various markets around the world, with our multi-lingual personnel allowing us to respond to global customer inquiries with 24/7/365 customer support. ● Our significant expertise in global e-commerce sales allows us to maintain a competitive advantage over traditional methods of purchase through “brick and mortar” stores. ● Our significant levels of inventory stored in fulfillment centers around the world enable us to quickly secure customer orders against competitors who may not hold available inventory. ● Economies of scale of a leading provider of MSS product allows us to offer competitive prices for our products. ● Long-term contracts and experience with Globalstar allow us to compete competitively on satellite tracking opportunities. ● A diverse customer base with no single customer representing more than 3.0% of our annual gross e-Commerce sales revenue, and no single country representing more than 33% of our gross annual sales revenue as of December 31, 2024.
We believe that our relationships with our suppliers, overall, are good, and that there are alternative suppliers in the marketplace. 16 Table of Contents Our Risks and History of Losses Our ability to achieve our mission and execute our strategies is subject to certain challenges, risks and uncertainties, including, among others: ● Our ability to obtain sufficient funding to expand our business and respond to business opportunities ● Our ability to acquire new customers or retain existing customers in a cost-effective manner ● Our ability to successfully improve our production efficiencies and economies of scale ● Our ability to manage our supply chain to continue to satisfy our future operation needs ● Our ability to retain our market share in our industry We have incurred net losses since our inception.
Our Risks and History of Losses Our ability to achieve our mission and execute our strategies is subject to certain challenges, risks and uncertainties, including, among others: ● Our ability to obtain sufficient funding to expand our business and respond to business opportunities ● Our ability to acquire new customers or retain existing customers in a cost-effective manner ● Our ability to successfully improve our production efficiencies and economies of scale ● Our ability to manage our supply chain to continue to satisfy our future operation needs ● Our ability to retain our market share in our industry We have incurred net losses since our inception.
Schedule purchases represent approximately 21% of overall federal procurement spending. ● Product innovation - We will continue to launch our own innovative branded products, such as our SolarTrack solar powered satellite tracking device, to differentiate us and gain a competitive edge over other MSS suppliers. ● Future acquisitions - We will seek suitable acquisition opportunities to further increase our scale, expand sales and access new markets and sectors. ● E-Commerce Platforms - Expanding beyond our current global network of online storefronts serving thousands of consumers, enterprises, and governments.
Schedule purchases represent approximately 21% of overall federal procurement spending. ● Product innovation - We will continue to launch our own innovative branded products, such as our SolarTrack solar powered satellite tracking device, to differentiate us and gain a competitive edge over other MSS suppliers. ● Future acquisitions - We will seek suitable acquisition opportunities to further increase our scale, expand sales and access new markets and sectors. ● E-Commerce Platforms - Expanding beyond our current global network of online storefronts serving thousands of consumers, enterprises, and governments. 6 Table of Contents Healthcare Operations Our healthcare operations offer personalized healthcare services and technology that provide prescription pharmaceuticals and risk and data management services to healthcare organizations and providers.
A supplier failure could cause delays in product delivery if another supplier cannot be found promptly, or if the quality of such replacement supplier’s components is inferior or unacceptable. As a result of COVID-19 and related supply chain constraints, we have experienced shortages in inventory due to manufacturing and logistical issues.
A supplier failure could cause delays in product delivery if another supplier cannot be found promptly, or if the quality of such replacement supplier’s components is inferior or unacceptable. As a result of supply chain constraints, we have experienced shortages in inventory due to manufacturing and logistical issues. We obtain pharmaceutical and other products from wholesale drug distributors.
It has also allowed us to be innovative in our approach to healthcare by leveraging the broad perspectives of our team to challenge our methodologies and be responsive to the unique needs of our patients, clients, and customers.
This provides us with the unique ability to speak the language that our patients and providers speak. It has also allowed us to be innovative in our approach to healthcare by leveraging the broad perspectives of our team to challenge our methodologies and be responsive to the unique needs of our patients, clients, and customers.
For the years ended December 31, 2023, and 2022, we have incurred net losses of approximately $12.4 million and $9.2 million, respectively. As of December 31, 2023, we had an accumulated deficit of approximately $34.9 million.
For the years ended December 31, 2024, and 2023, we have incurred net losses of approximately $23.1 million and $12.4 million, respectively. As of December 31, 2024, we had an accumulated deficit of approximately $49.0 million.
Payors: We manage prescription regimens for chronically ill populations and help payors, including health insurance plans and PBMs, reduce costs through patient care management, reduction in readmission rates, decreased acute care spending for chronic care conditions, formulary compliance, and implementation of lowest cost-effective alternative therapies.
Payors : We manage prescription regimens for chronically ill populations and help payors, including health insurance plans and PBMs, reduce costs through patient care management, reduction in readmission rates, decreased acute care spending for chronic care conditions, formulary compliance, and implementation of lowest cost-effective alternative therapies. 8 Table of Contents Virtual Healthcare Services and Healthcare Technologies Virtual healthcare services, such as Telehealth, are a growing segment of the healthcare sector.
We currently hold Florida Community Pharmacy Permits at all Florida pharmacy locations and our Pharmco 901 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.
We currently hold Florida Community Pharmacy Permits at all Florida pharmacy locations and our Pharmco 901 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. Pharmco subsidiaries are full-service retail and specialty services pharmacies that offer same-day and next-day free delivery within Florida.
The products and airtime that we sell are intended to meet users’ needs for connectivity in all locations where existing terrestrial wireline and wireless communications networks do not exist, do not provide sufficient coverage, or are impaired.
Industry and Market of our e-Commerce Operations Business We compete in the mobile satellite products and services sector of the global communications industry. The products and airtime that we sell are intended to meet users’ needs for connectivity in all locations where existing terrestrial wireline and wireless communications networks do not exist, do not provide sufficient coverage, or are impaired.
We believe that our employees comply in all material respects with applicable licensure laws. State laws require that each pharmacy location be licensed as an in-state or non-resident pharmacy to dispense pharmaceuticals in that state. State controlled substance laws require registration and compliance with state pharmacy licensure, registration or permit standards promulgated by the state’s pharmacy licensing authority.
We believe that our employees comply in all material respects with applicable licensure laws. State laws require that each pharmacy location be licensed as an in-state or non-resident pharmacy to dispense pharmaceuticals in that state.
CMS sanctions for non-compliance may include suspension of enrollment and even termination from the program. The Medicare Part D program has undergone significant legislative and regulatory changes since its inception. Medicare Part D continues to attract a high degree of legislative and regulatory scrutiny, and applicable government rules and regulations continue to evolve.
CMS sanctions for non-compliance may include suspension of enrollment and even termination from the program. The Medicare Part D program has undergone significant legislative and regulatory changes since its inception.
It is unclear how any such challenges and the healthcare reform measures of the Biden administration will impact the ACA and our business. Costs and Effects of Compliance with Environmental Laws Not applicable. Employees As of December 31, 2023, we had 142 full-time employees and 24 part-time employee.
It is unclear how any additional healthcare reform measures of the second Trump administration will impact the ACA and our business. 14 Table of Contents Costs and Effects of Compliance with Environmental Laws Not applicable. Employees As of December 31, 2024, we had 162 full-time employees and 18 part-time employees.
We 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 (“GTC”).
We provide our products and services directly to end users and reseller networks located both in the United States and internationally through our subsidiaries: U.K. based GTC; U.S. based Orbital Satcom and Outfitter Satellite, Inc. (“Outfitter”).
These services are being offered through various modes of delivery, such as on-premises, web-based, and cloud-based delivery. A growing population over the age of 65, the increase in the number of chronic diseases, and a rise in demand for home monitoring devices are the major drivers which are likely to aid the growth of the telehealth market.
A growing population over the age of 65, the increase in the number of chronic diseases, and a rise in demand for home monitoring devices are the major drivers which are likely to aid the growth of the telehealth market.
Virtual Healthcare Services and Healthcare Technologies Virtual healthcare services, or Telehealth, is a growing segment of the healthcare sector. It involves remotely exchanging patient data between locations for the purposes of obtaining assistance in monitoring and diagnosing. Telehealth allows the healthcare practitioner to easily offer their services on consultation, care management, diagnosis, and self-management services using information and communication technologies.
It involves remotely exchanging patient data between locations for the purposes of obtaining assistance in monitoring and diagnosing. Telehealth allows the healthcare practitioner to easily offer their services on consultation, care management, diagnosis, and self-management services using information and communication technologies. These services are being offered through various modes of delivery, such as on-premises, web-based, and cloud-based delivery.
For example, CMS may issue regulations that limit the ability of Medicare Part D plans to establish preferred pharmacy networks. 15 Table of Contents Any Willing Provider Statutes and Narrow Networks .
Medicare Part D continues to attract a high degree of legislative and regulatory scrutiny, and applicable government rules and regulations continue to evolve. For example, CMS may issue regulations that limit the ability of Medicare Part D plans to establish preferred pharmacy networks. Any Willing Provider Statutes and Narrow Networks .
Such standards often address the qualification of an applicant’s personnel, the adequacy of its prescription fulfillment and inventory control practices and the adequacy of its facilities. In general, pharmacy licenses are renewed annually or biennial according to state laws. We believe that our pharmacies’ present and future locations comply with all state licensing laws applicable to these businesses.
In general, pharmacy licenses are renewed annually or biennial according to state laws. We believe that our pharmacies’ present and future locations comply with all state licensing laws applicable to these businesses.
Online Storefronts and E-Commerce Platforms We 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 the rest of the world.
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. 4 Table of Contents Online Storefronts and e-Commerce Platforms We 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 the rest of the world.
We obtain pharmaceutical and other products from wholesale drug distributors. We have maintained a relationship with a primary supplier that accounted for 98% of pharmaceutical purchases for the six months ended December 31, 2023, and several supplementary suppliers. Our primary supplier for the years ended December 31, 2023 was McKesson.
We have maintained a relationship with a primary supplier that accounted for 98% of pharmaceutical purchases for the year ended December 31, 2024, and several supplementary suppliers. Our primary supplier for the years ended December 31, 2024 and 2023 was McKesson. The loss of a supplier could adversely affect our business if alternate sources of drug supply are unavailable.
We offer value-added services at no additional charge including prior authorization assistance, same-day home-medication delivery, on site provider consultation services, primary care reporting and analytics, and customized packaging solutions.
We offer value-added services at no additional charge including prior authorization assistance, same-day home-medication delivery, on site provider consultation services, primary care reporting and analytics, and customized packaging solutions. The pharmacies accept most major insurance plans and provide access to co-pay assistance programs to income qualified patients, discount and manufacturer coupons, and competitive cash payment options.
We help patients adhere to complicated medication therapies, process refills, manage any side effects, and manage any insurance concerns ensuring that they get the best standard of care. The clinical efficacy of drug therapies, especially for acute and chronic conditions, is typically enhanced when patients precisely follow the prescribed treatment regimens, including dosing and frequency. Performance.
We help patients adhere to complicated medication therapies, process refills, manage any side effects, and manage any insurance concerns ensuring that they get the best standard of care.
These healthcare professionals not only dispense medications, but also analyze patients’ needs, behaviors, lifestyles, healthcare services providers, and payor resources to optimize the medication therapies received.
These healthcare professionals not only dispense medications, but also analyze patients’ needs, behaviors, lifestyles, healthcare services providers, and payor resources to optimize the medication therapies received. Our staff conducts this full healthcare evaluation while also communicating necessary care information to authorized providers and caregivers before medications are dispensed, which differentiates our pharmacy operations from our competitors’ models.
We may also seek to joint venture with or purchase part or all of businesses that manufacture or distribute products, particularly those that we believe we could market through our e-commerce platform, as well as business that could enhance our e-commerce platform. 3 Table of Contents Communications Products and Services Through our legacy 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.
Communications Products and Services Through our legacy Global Telesat Communications Ltd (“GTC”) and Orbital Satcom Corp (“Orbital Satcom”) 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.
This score is then compared to the scores of other pharmacies in the network at which point a relative rating is issued.
Pharmco is rated by pharmacy benefit managers (“PBMs”) based on its ability to adequately supply chronic care medications to patients during a measurement period. This score is then compared to the scores of other pharmacies in the network at which point a relative rating is issued.
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.
Mapping and Tracking Portal Our 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.
With increasing emphasis on reducing healthcare costs which puts pressure on gross margins, we have identified new trends and opportunities pivoting to business processes better suited to future environments. Additionally, we have focused on diversifying our revenue streams within the pharmacy industry to identify complementary and associated revenue opportunities to keep the operation one step ahead of market forces.
Lean and nimble operational strategy . Healthcare is an industry where best practices are continuously evolving. With increasing emphasis on reducing healthcare costs which puts pressure on gross margins, we have identified new trends and opportunities pivoting to business processes better suited to future environments.
Our headquarters and principal executive offices are located at 3250 Mary St., Suite 410, Coconut Grove, FL 33133. Our telephone number is (305) 560-5355, 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.
Our headquarters and principal executive offices are located at 3250 Mary St., Suite 410, Coconut Grove, FL 33133. Our telephone number is (305) 560-5381, and our corporate website is www.nextplat.com . Available Information We file annual, quarterly and current reports, proxy statements and other information with the SEC.
Our patient and provider support services ensure appropriate drug initiation, facilitate patient compliance and adherence, and capture important information regarding safety and effectiveness of the medications that we dispense. Pharmco is rated by pharmacy benefit managers (“PBMs”) based on its ability to adequately supply chronic care medications to patients during a measurement period.
Products and Services We enhance patient adherence to complex drug regimens, collect and report data, and ensure effective dispensing of medications to support the needs of patients, providers, and payors. Our patient and provider support services ensure appropriate drug initiation, facilitate patient compliance and adherence, and capture important information regarding safety and effectiveness of the medications that we dispense.
Pharmacies are measured against their peers to improve quality of patient care. We have dedicated staff to track performance metrics, ensuring high comparative adherence rates. Across the population, an average 50% of patients are adherent to prescribed medication protocols.
The clinical efficacy of drug therapies, especially for acute and chronic conditions, is typically enhanced when patients precisely follow the prescribed treatment regimens, including dosing and frequency. 9 Table of Contents Performance . Pharmacies are measured against their peers to improve quality of patient care. We have dedicated staff to track performance metrics, ensuring high comparative adherence rates.
We have a physical presence in the United States and the United Kingdom, as well as an ecommerce storefront presence in 18 countries across 5 continents.
We have a physical presence in the United States and the United Kingdom, as well as an e-Commerce storefront presence in 18 countries across five continents. We have a diverse geographical customer base having provided solutions for more than 60,000 customers located in more than 165 countries across most every continent in the world.
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. 4 Table of Contents MSS Products Our MSS products rely on satellite networks for voice, data and tracking connectivity and thus are not reliant on cell towers or other local infrastructure.
MSS Products Our MSS products rely on satellite networks for voice, data and tracking connectivity and thus are not reliant on cell towers or other local infrastructure.
Diversity and cultural awareness . We represent the fabric of the community from which we originate. Our employees consist of diverse faiths, races, ethnic origins, and sexual orientations. This provides us with the unique ability to speak the language that our patients and providers speak.
Additionally, we have focused on diversifying our revenue streams within the pharmacy industry to identify complementary and associated revenue opportunities to keep the operation one step ahead of market forces. Diversity and cultural awareness . We represent the fabric of the community from which we originate. Our employees consist of diverse faiths, races, ethnic origins, and sexual orientations.
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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.
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We may also seek to joint venture with or purchase part or all of businesses that manufacture or distribute products, particularly those that we believe we could market through our e-Commerce platform, as well as businesses that could enhance our e-Commerce platform.
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As we proceed to grow and enhance our e-commerce business and product offerings, we will consider whether we should retain our Global Telesat Communications Ltd and Orbital Satcom Corp business units, or whether we should sell or spin them off.
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We believe that we are well positioned to compete for the satellite telecommunications services business largely on a cost basis and our global e-commerce presence, which makes products more accessible to buy as compared to more traditional methods of purchasing e.g., bricks and mortar storefronts.
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The 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.
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Across the population, an average 50% of patients are adherent to prescribed medication protocols.
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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. 5 Table of Contents Mapping and Tracking Portal Our advanced subscription-based mapping and tracking portal, GTCTrack, is available for use by registered customers who pay a monthly fee to access it.
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State controlled substance laws require registration and compliance with state pharmacy licensure, registration or permit standards promulgated by the state’s pharmacy licensing authority and federal authority, the U.S. Drug Enforcement Agency (“DEA”). Such standards often address the qualification of an applicant’s personnel, the adequacy of its prescription fulfillment and inventory control practices and the adequacy of its facilities.
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With consumer behavior drastically changing because of COVID-19, e-commerce traffic witnessed double-digit gains in 2021 and 2020, respectively, as stores closed, and shoppers used digital options. This significant change in consumer shopping habits resulted in a substantial increase of U.S., EU and U.K. consumers electing to shop online.
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The Inflation Reduction Act of 2022 contains several provisions that could have the effect of reducing the prices we can charge and the reimbursement we receive for the drugs we dispense, thereby reducing our profitability, and could adversely affect our financial condition and results of operations.
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Starting in 2021, senior management of the Company invested in a comprehensive systems upgrade project with the goal of building a state-of-the-art e-commerce platform.
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These provisions include the establishment of a Medicare Drug Price Negotiation Program, which requires the government to negotiate and set a “maximum fair price” for select high-expenditure drugs covered under Medicare Part D (starting in 2026) and Part B (starting in 2028), and the implementation of changes to Medicare Part D benefits designed to limit patient out-of-pocket drug costs and shift program liabilities from patients to other stakeholders, including health plans, manufacturers and the government.
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This implementation is substantially complete, and the Company is collaborating with businesses to optimize their ability to sell their goods online, domestically, and internationally, enabling customers and partners to optimize their e-commerce presence and revenue. 6 Table of Contents Industry and Market of our e-Commerce Operations Business We compete in the mobile satellite products and services sector of the global communications industry.
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We believe that our relationships with our suppliers, overall, are good, and that there are alternative suppliers in the marketplace.
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Our Healthcare Operations Business Our healthcare operations, which are run through our subsidiary, Progressive Care Inc. and its wholly-owned subsidiaries, offers personalized healthcare services and technology that provides prescription pharmaceuticals and risk and data management services to healthcare organizations and providers.
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The pharmacies accept most major insurance plans and provide access to co-pay assistance programs to income qualified patients, discount and manufacturer coupons, and competitive cash payment options. 9 Table of Contents Products and Services We enhance patient adherence to complex drug regimens, collect and report data, and ensure effective dispensing of medications to support the needs of patients, providers, and payors.
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We can dispense to patients in the state of Massachusetts without a non-resident pharmacy license because Massachusetts does not require such a license for these activities. Pharmco subsidiaries are full-service retail specialty services pharmacies that offer same-day free delivery within Florida.
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Our staff conducts this full healthcare evaluation while also communicating necessary care information to authorized providers and caregivers before medications are dispensed, which differentiates our pharmacy operations from our competitors’ models. 11 Table of Contents Lean and nimble operational strategy. Healthcare is an industry where best practices are continuously evolving.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSummary of Risk Factors Risks Related to Our Business Generally ● We have a history of net losses, and we are uncertain about our future profitability. ● Supply chain and shipping disruptions have resulted in shipping delays, a significant increase in shipping costs, and could increase product costs and result in lost sales, which may have a material adverse effect on our business, operating results and financial condition. ● Our dependence on key suppliers puts us at risk of interruptions in the availability of our products, which could reduce our revenue and adversely affect the results of operations. ● Unfavorable global economic conditions have in the past and could in the future adversely affect our business, financial condition or results of operations. ● We may need to raise additional capital to grow our business and satisfy our anticipated future liquidity needs, and we may not be able to raise it on terms acceptable to us, or at all. ● Sustained investment in our business, strategic acquisitions and investments, as well as our focus on long-term performance, and on maintaining the health of our new e-commerce ecosystem, may negatively affect our margins and our net income, if any. ● The concentration of ownership by our principal stockholders may result in control by such stockholders of the composition of our board of directors. 18 Table of Contents ● We will become subject to a broad range of laws and regulations, and future laws and regulations may impose additional requirements and other obligations that could materially and adversely affect our business, financial condition and results of operations, as well as the trading prices of our securities. ● If we are successful in implementing our business strategy we will generate and process a large amount of data, including personal data, and the improper use or disclosure of data could result in regulatory investigations and penalties, and harm our reputation and have a material adverse effect on the trading prices of our securities, our business and our prospects.
Biggest changeSummary of Risk Factors Risks Related to Our Business Generally ● We have a history of net losses, and we are uncertain about our future profitability. ● Supply chain and shipping disruptions have resulted in shipping delays, a significant increase in shipping costs, and could increase product costs and result in lost sales, which may have a material adverse effect on our business, operating results and financial condition. ● Our dependence on key suppliers puts us at risk of interruptions in the availability of our products, which could reduce our revenue and adversely affect the results of operations. ● Unfavorable global economic conditions have in the past and could in the future adversely affect our business, financial condition or results of operations. ● We may need to raise additional capital to grow our business and satisfy our anticipated future liquidity needs, and we may not be able to raise it on terms acceptable to us, or at all. ● Sustained investment in our business, strategic acquisitions and investments, as well as our focus on long-term performance, and on maintaining the health of our new e-commerce ecosystem, may negatively affect our margins and our net income, if any. ● The concentration of ownership by our principal stockholders may result in control by such stockholders of the composition of our board of directors. ● We will become subject to a broad range of laws and regulations, and future laws and regulations may impose additional requirements and other obligations that could materially and adversely affect our business, financial condition and results of operations, as well as the trading prices of our securities. ● If we are successful in implementing our business strategy we will generate and process a large amount of data, including personal data, and the improper use or disclosure of data could result in regulatory investigations and penalties, and harm our reputation and have a material adverse effect on the trading prices of our securities, our business and our prospects. ● Our operations in international markets, and earnings in those markets, may be affected by changes in global cultural, political, and financial market conditions as well as potential changes in regulation, legislation, and government policies such as tariffs, tax laws, and global trade policies. 17 Table of Contents Risks Related to Our e-Commerce Business ● Our sales may be impacted should there be a disruption of service to our Amazon or Alibaba online storefronts. ● Creating and maintaining a trusted status of our online marketing presence or ecosystem will be critical to our viability and growth. ● Any termination or material change in our relationship with Amazon or Alibaba could have a material adverse effect on our business, financial condition, results of operations and prospects. ● We may not be able to maintain and improve our online marketing. ● We face challenges in expanding our international and cross-border businesses and operations. ● We are heavily reliant on the services of certain executive officers and the departure or loss of any of these officers could disrupt our business. ● A significant portion of our revenues are from sales of products on Amazon and any limitation or restriction, temporarily or otherwise, to sell on Amazon’s platform could have a material adverse impact to our business, results of operations, financial condition and prospects. ● If logistics service providers used by our merchants fail to provide reliable logistics services, our business and prospects, as well as our financial condition and results of operations, may be materially and adversely affected. ● Our e-commerce platforms could be disrupted by network interruptions. ● Security breaches and attacks against our systems and network, and any potentially resulting breach or failure to otherwise protect personal, confidential and proprietary information, could damage our reputation and negatively impact our business, as well as materially and adversely affect our financial condition and results of operations. ● Non-compliance with, or changes in, the legal and regulatory environment in the countries in which we operate could increase our costs or reduce our net operating revenues. ● Tightening of tax compliance efforts that affect our merchants could materially and adversely affect our business, financial condition and results of operations.
In addition, changes to our solutions or systems, including cost savings initiatives, may cost more than anticipated, may not provide the benefits expected, may take longer than anticipated to develop and implement or may increase the risk of performance problems. ● Breaches and failures of our IT systems and the security measures protecting them, and the sensitive information we transmit, use and store, expose us to potential liability and reputational harm. ● We collect, process, store, share, disclose and use personal information and other data, and our actual or perceived failure to protect such information and data could damage our reputation and brand and harm our business and operating results. ● If we are unable to successfully execute on cross-selling opportunities of our solutions the growth of our business and financial performance could be harmed. ● We rely on internet infrastructure, bandwidth providers, other third parties and our own systems in providing certain of our solutions to our customers, and any failure or interruption in the services provided by these third parties or our own systems could negatively impact our relationships with customers, adversely affecting our brand and our business. 21 Table of Contents Risks Related to Our Business We have a history of net losses, and we are uncertain about our future profitability.
In addition, changes to our solutions or systems, including cost savings initiatives, may cost more than anticipated, may not provide the benefits expected, may take longer than anticipated to develop and implement or may increase the risk of performance problems. ● Breaches and failures of our IT systems and the security measures protecting them, and the sensitive information we transmit, use and store, expose us to potential liability and reputational harm. ● We collect, process, store, share, disclose and use personal information and other data, and our actual or perceived failure to protect such information and data could damage our reputation and brand and harm our business and operating results. ● If we are unable to successfully execute on cross-selling opportunities of our solutions the growth of our business and financial performance could be harmed. ● We rely on internet infrastructure, bandwidth providers, other third parties and our own systems in providing certain of our solutions to our customers, and any failure or interruption in the services provided by these third parties or our own systems could negatively impact our relationships with customers, adversely affecting our brand and our business. 19 Table of Contents Risks Related to Our Business We have a history of net losses, and we are uncertain about our future profitability.
We will be subject to currency exchange rate risk to the extent that our costs are denominated in currencies other than those in which we earn revenues. Fluctuations in currency exchange rates may therefore have an impact on our results as expressed in U.S. dollars.
In addition, we will be subject to currency exchange rate risk to the extent that our costs are denominated in currencies other than those in which we earn revenues. Fluctuations in currency exchange rates may therefore have an impact on our results as expressed in U.S. dollars.
Further, we cannot provide any assurance that federal or state governments will not impose additional restrictions or adopt interpretations of existing laws that could increase our cost of compliance with such laws or reduce our ability to remain profitable. 44 Table of Contents Federal and state investigations and enforcement actions continue to focus on the healthcare industry, scrutinizing a wide range of items such as referral and billing practices, product discount arrangements, dissemination of confidential patient information, clinical drug research trials, pharmaceutical marketing programs, and gifts for patients.
Further, we cannot provide any assurance that federal or state governments will not impose additional restrictions or adopt interpretations of existing laws that could increase our cost of compliance with such laws or reduce our ability to remain profitable. 45 Table of Contents Federal and state investigations and enforcement actions continue to focus on the healthcare industry, scrutinizing a wide range of items such as referral and billing practices, product discount arrangements, dissemination of confidential patient information, clinical drug research trials, pharmaceutical marketing programs, and gifts for patients.
Our current and potential competitors may include: ● Other pharmacy distributors; ● Specialty pharmacy divisions of wholesale drug distributors; ● Not for profit organizations with pharmacies; ● Hospital-based pharmacies; ● Local infusion providers; ● Sterile and non-sterile compounding pharmacies; ● Other retail pharmacies; ● Provider dispensaries; ● Manufacturers that sell their products both to distributors and directly to clinics and physicians’ offices; ● Hospital-based care centers and other alternate-site healthcare providers; ● Insurance companies with proprietary pharmacy services; ● Customers and MSO’s of ours who decide to open their own pharmacies; ● Chain pharmacies; and ● Mail-order pharmacies.
Our current and potential competitors may include: ● Other pharmacy distributors; ● Specialty pharmacy divisions of wholesale drug distributors; ● Not for profit organizations with pharmacies; ● Hospital-based pharmacies; ● Local infusion providers; ● Sterile and non-sterile compounding pharmacies; ● Other retail pharmacies; ● Provider dispensaries; ● Manufacturers that sell their products both to distributors and directly to clinics and physicians’ offices; ● Hospital-based care centers and other alternate-site healthcare providers; ● Insurance companies with proprietary pharmacy services; ● Customers and MSOs of ours who decide to open their own pharmacies; ● Chain pharmacies; and ● Mail-order pharmacies.
While the use of currency hedging instruments may provide us with protection from adverse fluctuations in currency exchange rates, by utilizing these instruments we potentially forego the benefits that might result from favorable fluctuations in currency exchange rates. 24 Table of Contents We may need to raise additional capital to grow our business and satisfy our anticipated future liquidity needs, and we may not be able to raise it on terms acceptable to us, or at all.
While the use of currency hedging instruments may provide us with protection from adverse fluctuations in currency exchange rates, by utilizing these instruments we potentially forego the benefits that might result from favorable fluctuations in currency exchange rates. 22 Table of Contents We may need to raise additional capital to grow our business and satisfy our anticipated future liquidity needs, and we may not be able to raise it on terms acceptable to us, or at all.
To the extent we lost the business of one or more of these healthcare payors, our revenues would significantly decrease, having a material adverse effect on our business, results of operations and financial condition. 45 Table of Contents Our ability to grow our business may be constrained by our inability to find suitable new pharmacy locations at acceptable prices.
To the extent we lost the business of one or more of these healthcare payors, our revenues would significantly decrease, having a material adverse effect on our business, results of operations and financial condition. 46 Table of Contents Our ability to grow our business may be constrained by our inability to find suitable new pharmacy locations at acceptable prices.
Our future performance will depend in part on our ability to successfully integrate those newly hired executive officers into our management team and our ability to develop an effective working relationship among senior management. 48 Table of Contents Risks Related to the Pharmacy Industry There is substantial competition in our industry, and we may not be able to compete successfully.
Our future performance will depend in part on our ability to successfully integrate those newly hired executive officers into our management team and our ability to develop an effective working relationship among senior management. 49 Table of Contents Risks Related to the Pharmacy Industry There is substantial competition in our industry, and we may not be able to compete successfully.
As a result, the market price of our common stock could be materially adversely affected. 28 Table of Contents We will become subject to a broad range of laws and regulations, and future laws and regulations may impose additional requirements and other obligations that could materially and adversely affect our business, financial condition and results of operations, as well as the trading prices of our securities.
As a result, the market price of our common stock could be materially adversely affected. 27 Table of Contents We will become subject to a broad range of laws and regulations, and future laws and regulations may impose additional requirements and other obligations that could materially and adversely affect our business, financial condition and results of operations, as well as the trading prices of our securities.
In addition, Amazon in its sole discretion may suspend a seller account and product listings if Amazon determines that a seller has engaged in conduct that violates any of its policies. Any limitation or restriction on our ability to sell on Amazon’s platform could have a material impact on our business, results of operations, financial condition and prospects.
Moreover, Amazon in its sole discretion may suspend a seller account and product listings if Amazon determines that a seller has engaged in conduct that violates any of its policies. Any limitation or restriction on our ability to sell on Amazon’s platform could have a material impact on our business, results of operations, financial condition and prospects.
There can be no assurance that we will be able to grow our acquired or invested businesses, or realize returns, benefits of synergies and growth opportunities we expect in connection with these investments and acquisitions. 25 Table of Contents Failure to maintain or improve our technological infrastructure could harm our business and prospects.
There can be no assurance that we will be able to grow our acquired or invested businesses, or realize returns, benefits of synergies and growth opportunities we expect in connection with these investments and acquisitions. 23 Table of Contents Failure to maintain or improve our technological infrastructure could harm our business and prospects.
This control could have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval of certain transactions difficult or impossible without the support of these stockholders. 26 Table of Contents Successful technical development of our products does not guarantee successful commercialization.
This control could have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval of certain transactions difficult or impossible without the support of these stockholders. 24 Table of Contents Successful technical development of our products does not guarantee successful commercialization.
Additionally, Medicare Part D regulations that strictly limit our ability to market to our current and new patients may limit our ability to maintain and grow our current patient base. 46 Table of Contents If we fail to manage our growth or implement changes to our reporting systems effectively, our business could be harmed.
Additionally, Medicare Part D regulations that strictly limit our ability to market to our current and new patients may limit our ability to maintain and grow our current patient base. 47 Table of Contents If we fail to manage our growth or implement changes to our reporting systems effectively, our business could be harmed.
Also, the anticipated benefits of any acquisitions may not materialize to the extent we anticipate or at all. 47 Table of Contents A disruption in our telephone system or our computer system could harm our business. We receive and take most prescription orders electronically, over the telephone and by facsimile.
Also, the anticipated benefits of any acquisitions may not materialize to the extent we anticipate or at all. 48 Table of Contents A disruption in our telephone system or our computer system could harm our business. We receive and take most prescription orders electronically, over the telephone and by facsimile.
In that regard, our business, financial position and results of operations could be affected by one or more of the following: ● federal and state laws and regulations governing the purchase, distribution, management, dispensing and reimbursement of prescription drugs and related services, whether at retail or mail, and applicable licensing requirements; ● the effect of the expiration of patents covering brand name drugs and the introduction of generic products; ● the frequency and rate of approvals by the FDA of new brand named and generic drugs, or of over-the-counter status for brand name drugs; ● FDA regulation affecting the retail pharmacy industry; ● rules and regulations issued pursuant to the HIPAA; and other federal and state laws affecting the use, disclosure and transmission of health information, such as state security breach laws and state laws limiting the use and disclosure of prescriber information; ● administration of the Medicare drug benefit, including legislative changes and/or CMS rulemaking and interpretation; ● government regulation of the development, administration, review and updating of formularies and drug lists; ● state laws and regulations establishing or changing prompt payment requirements for payments to retail pharmacies; ● impact of network access (any willing provider) legislation on ability to manage pharmacy networks; ● managed care reform and plan design legislation; ● insurance licensing and other insurance regulatory requirements applicable to offering prescription drug providers (“PDP”) about the Medicare drug benefit; ● direct regulation of pharmacies by regulatory and quasi-regulatory bodies; and ● Federal government sequestration affecting Medicare Part B reimbursements. 43 Table of Contents Changes in the health care regulatory environment may adversely affect our business.
In that regard, our business, financial position and results of operations could be affected by one or more of the following: ● federal and state laws and regulations governing the purchase, distribution, management, dispensing and reimbursement of prescription drugs and related services, whether at retail or mail, and applicable licensing requirements; ● the effect of the expiration of patents covering brand name drugs and the introduction of generic products; ● the frequency and rate of approvals by the FDA of new brand named and generic drugs, or of over-the-counter status for brand name drugs; ● FDA regulation affecting the retail pharmacy industry; ● rules and regulations issued pursuant to the HIPAA; and other federal and state laws affecting the use, disclosure and transmission of health information, such as state security breach laws and state laws limiting the use and disclosure of prescriber information; ● administration of the Medicare drug benefit, including legislative changes and/or CMS rulemaking and interpretation; ● government regulation of the development, administration, review and updating of formularies and drug lists; ● state laws and regulations establishing or changing prompt payment requirements for payments to retail pharmacies; ● impact of network access (any willing provider) legislation on ability to manage pharmacy networks; ● managed care reform and plan design legislation; ● insurance licensing and other insurance regulatory requirements applicable to offering prescription drug providers (“PDP”) about the Medicare drug benefit; ● direct regulation of pharmacies by regulatory and quasi-regulatory bodies; and ● Federal government sequestration affecting Medicare Part B reimbursements.
Complying with laws and regulations for an increasing number of jurisdictions could require significant resources and costs. 29 Table of Contents The nature of our business involves significant risks and uncertainties that may not be covered by insurance or indemnity.
Complying with laws and regulations for an increasing number of jurisdictions could require significant resources and costs. 28 Table of Contents The nature of our business involves significant risks and uncertainties that may not be covered by insurance or indemnity.
Certain healthcare payors, including Medicare Part D and the State of Florida, account for more than ten percent or more of our consolidated net revenue in fiscal 2023 and fiscal 2022. Medicare Part D and the State of Florida Medicaid public assistance program are major customers of ours.
Certain healthcare payors, including Medicare Part D and the State of Florida, account for more than ten percent or more of our consolidated net revenue in fiscal 2024 and fiscal 2023. Medicare Part D and the State of Florida Medicaid public assistance program are major customers of ours.
As our revenue grows to a higher base level, our revenue growth rate may slow in the future. 31 Table of Contents If we are unable to compete effectively, our business, financial condition and results of operations would be materially and adversely affected. We face intense competition from established Internet companies, as well as from global and regional e-commerce players.
As our revenue grows to a higher base level, our revenue growth rate may slow in the future. If we are unable to compete effectively, our business, financial condition and results of operations would be materially and adversely affected. We face intense competition from established Internet companies, as well as from global and regional e-commerce players.
As a public company, we expect these rules and regulations to increase our compliance costs in 2023 and beyond and to make certain activities more time consuming and costly.
As a public company, we expect these rules and regulations to increase our compliance costs in 2025 and beyond and to make certain activities more time consuming and costly.
In addition, investors purchasing shares or other securities in the future could have rights superior to our current stockholders. We do not anticipate paying dividends on our common stock, and investors may lose the entire amount of their investment.
In addition, investors purchasing shares or other securities in the future could have rights superior to our current stockholders. 55 Table of Contents We do not anticipate paying dividends on our common stock, and investors may lose the entire amount of their investment.
If we encounter complications related to network configurations or settings, we may have to modify our solutions to enable them to interoperate with customers’ and their vendors’ networks and manage customers’ transactions in the manner intended. 50 Table of Contents Our ability to generate revenue could suffer if we do not continue to update and improve existing solutions and develop new ones.
If we encounter complications related to network configurations or settings, we may have to modify our solutions to enable them to interoperate with customers’ and their vendors’ networks and manage customers’ transactions in the manner intended. Our ability to generate revenue could suffer if we do not continue to update and improve existing solutions and develop new ones.
These interruptions or failures may be due to events that are beyond the control of any of these logistics service providers, such as inclement weather, natural disasters, the COVID-19 pandemic, other pandemics or epidemics, accidents, transportation disruptions, including special or temporary restrictions or closings of facilities or transportation networks due to regulatory or political reasons, or labor unrest or shortages.
These interruptions or failures may be due to events that are beyond the control of any of these logistics service providers, such as inclement weather, natural disasters, pandemics or epidemics, accidents, transportation disruptions, including special or temporary restrictions or closings of facilities or transportation networks due to regulatory or political reasons, or labor unrest or shortages.
We rely on a combination of trademark, fair trade practice, patent, copyright and trade secret protection laws, as well as confidentiality procedures and contractual provisions, to protect our intellectual property rights. We may not be able to effectively protect our intellectual property rights or to enforce our contractual rights.
We may not be able to protect our intellectual property rights . We rely on a combination of trademark, fair trade practice, patent, copyright and trade secret protection laws, as well as confidentiality procedures and contractual provisions, to protect our intellectual property rights.
In addition, changes in technology and systems may not provide the additional functionality or other benefits that were expected. Implementation of changes in our technology and systems may cost more or take longer than originally expected and may require more testing than initially anticipated.
In addition, changes in technology and systems may not provide the additional functionality or other benefits that were expected. 52 Table of Contents Implementation of changes in our technology and systems may cost more or take longer than originally expected and may require more testing than initially anticipated.
Increases in prices for materials and components used in our products could also materially adversely affect our results of operations. 23 Table of Contents Unfavorable global economic conditions have in the past and could in the future adversely affect our business, financial condition or results of operations.
Increases in prices for materials and components used in our products could also materially adversely affect our results of operations. Unfavorable global economic conditions have in the past and could in the future adversely affect our business, financial condition or results of operations.
Phipps, or the inability to timely hire and retain a qualified replacement, could negatively impact the Company’s ability to manage its business. 34 Table of Contents If we are unable to recruit and retain key management, technical and sales personnel, our business would be negatively affected.
Phipps, or the inability to timely hire and retain a qualified replacement, could negatively impact the Company’s ability to manage its business. If we are unable to recruit and retain key management, technical and sales personnel, our business would be negatively affected.
In the event of a delisting, we would expect to take actions to restore our compliance with the listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the minimum bid price requirement, or prevent future non-compliance with the listing requirements.
In the event of a delisting, we would expect to take actions to restore our compliance with the listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the minimum bid price requirement, or prevent future non-compliance with the listing requirements. 56 Table of Contents Our stock price may be volatile.
A significant factor in effective competition will be our ability to maintain and expand our relationships with patients, healthcare providers and government and private payors. If demand for our products and services is reduced, our business and ability to grow would be harmed.
A significant factor in effective competition will be our ability to maintain and expand our relationships with patients, healthcare providers and government and private payors. 50 Table of Contents If demand for our products and services is reduced, our business and ability to grow would be harmed.
Complying with these laws and regulations requires the time and attention of our Board of Directors and management and increases our expenses. We estimate the Company will incur approximately $200,000 to $300,000 annually in connection with being a public company.
Complying with these laws and regulations requires the time and attention of our Board of Directors and management and increases our expenses. We estimate the Company will incur approximately $400,000 to $600,000 annually in connection with being a public company.
Our ability to respond on share price-sensitive information to our competitors’ misleading marketing efforts, including lawfare, may be limited during our self-imposed quiet periods around quarter ends consistent with our internal policies or due to legal prohibitions on permissible public communications by us during certain other periods. 38 Table of Contents Risks Related to Doing Business in China We contemplate that our business expansion, if successful, will result in an increase in the business we do in China.
Our ability to respond on share price-sensitive information to our competitors’ misleading marketing efforts, including lawfare, may be limited during our self-imposed quiet periods around quarter ends consistent with our internal policies or due to legal prohibitions on permissible public communications by us during certain other periods. 38 Table of Contents Risks Related to Doing Business in China Our current business expansion involves an increase in the business we do in China.
Risks Related to Our Healthcare Business ● We derive a significant portion of our sales from prescription drug sales reimbursed by pharmacy benefit management companies. ● Efforts to reduce reimbursement levels and alter health care financing practices could adversely affect our businesses. ● A slowdown in the frequency and rate of the introduction of new prescription drugs as well as generic alternatives to brand name prescription products could adversely affect our business, financial position, and results of operations. ● Uncertainty regarding the impact of Medicare Part D may adversely affect our business, financial position and our results of operations. ● Unexpected safety or efficacy concerns may arise from pharmaceutical products. ● Prescription volumes may decline, and our net revenues and ability to generate earnings may be negatively impacted, if products are withdrawn from the market or if increased safety risk profiles of specific drugs result in utilization decreases. ● Certain risks are inherent in providing pharmacy services; our insurance may not be adequate to cover any claims against us. ● Changes in industry pricing benchmarks could adversely affect our business, financial position and results of operations. ● The industries in which we operate are extremely competitive and competition could adversely affect our business, financial position and results of operations. ● Existing and new government legislative and regulatory action could adversely affect our business, financial position and results of operations. ● Changes in the health care regulatory environment may adversely affect our business. ● Efforts to reform the U.S. health care system may adversely affect our financial performance. ● If we are found to be in violation of Medicaid and Medicare reimbursement regulations, we could become subject to retroactive adjustments and recoupment, or exclusion from the Medicaid, Medicare programs, and PBM networks. ● Our industry is subject to extensive government regulation, and noncompliance by us or our suppliers could harm our business. ● Our operating results are affected by the health of the economy in general and the markets we serve. ● If the products and services that we offer fail to meet customer needs, our sales may be affected. ● We are highly dependent on one supplier for our products, and a loss of that supplier may adversely impact our ability to sell products to our customers. ● We derive a significant portion of our revenues from a small number of customers and a loss of one or both of those customers would have a material adverse impact on our business. ● Our ability to grow our business may be constrained by our inability to find suitable new pharmacy locations at acceptable prices. ● Our ability to grow our business may be constrained by our inability to obtain adequate permits and licensing for new locations, business lines, and market territories. ● Product liability, product recall or personal injury issues could damage our reputation and have a significant adverse effect on our businesses, operating results, cash flows and/or financial condition. ● If we are not able to market our services effectively to clinics, their affiliated healthcare providers and prescription drug providers, we may not be able to grow our patient base as rapidly as we have anticipated. ● A disruption in our telephone system or our computer system could harm our business. 20 Table of Contents Risks Related to the Pharmacy Industry ● There is substantial competition in our industry, and we may not be able to compete successfully. ● If demand for our products and services is reduced, our business and ability to grow would be harmed. ● Our revenues could be adversely affected if new drugs or combination therapies are developed and prescribed to our patients that have a reimbursement rate less than that of the current drug therapies our patients receive. ● If our credit terms with vendors become unfavorable or our relationship with them is terminated, our business could be adversely affected.
Risks Related to Our Healthcare Business ● We derive a significant portion of our sales from prescription drug sales reimbursed by pharmacy benefit management companies. ● Efforts to reduce reimbursement levels and alter health care financing practices could adversely affect our businesses. ● A slowdown in the frequency and rate of the introduction of new prescription drugs as well as generic alternatives to brand name prescription products could adversely affect our business, financial position, and results of operations. ● Unexpected safety or efficacy concerns may arise from pharmaceutical products. ● Prescription volumes may decline, and our net revenues and ability to generate earnings may be negatively impacted, if products are withdrawn from the market or if increased safety risk profiles of specific drugs result in utilization decreases. ● Certain risks are inherent in providing pharmacy services; our insurance may not be adequate to cover any claims against us. ● Changes in industry pricing benchmarks could adversely affect our business, financial position and results of operations. ● The industries in which we operate are extremely competitive and competition could adversely affect our business, financial position and results of operations. ● Existing and new government legislative and regulatory action could adversely affect our business, financial position and results of operations. ● Changes in the health care regulatory environment may adversely affect our business. ● Efforts to reform the U.S. health care system may adversely affect our financial performance. 18 Table of Contents ● If we are found to be in violation of Medicaid and Medicare reimbursement regulations, we could become subject to retroactive adjustments and recoupment, or exclusion from the Medicaid, Medicare programs, and PBM networks. ● Our industry is subject to extensive government regulation, and noncompliance by us or our suppliers could harm our business. ● Our operating results are affected by the health of the economy in general and the markets we serve. ● If the products and services that we offer fail to meet customer needs, our sales may be affected. ● We are highly dependent on one supplier for our products, and a loss of that supplier may adversely impact our ability to sell products to our customers. ● We derive a significant portion of our revenues from a small number of customers and a loss of one or both of those customers would have a material adverse impact on our business. ● Our ability to grow our business may be constrained by our inability to find suitable new pharmacy locations at acceptable prices. ● Our ability to grow our business may be constrained by our inability to obtain adequate permits and licensing for new locations, business lines, and market territories. ● Product liability, product recall or personal injury issues could damage our reputation and have a significant adverse effect on our businesses, operating results, cash flows and/or financial condition. ● If we are not able to market our services effectively to clinics, their affiliated healthcare providers and prescription drug providers, we may not be able to grow our patient base as rapidly as we have anticipated. ● A disruption in our telephone system or our computer system could harm our business.
With respect to U.S. and global credit markets and the economy in general, this outbreak has resulted in, and until fully resolved is likely to continue to result in, the following (among other things): (i) restrictions on travel and the temporary closure of many corporate offices, retail stores, and manufacturing facilities and factories, resulting in significant disruption to the business of many companies, including supply chains and demand, as well as layoffs of employees; (ii) increased draws by borrowers on lines of credit; (iii) increased requests by borrowers for amendments or waivers of their credit agreements to avoid default, increased defaults by borrowers and/or increased difficulty in obtaining refinancing; (iv) volatility in credit markets, including greater volatility in pricing and spreads; and (v) evolving proposals and actions by state and federal governments to address the problems being experienced by markets, businesses and the economy in general, which may not adequately address the problems being facing such persons.
With respect to U.S. and global credit markets and the economy in general, these outbreaks have resulted in the following (among other things): (i) restrictions on travel and the temporary closure of many corporate offices, retail stores, and manufacturing facilities and factories, resulting in significant disruption to the business of many companies, including supply chains and demand, as well as layoffs of employees; (ii) increased draws by borrowers on lines of credit; (iii) increased requests by borrowers for amendments or waivers of their credit agreements to avoid default, increased defaults by borrowers and/or increased difficulty in obtaining refinancing; (iv) volatility in credit markets, including greater volatility in pricing and spreads; and (v) evolving proposals and actions by state and federal governments to address the problems being experienced by markets, businesses and the economy in general, which may not adequately address the problems being facing such persons.
Changes in China ’ s economic, political or social conditions or government policies could have a material adverse effect on our business, financial conditions and results of operations. Currently we do not have operations in China.
Changes in China ’ s economic, political or social conditions or government policies could have a material adverse effect on our business, financial conditions and results of operations.
The Company’s Amazon online marketplaces represented approximately 51.6% and 54.3% of total sales for the years ended December 31, 2023, and 2022, respectively. In July 2021 we commenced sales through the Alibaba storefront. These marketplaces will represent a significant portion of our sales in the foreseeable future.
The Company’s Amazon online marketplaces represented approximately 32.8% and 51.6% of total sales for the years ended December 31, 2024, and 2023, respectively. In July 2021 we commenced sales through the Alibaba storefront. These marketplaces will represent a significant portion of our sales in the foreseeable future.
If any of our products were found to infringe other parties’ proprietary rights and we are unable to come to terms regarding a license with such parties, we may be forced to modify our products to make them non-infringing, to pay substantial damages to our end users to discontinue their use of or replace infringing technology sold to them with non-infringing technology, or to cease production of such products altogether. 27 Table of Contents We may not be able to protect our intellectual property rights .
If any of our products were found to infringe other parties’ proprietary rights and we are unable to come to terms regarding a license with such parties, we may be forced to modify our products to make them non-infringing, to pay substantial damages to our end users to discontinue their use of or replace infringing technology sold to them with non-infringing technology, or to cease production of such products altogether.
Growing and operating our business will require significant cash outlays, liquidity reserves and capital expenditures and commitments to respond to business challenges, including developing or enhancing new or existing products. As of December 31, 2023, we had cash on hand of approximately $26.3 million.
Growing and operating our business will require significant cash outlays, liquidity reserves and capital expenditures and commitments to respond to business challenges, including developing or enhancing new or existing products. As of December 31, 2024, we had cash on hand of approximately $20.0 million.
Approximately 51.6% of our products are sold on Amazon and are subject to Amazon’s terms of service and various other Amazon seller policies that apply to third parties selling products on Amazon’s marketplace.
Furthermore, our products sold on Amazon are subject to Amazon’s terms of service and various other Amazon seller policies that apply to third parties selling products on Amazon’s marketplace.
Future rulemaking could increase regulation of pharmacy services, result in changes to pharmacy reimbursement rates, and otherwise change the way we do business. We cannot predict the timing or impact of any future rulemaking, but any such rulemaking could have an adverse impact on our results of operations.
Changes in the health care regulatory environment may adversely affect our business. Future rulemaking could increase regulation of pharmacy services, result in changes to pharmacy reimbursement rates, and otherwise change the way we do business. We cannot predict the timing or impact of any future rulemaking, but any such rulemaking could have an adverse impact on our results of operations.
We are in the process of upgrading our platforms to provide increased scale, improved performance, additional capacity and additional built-in functionality, including functionality related to security. Adopting new products and maintaining and upgrading our technology infrastructure require significant investments of time and resources.
We continually add upgrades to our platforms to provide increased scale, improved performance, additional capacity and additional built-in functionality, including functionality related to security. Adopting new products and maintaining and upgrading our technology infrastructure require significant investments of time and resources.
Our ability to maintain trust in our online capabilities will be based in large part upon: ● the quality, value and functionality of products and services offered; ● the reliability and integrity of our company and our e-commerce websites, as well as of the merchants, ● software developers, logistics providers, service providers, intellectual property holders and other participants in our ecosystem; ● our commitment to high levels of service; ● the safety, security and integrity of the data on our systems, and those of other participants on our e-commerce websites; ● the strength of our measures to protect consumers and intellectual property rights owners; and ● our ability to provide reliable and trusted payment and escrow services through our arrangements with third party service providers.
Our ability to maintain trust in our online capabilities will be based in large part upon: ● the quality, value and functionality of products and services offered; ● the reliability and integrity of our company and our e-commerce websites, as well as of the merchants, ● software developers, logistics providers, service providers, intellectual property holders and other participants in our ecosystem; ● our commitment to high levels of service; ● the safety, security and integrity of the data on our systems, and those of other participants on our e-commerce websites; ● the strength of our measures to protect consumers and intellectual property rights owners; and ● our ability to provide reliable and trusted payment and escrow services through our arrangements with third party service providers. 30 Table of Contents Our current plans contemplate that we will expand our online marketing presence primarily via the Alibaba ecosystem.
We maintained a relationship with a primary supplier, McKesson, that accounted for approximately 98% the six months ended December 31, 2023, and several supplementary suppliers. If that supplier was to cease supplying us with products for any reason, we would be forced to find alternative sources for our products.
We maintained a relationship with a primary supplier, McKesson, that accounted for approximately 98% of pharmaceutical purchases for the year ended December 31, 2024, and several supplementary suppliers. If that supplier was to cease supplying us with products for any reason, we would be forced to find alternative sources for our products.
Due to these and other macroeconomic factors, many observers believe there is a risk of a recession occurring in the United States, and perhaps in other major global economies. These developments may adversely affect our business, financial condition and results of operations. The United Kingdom ’ s departure from the EU could adversely affect us.
Due to these and other macroeconomic factors, many observers believe there is a risk of a recession occurring in the United States, and perhaps in other major global economies. These developments may adversely affect our business, financial condition and results of operations.
The existence of an overhang, whether sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate. 55 Table of Contents
The existence of an overhang, whether sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate. 57 Table of Contents ITEM1B. UNRESOLVED STAFF COMMENTS Not applicable. ITEM 1C .
If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, or misappropriation of our intellectual property by third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results and financial condition.
If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, or misappropriation of our intellectual property by third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results and financial condition. 26 Table of Contents Being a public company is expensive and administratively burdensome.
The impact of this or any further downgrades to the U.S. government’s sovereign credit rating or its perceived creditworthiness could adversely affect the U.S. and global financial markets and economic conditions. Any of these disruptions could adversely affect our businesses, results of operations and financial condition.
The impact of this or any further downgrades to the U.S. government’s sovereign credit rating or its perceived creditworthiness could adversely affect the U.S. and global financial markets and economic conditions.
Interruptions in these systems, whether due to system failures, computer viruses, physical or electronic break-ins or other catastrophic events, could affect the security or availability of our solutions and prevent or inhibit the ability of our customers to access our solutions.
We do not maintain redundant systems or facilities for some of these services. Interruptions in these systems, whether due to system failures, computer viruses, physical or electronic break-ins or other catastrophic events, could affect the security or availability of our solutions and prevent or inhibit the ability of our customers to access our solutions.
However, as our e-commerce business expands, we expect to market our products and services in China, and perhaps establish operations in China at a future time, all of which would expose our business, prospects, financial condition and results of operations to an increasingly significant extent to political, economic and social conditions in China generally.
We currently market our products and services in China, and may establish operations in China at a future time, all of which may expose our business, prospects, financial condition and results of operations to an increasingly significant extent to political, economic, and social conditions in China generally.
We have incurred significant net losses since our inception. For the years ended December 31, 2023, and 2022, we have incurred net losses of approximately $12.4 million, and $9.2 million, respectively. As of December 31, 2023, we had an accumulated deficit of approximately $34.9 million.
We have incurred significant net losses since our inception. For the years ended December 31, 2024, and 2023, we have incurred net losses of approximately $23.1 million, and $12.4 million, respectively. As of December 31, 2024, we had an accumulated deficit of approximately $49.0 million.
Should we fail to satisfy the Nasdaq continued listing standards, the trading price of our common stock could suffer and the trading market for our common stock and warrants may be less liquid, and our common stock price and warrant price may be subject to increased volatility, making it difficult or impossible to sell shares of our common stock and warrants. 54 Table of Contents The provisions of our Nasdaq listed Warrants could discourage the acquisition of us by a third party .
Should we fail to satisfy the Nasdaq continued listing standards, the trading price of our common stock could suffer and the trading market for our common stock and warrants may be less liquid, and our common stock price and warrant price may be subject to increased volatility, making it difficult or impossible to sell shares of our common stock and warrants.
Reduced demand for our products and services could be caused by several circumstances, such as: ● A cure or vaccine for chronic care conditions; ● The emergence of new diseases resistant to available medications; ● Shifts to treatment regimens other than those we offer; ● New methods of delivery of existing medications or of injectable or infusible medications that do not require our specialty pharmacy and disease management services; ● Recalls of the medications we sell; ● Adverse reactions caused by the medications we sell; and ● The expiration of or challenge to the drug patents on the medications we sell. 49 Table of Contents Our revenues could be adversely affected if new drugs or combination therapies are developed and prescribed to our patients that have a reimbursement rate less than that of the current drug therapies our patients receive.
Reduced demand for our products and services could be caused by several circumstances, such as: ● A cure or vaccine for chronic care conditions; ● The emergence of new diseases resistant to available medications; ● Shifts to treatment regimens other than those we offer; ● New methods of delivery of existing medications or of injectable or infusible medications that do not require our specialty pharmacy and disease management services; ● Recalls of the medications we sell; ● Adverse reactions caused by the medications we sell; and ● The expiration of or challenge to the drug patents on the medications we sell.
As a result, our information systems require an ongoing commitment of significant resources to maintain and enhance existing systems and develop new systems in order to keep pace with continuing changes in information technology, emerging cybersecurity risks and threats, evolving industry and regulatory standards and changing preferences of our customers.
As a result, our information systems require an ongoing commitment of significant resources to maintain and enhance existing systems and develop new systems in order to keep pace with continuing changes in information technology, emerging cybersecurity risks and threats, evolving industry and regulatory standards and changing preferences of our customers. 54 Table of Contents Our solutions are designed to operate without interruption in accordance with our service level commitments.
Supply chain disruptions, resulting from factors such as the COVID-19 pandemic, labor supply and shipping container shortages, have impacted, and may continue to impact, us and our third-party manufacturers and suppliers.
Supply chain disruptions, resulting from factors such as past pandemics and other health crises, labor supply and shipping container shortages, have impacted, and may continue to impact, us and our third-party manufacturers and suppliers.
Any termination or material change in our relationship with Amazon or Alibaba could have a material adverse effect on our business, financial condition, results of operations and prospects. We expect that Alibaba will represent one of our primary online marketing channels.
Any termination or material change in our relationship with Amazon or Alibaba could have a material adverse effect on our business, financial condition, results of operations and prospects. Any termination or material change in our relationship with Amazon or Alibaba could have a material adverse effect on our business, financial condition, results of operations and prospects.
Any adverse development in our relationship with these online markets could result in an immediate and significant adverse impact in our online marketing presence, revenues, operating results and financial condition.
We expect that Alibaba will represent one of our primary online marketing channels. Any adverse development in our relationship with these online markets could result in an immediate and significant adverse impact in our online marketing presence, revenues, operating results and financial condition.
These changes could affect drug utilization trends as well as the financial health and number of covered lives of our clients, resulting in an adverse effect on our business, financial condition, results of operations and cash flows.
Our business is affected by the economy in general, including changes in consumer purchasing power, preferences and/or spending patterns. These changes could affect drug utilization trends as well as the financial health and number of covered lives of our clients, resulting in an adverse effect on our business, financial condition, results of operations and cash flows.
Competition may also come from other sources in the future. Thus, competition could have an adverse effect on our business, financial position and results of operations. Existing and new government legislative and regulatory action could adversely affect our business, financial position and results of operations. The retail drugstore business is subject to numerous federal, state and local laws and regulations.
Competition may also come from other sources in the future. Thus, competition could have an adverse effect on our business, financial position and results of operations. 43 Table of Contents Existing and new government legislative and regulatory action could adversely affect our business, financial position and results of operations.
If the products sold by merchants in our ecosystem are not delivered in proper condition, on a timely basis or at shipping rates that are commercially acceptable to marketplace participants, our business and prospects, as well as our financial condition and results of operations could be materially and adversely affected.
If the products sold by merchants in our ecosystem are not delivered in proper condition, on a timely basis or at shipping rates that are commercially acceptable to marketplace participants, our business and prospects, as well as our financial condition and results of operations could be materially and adversely affected. 35 Table of Contents Failure to deal effectively with any fraud perpetrated and fictitious transactions conducted in our ecosystem, and other sources of customer dissatisfaction, would harm our business.
There are numerous federal, state and local laws around the world regarding privacy and the collection, processing, storing, sharing, disclosing, using and protecting of personal information and other data, the scope of which are changing, subject to differing interpretations, and which may be costly to comply with and may be inconsistent between countries and jurisdictions or conflict with other rules.
Concerns about our practices with regard to the collection, use or disclosure of personal information or other privacy related matters, even if unfounded, could harm our business and operating results. 53 Table of Contents There are numerous federal, state and local laws around the world regarding privacy and the collection, processing, storing, sharing, disclosing, using and protecting of personal information and other data, the scope of which are changing, subject to differing interpretations, and which may be costly to comply with and may be inconsistent between countries and jurisdictions or conflict with other rules.
Techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently and may be difficult to detect for long periods of time. 51 Table of Contents Because our products and services involve the storage, use and transmission of personal information of consumers, we and other industry participants have been and expect to routinely be the target of attempted cyber and other security threats by outside third parties, including technically sophisticated and well-resourced bad actors attempting to access or steal the data we store.
Because our products and services involve the storage, use and transmission of personal information of consumers, we and other industry participants have been and expect to routinely be the target of attempted cyber and other security threats by outside third parties, including technically sophisticated and well-resourced bad actors attempting to access or steal the data we store.
In particular, in the event that such a conflict of interest arises at a meeting of our board of directors, a director who has such a conflict will abstain from voting for or against the approval of such transaction. In accordance with applicable laws, our directors are required to act honestly, in good faith and in our best interests.
In particular, in the event that such a conflict of interest arises at a meeting of our board of directors, a director who has such a conflict will abstain from voting for or against the approval of such transaction.
Other legislative or market-driven changes in the health care system that we cannot anticipate could also materially adversely affect our results of operations, financial position and/or cash flow from operations.
We cannot predict what effect, if any, these proposals may have on its retail and pharmacy services businesses. Other legislative or market-driven changes in the health care system that we cannot anticipate could also materially adversely affect our results of operations, financial position and/or cash flow from operations.
In addition to these developments having adverse consequences for us and our portfolio companies, the operations of the Company have been, and could continue to be, adversely impacted, including through quarantine measures and travel restrictions imposed on its personnel or service providers based or temporarily located in affected countries, or any related health issues of such personnel or service providers. 22 Table of Contents As the future impact of COVID-19 and its variants is difficult to predict, the extent to which they could negatively affect our operating results or the duration of any potential business or supply-chain disruption is uncertain.
In addition to these developments having adverse consequences for us and our portfolio companies, the operations of the Company have been, and could continue to be, adversely impacted, including through quarantine measures and travel restrictions imposed on its personnel or service providers based or temporarily located in affected countries, or any related health issues of such personnel or service providers.
In addition, if and to the extent the cost structure of the Amazon marketplace listing changes, such an increase could have a material adverse effect on the Company’s sales through this platform. 30 Table of Contents Creating and maintaining a trusted status of our online marketing presence or ecosystem will be critical to our viability and growth, and any failure to do so could severely damage our reputation, which would have a material adverse effect on our business, financial condition, results of operations and prospects.
Creating and maintaining a trusted status of our online marketing presence or ecosystem will be critical to our viability and growth, and any failure to do so could severely damage our reputation, which would have a material adverse effect on our business, financial condition, results of operations and prospects.
Failure to comply or ensure our employees, business partners and service providers to comply with these requirements, whether alleged or actual, could subject us to regulatory investigations and liabilities, which would materially and adversely affect our business operations, customer relationships, reputation and the trading price of our securities. 35 Table of Contents If the logistics service providers used by our merchants fail to provide reliable logistics services, our business and prospects, as well as our financial condition and results of operations, may be materially and adversely affected.
Failure to comply or ensure our employees, business partners and service providers to comply with these requirements, whether alleged or actual, could subject us to regulatory investigations and liabilities, which would materially and adversely affect our business operations, customer relationships, reputation and the trading price of our securities.
Additionally, if vendors, developers or other third parties that we work with violate applicable laws or our policies, such violations may also put consumer or dealer information at risk and could in turn harm our reputation, business and operating results. 52 Table of Contents If we are unable to successfully execute on cross-selling opportunities of our solutions the growth of our business and financial performance could be harmed.
Additionally, if vendors, developers or other third parties that we work with violate applicable laws or our policies, such violations may also put consumer or dealer information at risk and could in turn harm our reputation, business and operating results.
Certain provisions of our Nasdaq listed Warrants could make it more difficult or expensive for a third party to acquire us. The Nasdaq listed Warrants prohibit us from engaging in certain transactions constituting “fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the warrants.
The Nasdaq listed Warrants prohibit us from engaging in certain transactions constituting “fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the warrants. These and other provisions of the Nasdaq listed Warrants could prevent or deter a third party from acquiring us even where the acquisition could be beneficial to you.
To the extent that customers elect to perform internally any of the business processes our solutions address, either because they believe they can provide such processes more efficiently internally or otherwise, we may lose such customers, or the volume of our business with such customers may be reduced, which could harm our business, results of operations or financial condition.
To the extent that customers elect to perform internally any of the business processes our solutions address, either because they believe they can provide such processes more efficiently internally or otherwise, we may lose such customers, or the volume of our business with such customers may be reduced, which could harm our business, results of operations or financial condition. 51 Table of Contents If our solutions do not interoperate with our customers ’ or their vendors ’ networks and infrastructures, or if customers or their vendors implement new system updates that are incompatible with our solutions, sales of those solutions could be adversely affected.
These types of events may adversely affect operating results for us. For example, the COVID-19 pandemic has led to, and for an unknown period of time will continue to lead to, disruptions in local, regional, national and global markets and economies affected thereby, including the United States.
These types of events may adversely affect operating results for us. For example, past pandemics and other health crises have led to disruptions in local, regional, national and global markets and economies affected thereby, including the United States.
Although we maintain insurance for our business, the coverage under our policies may not be adequate to compensate us for all losses that may occur.
Although we maintain insurance for our business, the coverage under our policies may not be adequate to compensate us for all losses that may occur. In addition, we cannot provide assurance that we will continue to be able to obtain adequate insurance coverage at an acceptable cost.
Elevated inflation may result in further currency fluctuations, increased operating costs (including our labor costs), reduced liquidity, and limitations on our ability to access credit or otherwise raise debt and equity capital. In addition, the United States Federal Reserve has raised, and may again raise, interest rates in response to concerns about inflation.
For example, inflation rates, particularly in the United States and UK, have seen increased levels compared to recent history. Elevated inflation may result in further currency fluctuations, increased operating costs (including our labor costs), reduced liquidity, and limitations on our ability to access credit or otherwise raise debt and equity capital.
There can be no assurance that currency exchange rate fluctuations will not adversely affect the results of operations, financial condition and cash flows.
Fluctuations in currency exchange rates may therefore have an impact on our results as expressed in U.S. dollars. There can be no assurance that currency exchange rate fluctuations will not adversely affect the results of operations, financial condition and cash flows.
There can be no assurance that we will prevail in any litigation. In addition, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors. Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition and results of operations.
If we resort to litigation to enforce our intellectual property rights, this litigation could result in substantial costs and a diversion of our managerial and financial resources. There can be no assurance that we will prevail in any litigation. In addition, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors.
For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. The growth rate of the Chinese economy has gradually slowed since 2010.
For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. Any prolonged slowdown in the Chinese economy may reduce the demand for our products and services and materially and adversely affect our business and results of operations.
It is not currently possible to predict how long it will take for these supply chain disruptions to cease or ease.
Additionally, the impact that supply chain disruptions have on our manufacturers and suppliers is not within our control. It is not currently possible to predict how long it will take for these supply chain disruptions to cease or ease.
Furthermore, this uncertainty could negatively impact the economies of other countries in which we operate. Currency exchange rate fluctuations may affect the results of operations. To the extent that we are successful in broadening the reach of our online e-commerce marketing into other countries we will have transactions denominated in an increasing number and variety of currencies.
To the extent that we are successful in broadening the reach of our online e-commerce marketing into other countries we will have transactions denominated in an increasing number and variety of currencies. We will be subject to currency exchange rate risk to the extent that our costs are denominated in currencies other than those in which we earn revenues.
In addition, policing any unauthorized use of our intellectual property is difficult, time-consuming and costly and the steps we have taken may be inadequate to prevent the misappropriation of our intellectual property. If we resort to litigation to enforce our intellectual property rights, this litigation could result in substantial costs and a diversion of our managerial and financial resources.
We may not be able to effectively protect our intellectual property rights or to enforce our contractual rights. In addition, policing any unauthorized use of our intellectual property is difficult, time-consuming and costly and the steps we have taken may be inadequate to prevent the misappropriation of our intellectual property.
Failure to remain compliant with the fulfillment practices on Amazon’s platform could have a material impact on our business, results of operations, financial condition and prospects. Risks Related to Our e-Commerce Business Our sales may be impacted should there be a disruption of service to our Amazon or Alibaba online storefronts.
Failure to remain compliant with the fulfillment practices on Amazon’s platform could have a material impact on our business, results of operations, financial condition and prospects.
In addition, we cannot provide assurance that we will continue to be able to obtain adequate insurance coverage at an acceptable cost. 53 Table of Contents Risks Related to Our Securities You may experience dilution of your ownership interests because of the future issuance of additional shares of our common or preferred stock or other securities that are convertible into or exercisable for our common or preferred stock.
Risks Related to Our Securities You may experience dilution of your ownership interests because of the future issuance of additional shares of our common or preferred stock or other securities that are convertible into or exercisable for our common or preferred stock.
Any future investigation may cause publicity, regardless of the eventual result of the investigation, or its underlying merits, that would cause potential patients to avoid us, reducing our net sales and profits and causing our stock price to decline. The U.S. capital markets are currently experiencing extreme volatility and disruption following the global outbreak of COVID-19 and other global events.
Any future investigation may cause publicity, regardless of the eventual result of the investigation, or its underlying merits, that would cause potential patients to avoid us, reducing our net sales and profits and causing our stock price to decline. Disruptions in the capital markets in the past have resulted in illiquidity in parts of the capital markets we serve.
A weak or declining economy, supply disruptions or international trade disputes could also strain our third-party suppliers, possibly resulting in supply disruption. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current and future economic climate and financial market conditions could adversely impact our business.
Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current and future economic climate and financial market conditions could adversely impact our business.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe lease was entered into and commenced on August 1, 2020 with a 66-month term and expires on February 1, 2026. The lease agreement calls for monthly payments beginning February 1, 2021 of $4,310, with an escalating payment schedule each year thereafter. Pharmco 1204 Our Pharmco 1204 Davie location moved to North Miami Beach, Florida during August 2021.
Biggest changeDuring January 2025, the lease was extended for an additional 12 months through February 2026 with monthly payments of approximately $5,600. Pharmco 1103 We rent pharmacy space at 1160 South Semoran Blvd, Suites D, E, F, Orlando, Florida. The lease was entered into and commenced on August 1, 2020 with a 66-month term and expires on February 1, 2026.
The lease commenced upon occupancy on June 13, 2022, and will expire on August 31, 2027. e-Commerce location 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 $37,000, based on a yearly average exchange rate of 1.24 GBP:USD.
The lease commenced upon occupancy on June 13, 2022, and will expire on August 31, 2027. e-Commerce locations 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.
Item 2. Description of Property. Corporate Office On December 2, 2021, the Company entered into a 62-month lease for 4,141 square feet of office space in Coconut Grove, Florida, for approximately $186,000 annually. The rent increases 3% annually.
ITEM 2. PROPERTIES Corporate Office On December 2, 2021, the Company entered into a 62-month lease for 4,141 square feet of office space in Coconut Grove, Florida, for approximately $186,000 annually. The rent increases 3% annually.
We rent approximately 2,200 square foot of retail and pharmacy space. The lease is for five years and commenced on September 1, 2021. The lease agreement calls for monthly payments of approximately $5,200, with an escalating payment schedule each year thereafter.
The lease agreement calls for monthly payments beginning February 1, 2021 of $4,310, with an escalating payment schedule each year thereafter. Pharmco 1204 We rent approximately 2,200 square feet of retail and pharmacy space at 901 North Miami Beach Blvd., North Miami Beach, Florida. The lease is for five years and commenced on September 1, 2021.
The original lease expired in March 2021 and automatically renewed for an additional 48 months through February 2025. The lease agreement calls for monthly payments of approximately $4,300, with an escalating payment schedule each year thereafter. Pharmco 1103 We rent pharmacy space at 1160 South Semoran Blvd, Suites D, E, F, Orlando, Florida.
Pharmco 1002 We rent pharmacy space at 3208 2 nd Avenue North, Bays 2, 3 and 4, Palm Springs, FL 33461. The original lease expired in March 2021 and automatically renewed for an additional 48 months through February 2025. The lease agreement calls for monthly payments of approximately $4,300, with an escalating payment schedule each year thereafter.
We believe that we have adequate space for our anticipated needs and that suitable additional space will be available at commercially reasonable prices as needed.
The lease agreement calls for monthly payments of approximately $5,200, with an escalating payment schedule each year thereafter. We believe that we have adequate space for our anticipated needs and that suitable additional space will be available at commercially reasonable prices as needed. 59 Table of Contents
The Poole lease was renewed on November 1, 2023, and will expire October 31, 2024. Pharmacy locations Pharmco 901 We own approximately 11,000 sq. ft. facility at 400 Ansin Blvd, Bay A, Hallandale, Florida. The monthly mortgage payment is approximately $12,000.
The lease was entered into and commenced in April 2024 with an expiration date of April 2026. The lease agreement calls for monthly payments of approximately $4,800. Pharmacy locations Pharmco 901 We own an approximately 11,000 sq. ft. facility at 400 Ansin Blvd, Suite A, Hallandale, Florida. The monthly mortgage payment is approximately $12,000.
Removed
During December 2020, Pharmco 901 moved a majority of its pharmacy operations from their North Miami Beach, Florida location to the new 11,000 square foot pharmacy facility in our administrative offices in., Hallandale Beach, Florida. 56 Table of Contents Pharmco 1002 We rent pharmacy space at 3208 2 nd Avenue North, Bays 2, 3 and 4, Palm Springs, FL 33461.
Added
The Poole lease was renewed on October 6, 2022, which expired October 31, 2023 and was renewed for an additional twelve months. On August 1, 2024 we 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.
Added
This is a three-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. Outfitter rents office space at 2727 Old Elm Hill Pike, Nashville, Tennessee.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFrom time to time, the Company may become involved in litigation relating to claims arising out of our operations in the normal course of business.
Biggest changeAt this time, we cannot reasonably estimate the amount of the loss. From time to time, the Company may become involved in litigation relating to claims arising out of our operations in the normal course of business.
Other than the matter described above, 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. 57 Table of Contents Item 4.
Other than the matter described above, 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.
Removed
Item 3. Legal Proceedings. 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 was not for cause and that he is owed compensation payable under his June 2, 2021 employment agreement. The Company’s position is that Mr.
Added
ITEM 3. LEGAL PROCEEDINGS On October 28, 2024, Alan Jay Weisberg, the former Chief Executive Officer and Chairman of Progressive Care Inc. (“RXMD”), filed a putative class action suit on behalf of himself and all other former RXMD stockholders against NextPlat, Charles M. Fernandez, the Chief Executive Officer and a director of NextPlat, and Rodney Barreto, a director of NextPlat.
Removed
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.
Added
The complaint purports to allege a breach of fiduciary duty by NextPlat and Messrs.
Removed
Seifert including, but not 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.
Added
Fernandez and Barreto in connection with the merger of RXMD with and into a wholly-owned subsidiary of NextPlat (the “Merger”), which Merger was completed on October 1, 2024 following approval by the stockholders of each of NextPlat and RXMD in stockholder meetings held on September 13, 2024 by NextPlat and RXMD, respectively.
Removed
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. On July 5, 2022, Mr. Seifert moved to dismiss NextPlat’s Second Amended Complaint, and filed a Counterclaim against the Company and its Chief Executive Officer, Charles M. Fernandez.
Added
Among other things, the complaint asserts that the consideration paid to Mr. Weisberg and the other RXMD stockholders in connection with the Merger was insufficient. The monetary relief requested in the complaint includes compensatory and rescissory damages in an unspecified dollar amount. The complaint is pending in the Court of Chancery of the State of Delaware.
Removed
In his Counterclaim, Mr. Seifert seeks legal remedies in connection with the Company’s June 22, 2021, termination of his employment. Mr. Seifert also claims Retaliatory Discharge under Florida’s Private Whistleblower Act, Defamation, and Negligent Misrepresentation. A jury trial is set to occur during the trial court's two-week trial calendar, starting August 21, 2024.
Added
The caption is Alan Jay Weisberg v. Charles M. Fernandez, Rodney Barreto and Nextplat Corp., and the case number is C.A. No. 20. 24-1097-MTZ. The Company’s management does not believe that the Weisberg’s claim is meritorious and plans to vigorously defend against the suit.
Added
The Company is in the process of preparing a response to the complaint and has filed a motion to dismiss the complaint. 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.
Added
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.
Added
On June 17, 2024, Progressive Care was notified of a potential claim that a former employee allegedly suffered a loss due to an alleged breach by Progressive Care of an employment contract with the former employee. Management believes, based on discussions with its legal counsel, that Progressive Care has meritorious defenses against the former employee’s claim.
Added
Since receipt of the notice of 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our shares have been listed on the Nasdaq Capital Market since May 28, 2021. Our common stock and warrants have been trading on the Nasdaq Capital Market under the symbols “NXPL” and “NXPLW,” respectively, since January 21, 2022.
Biggest changeITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been listed on the Nasdaq Global Market since May 28, 2021. Our common stock and warrants have been trading on the Nasdaq Global Market under the symbols “NXPL” and “NXPLW,” respectively, since January 21, 2022.
Holders of Common Equity As of March 26, 2024, we had 18,724,596 shares of our common stock issued and outstanding held by approximately 491 stockholders of record. Dividend Policy We have never paid any cash dividends on our capital stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future.
Holders of Common Equity As of March 17, 2025, we had 25,963,051 shares of our common stock issued and outstanding held by approximately 674 stockholders of record. Dividend Policy We have never paid any cash dividends on our capital stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future.
Removed
Equity Compensation Plan Information See Part III, Item 12 to this Annual Report on Form 10-K for information relating to securities authorized for issuance under our equity compensation plans. 58 Table of Contents Item 6. [Reserved].
Added
Equity Compensation Plan Information The following table outlines our Equity Compensation Plan information: Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted- average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by security holders: Equity compensation plans 2020 Incentive Plan 523,000 $ 0.26 50,600 Equity compensation plans 2021 Incentive Plan 295,000 0.32 917,971 Equity compensation plans not approved by security holders: 2018 Incentive Plan - - 1,333 Equity compensation issued pursuant to individual compensation arrangements 1,677,421 2.51 - Total 2,495,421 $ 3.09 969,904 61 Table of Contents ITEM 6. [RESERVED]

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. [RESERVED] 59 Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations 59 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 71 Item 8. Financial Statements and Supplementary Data 71 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 71 Item 9A. Controls and Procedures 72
Biggest changeItem 6. [RESERVED] 62 Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations 62 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 75 Item 8. Financial Statements and Supplementary Data 75 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 75 Item 9A. Controls and Procedures 76

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe results of operations for the year ended December 31, 2023 include results of operations for the Progressive Care subsidiary for the period from the date of acquisition, July 1, 2023, to December 31, 2023. 64 Table of Contents Results of Operations Our revenues were as follows (in thousands): Year Ended December 31, 2023 2022 $ Change % Change Revenue, net $ 37,756 $ 11,710 $ 26,046 222 % Cost of revenue 26,445 9,221 17,224 187 % Gross profit 11,311 2,489 8,822 354 % Operating expenses 34,539 9,692 24,847 256 % Loss before other (income) expense (23,228 ) (7,203 ) (16,025 ) 222 % Other expense (937 ) 132 (1,069 ) (810 )% Loss before income taxes and equity in net loss of affiliate (22,291 ) (7,335 ) (14,956 ) 204 % Income taxes (28 ) (87 ) 59 nm % Loss before equity in net loss of affiliate (22,319 ) (7,422 ) (14,897 ) 201 % Gain on remeasurement of fair value of equity interest in affiliate prior to acquisition 11,352 - 11,352 100 % Equity in net loss of affiliate (1,440 ) (1,739 ) 299 (17 )% Net loss (12,407 ) (9,161 ) (3,246 ) 35 % Net loss attributable to noncontrolling interest 8,629 - 8,629 100 % Net loss attributable to NextPlat Corp $ (3,778 ) $ (9,161 ) $ 5,383 (59 )% nm = not meaningful For the twelve months ended December 31, 2023 and 2022, we recognized overall revenue from operations of approximately $37.8 million and $11.7 million, respectively, an overall increase of approximately $26.0 million for the twelve months ended December 31, 2023, when compared to the same period in 2022.
Biggest changeOur revenues were as follows (in thousands): Years Ended December 31, 2024 2023 $ Change % Change Revenue, net $ 65,483 $ 37,756 $ 27,727 73 % Cost of revenue 49,254 26,445 22,809 86 % Gross profit 16,229 11,311 4,918 43 % Operating expenses 39,853 34,539 5,314 15 % Loss before other income (23,624 ) (23,228 ) (396 ) 2 % Other income (570 ) (937 ) 367 (39 )% Loss before income taxes and equity in net loss of affiliate (23,054 ) (22,291 ) (763 ) 3 % Income taxes (71 ) (28 ) (43 ) 154 % Loss before equity in net loss of affiliate (23,125 ) (22,319 ) (806 ) 4 % Gain on remeasurement of fair value of equity interest in affiliate prior to acquisition — 11,352 (11,352 ) (100 )% Equity in net loss of affiliate — (1,440 ) 1,440 (100 )% Net loss (23,125 ) (12,407 ) (10,718 ) 86 % Net loss attributable to noncontrolling interest 9,100 8,629 471 5 % Net loss attributable to NextPlat Corp $ (14,025 ) $ (3,778 ) $ (10,247 ) 271 % For the years ended December 31, 2024 and 2023, we recognized overall revenue from operations of approximately $65.5 million and $37.8 million, respectively, an overall increase of approximately $27.7 million for the year ended December 31, 2024, when compared to the year ended December 31, 2023.
The voting agreement is irrevocable and perpetual in term. As a result of the common stock purchase warrant exercises and the entry into the voting agreement, NextPlat concluded that there was a change in control of Progressive Care.
The voting agreement is irrevocable and perpetual in term. As a result of the common stock purchase warrant exercises and the entry into the voting agreement, NextPlat concluded that there was a change in control in Progressive Care.
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.
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 and delivered is recognized as revenue.
See the section above entitled "- Overview - Business acquisition of Progressive Care, Inc." Off-balance Sheet Arrangements We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties.
See the section above entitled “ - Overview - Business acquisition of Progressive Care, Inc. ” Off-balance Sheet Arrangements We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties.
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. 62 Table of Contents Healthcare Operations: We recognize product sales from prescriptions dispensed to patients (customers) at the time the drugs are physically delivered to a customer or when a customer picks up their prescription, which is the point in time when control transfers to the customer. 340B dispensing fees are a component of 340B contract revenue, which are recognized at the time the drugs are received by the patient, by either delivery or customer pick up.
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. 66 Table of Contents Healthcare Operations: We recognize product sales from prescriptions dispensed to patients (customers) at the time the drugs are physically delivered to a customer or when a customer picks up their prescription, which is the point in time when control transfers to the customer. 340B dispensing fees are a component of 340B contract revenue, which are recognized at the time the drugs are received by the patient, by either delivery or customer pick up.
This standard became effective for the financial statements issues by public companies for the annual and interim periods beginning after December 15, 2018. Management adopted this standard on January 1, 2019. The Company estimated the fair value of stock options granted using the Black-Scholes option-pricing formula.
This standard became effective for the financial statements issued by public companies for the annual and interim periods beginning after December 15, 2018. Management adopted this standard on January 1, 2019. The Company estimated the fair value of stock options granted using the Black-Scholes option-pricing formula.
The Company’s determination of the fair value using the option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables. 63 Table of Contents Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of over the value assigned to net tangible and identifiable intangible assets.
The Company’s determination of the fair value using the option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables. 67 Table of Contents Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of over the value assigned to net tangible and identifiable intangible assets.
Pursuant to the DCA, the NextPlat Investors agreed to convert the total approximately $2.9 million of outstanding principal and accrued and unpaid interest under the A&R Note to Proogressive Care common stock at a conversion price of $2.20 per share (the “Debt Conversion”).
Pursuant to the DCA, the NextPlat Investors agreed to convert the total approximately $2.9 million of outstanding principal and accrued and unpaid interest under the A&R Note to Progressive Care common stock at a conversion price of $2.20 per share (the “Debt Conversion”).
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations Cautionary Notice Regarding Forward Looking Statements This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including those relating to our liquidity, our belief that we will not have sufficient cash and borrowing capacity to meet our working capital needs for the next 12 months without further financing, our expectations regarding acquisitions and new lines of business, gross profit, gross margins and capital expenditures.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Notice Regarding Forward Looking Statements This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including those relating to our liquidity, our belief that we will not have sufficient cash and borrowing capacity to meet our working capital needs for the next 12 months without further financing, our expectations regarding acquisitions and new lines of business, gross profit, gross margins and capital expenditures.
Fernandez and Barreto were nominated for election to Progressive Care’s Board of Directors In addition, on August 30, 2022, NextPlat Corp, Messrs. Fernandez and Barreto, and certain other investors (collectively, the “NextPlat Investors”) purchased from Iliad Research a Secured Convertible Promissory Note, dated March 6, 2019, made by Progressive Care to Iliad (the “Note”).
Fernandez and Barreto were nominated for election to Progressive Care’s Board of Directors. 63 Table of Contents In addition, on August 30, 2022, NextPlat Corp, Messrs. Fernandez and Barreto, and certain other investors (collectively, the “NextPlat Investors”) purchased from Iliad Research a Secured Convertible Promissory Note, dated March 6, 2019, made by Progressive Care to Iliad (the “Note”).
As of July 1, 2023, NextPlat has the right to control more than 50 percent of the voting interests in Progressive Care through the concurrent common stock purchase warrant exercises and voting agreement noted above.
As of July 1, 2023, NextPlat has the right to control more than 50 percent of the voting stock of Progressive Care through the concurrent common stock purchase warrant exercises and voting agreement noted above.
Fernandez and Barreto collectively owned approximately 53% of Progressive Care’s voting common stock. Also, on July 1, 2023, NextPlat and entered into a voting agreement with Messrs. Fernandez and Barreto 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 collectively owned approximately 53% of Progressive Care’s voting common stock. 64 Table of Contents Also, on July 1, 2023, NextPlat and entered into a voting agreement with Messrs. Fernandez and Barreto 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.
Progressive Care’s 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.
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.
Progressive Care’s pharmacies also provides contracted pharmacy services for 340B covered entities under the 340B Drug Discount Pricing Program. Under the terms of these agreements, Progressive Care’s pharmacies act as a pass-through for reimbursements on prescription claims adjudicated on behalf of the 340B covered entities in exchange for a dispensing fee per prescription.
Our pharmacies also provide contracted pharmacy services for 340B covered entities under the 340B Drug Discount Pricing Program. Under the terms of these agreements, our pharmacies act as a pass-through for reimbursements on prescription claims adjudicated on behalf of the 340B covered entities in exchange for a dispensing fee per prescription.
As of the date of this report, the Company’s existing cash resources and existing borrowing availability are sufficient to support planned operations for the next 12 months.
As of the date of this report, the Company’s existing cash resources are sufficient to support planned operations for the next 12 months.
Progressive Care are focused on improving the lives of patients with complex chronic diseases through a patient and provider engagement and their partnerships with payors, pharmaceutical manufacturers, and distributors. Progressive Care offer a broad range of solutions to address the dispensing, delivery, dosing, and reimbursement of clinically intensive, high-cost drugs.
Our healthcare operations are focused on improving the lives of patients with complex chronic diseases through a patient and provider engagement and their partnerships with payors, pharmaceutical manufacturers, and distributors. We offer a broad range of solutions to address the dispensing, delivery, dosing, and reimbursement of clinically intensive, high-cost drugs.
Beginning on July 1, 2023, the Company changed the accounting method for its investment in Progressive Care, which prior to July 1, 2023 had been accounted for as an equity method investment to consolidation under the voting interest model in FASB ASC Topic 805.
Beginning on July 1, 2023, the Company changed the accounting method for its investment in Progressive Care, which prior to July 1, 2023 had been accounted for as an equity method investment to consolidation under the voting interest model in FASB ASC Topic 805. Therefore, Progressive Care became a consolidated subsidiary of the Company on July 1, 2023.
The discussion should be read along with our financial statements and notes thereto contained elsewhere in this annual report. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements. Overview Business acquisition of Progressive Care, Inc.
The discussion should be read along with our financial statements and notes thereto contained elsewhere in this annual report. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.
Liquidity and Capital Resources 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 December 31, 2023, we had a cash balance of approximately $26.3 million. Our working capital was approximately $29.4 million at December 31, 2023.
Liquidity and Capital Resources 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 December 31, 2024, we had a cash balance of approximately $20.0 million. Our working capital was approximately $23.3 million at December 31, 2024.
The pharmacies also expanded revenue growth through the signing of new contract pharmacy service and data management contracts with 340B covered entities. Progressive Care provides data management and TPA services for 340B covered entities, pharmacy analytics, and programs to manage HEDIS Quality Measures including Medication Adherence.
The pharmacies also expanded revenue growth through the signing of new contract pharmacy service and data management contracts with 340B covered entities. Our healthcare operations also provide data management and TPA services for 340B covered entities, pharmacy analytics, and programs to manage HEDIS Quality Measures including Medication Adherence.
Progressive Care provides TPA ("Third Party Administration"), 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 for 340B covered entities under the 340B Drug Discount Pricing Program, and health practice risk management.
In addition, our healthcare operations provide Third Party Administration (“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 for 340B covered entities under the 340B Drug Discount Pricing Program, and health practice risk management.
Starting on July 1, 2023, Progressive Care became a consolidated subsidiary of the Company. 60 Table of Contents e-Commerce Operations: Leveraging the e-commerce experience of the Company’s management team and the Company’s existing e-commerce platforms, the Company has embarked upon the rollout of a state-of-the-art e-commerce platform to collaborate with businesses to optimize their ability to sell their goods online, domestically, and internationally, and enabling customers and partners to optimize their e-commerce presence and revenue, which we expect will become the focus of the Company’s business in the future.
Overview e-Commerce Operations: Leveraging the e-Commerce experience of the Company’s management team and the Company’s existing e-Commerce platforms, the Company has embarked upon the rollout of a state-of-the-art e-Commerce platform to collaborate with businesses to optimize their ability to sell their goods online, domestically, and internationally, and enabling customers and partners to optimize their e-commerce presence and revenue, which we expect will become the focus of the Company’s business in the future.
These estimates and assumptions are affected by management’s applications of accounting policies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
These include our specialized satellite tracking products, some of which operate using the Company’s many ground station-based network processors and can be used to track and monitor the location of cars, trucks, trailers, boats, containers, animals, and other remote assets.
These include our specialized satellite tracking products, some of which operate using the Company’s many ground station-based network processors and can be used to track and monitor the location of cars, trucks, trailers, boats, containers, animals, and other remote assets. We currently list approximately 500 products on Alibaba.com. The agreement will continue on a year-to-year basis.
Significant estimates made by management include, but are not limited to, assumptions used to calculate stock-based compensation, fair value of net assets acquired in the business combination with Progressive Care Inc. common stock and options issued for services, net realizable value of accounts 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, PBM fee estimates, and the estimates of the valuation allowance on deferred tax assets and corporate income taxes.
Significant estimates made by management include, but are not limited to, assumptions used to calculate stock-based compensation, fair value of net assets acquired in business combinations, common stock, warrants and options issued for services, net realizable value of accounts receivables and other receivables, the useful lives of property and equipment and intangible assets determining the potential impairment of long-lived assets and goodwill, the estimate of the fair value of the lease liability and related right of use assets, pharmacy benefit manager (“PBM”) fee estimates, inventory reserve estimates, and the estimates of the valuation allowance on deferred tax assets and corporate income taxes.
ClearMetrX's TPA services include management of wholesale accounts, patient eligibility with regard to the 340B drug program, development and review of 340B policies and procedures, and management of receivables. 61 Table of Contents Distribution of Our Products Through Alibaba On July 13, 2021, we announced that our Global Telesat Communications (“GTC”) unit entered into an agreement with Alibaba.com, the B2B (Business-to-Business) e-commerce website owned and operated by Alibaba Group Holding Limited, also known as Alibaba Group (NYSE: BABA; HKEX: 9988), a Chinese multinational technology company specializing in e-commerce, retail, internet, and technology.
Distribution of Our Products Through Alibaba On July 13, 2021, we announced that our Global Telesat Communications (“GTC”) unit entered into an agreement with Alibaba.com, the B2B (Business-to-Business) e-commerce website owned and operated by Alibaba Group Holding Limited, also known as Alibaba Group (NYSE: BABA; HKEX: 9988), a Chinese multinational technology company specializing in e-commerce, retail, internet, and technology.
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. 68 Table of Contents For the Year Ended December 31, 2023 2022 (in thousands) (in thousands) Net change in cash from: Operating activities $ (3,596 ) $ (3,602 ) Investing activities 5,199 (7,716 ) Financing activities 5,860 13,011 Effect of exchange rate on cash (47 ) (70 ) Change in cash 7,416 1,623 Cash at end of period $ 26,307 $ 18,891 Operating Activities Net cash flows used by operating activities totaled approximately $3.6 million and $3.6 million for the twelve months ended December 31, 2023 and 2022, respectively, and changed by approximately $0.0 million period over period.
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. 73 Table of Contents The following table summarizes our cash flows (in thousands): Years Ended December 31, 2024 2023 Net change in cash from: Operating activities $ (5,464 ) $ (3,596 ) Investing activities (953 ) 5,199 Financing activities 72 5,860 Effect of exchange rate on cash (2 ) (47 ) Change in cash (6,347 ) 7,416 Cash at end of year $ 19,960 $ 26,307 Cash Flow from Operating Activities Net cash flows used by operating activities totaled approximately $5.5 million and $3.6 million for the years ended December 31, 2024 and 2023, respectively, and changed by approximately $1.9 million period over period.
Professional fees were approximately $2.0 million and $1.6 million for the twelve months ended December 31, 2023 and 2022, respectively, an increase of approximately $0.4 million or 27.6%.
Professional fees were approximately $4.4 million and $2.0 million for the years ended December 31, 2024 and 2023, respectively, an increase of approximately $2.4 million or 122.2%.
Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies, grouped by our activities, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.
We believe the following critical accounting policies, grouped by our activities, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.
These fees vary by the covered entity and the level of services provided by Progressive Care. Progressive Care’s focus is on complex chronic diseases that generally require multiyear or lifelong therapy, which drives recurring revenue and sustainable growth.
These fees vary by the covered entity and the level of services we provide. Our healthcare operations are focused on complex chronic diseases that generally require multiyear or lifelong therapy, which drives recurring revenue and sustainable growth.
We accrue an estimate of PBM fees, including direct and indirect remuneration (“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.
Through December 31, 2023, the Company accrued 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.
To determine the fair value of the reporting unit, we use a discounted cash flow model with market-based support as our valuation technique to measure the fair value for our reporting unit.
We perform the required annual impairment tests of goodwill at the end of each fiscal year on our reporting unit. To determine the fair value of the reporting unit, we use a discounted cash flow model with market-based support as our valuation technique to measure the fair value for our reporting unit.
On August 30, 2022, NextPlat entered into a Securities Purchase Agreement (the “SPA”) between NextPlat and Progressive Care, under which NextPlat, its Executive Chairman and Chief Executive Officer, Charles M. Fernandez, board member, Rodney Barreto, and certain other investors invested an aggregate of $8.3 million into Progressive Care.
(“Progressive Care”), under which NextPlat, its Executive Chairman and Chief Executive Officer, Charles M. Fernandez, board member, Rodney Barreto, and certain other investors invested an aggregate of $8.3 million into Progressive Care.
Salaries, wages and payroll taxes were approximately $6.6 million and $2.6 million for twelve months ended December 31, 2023 and 2022, respectively, an increase of approximately $4.1 million or 159.0%.
Salaries, wages and payroll taxes were approximately $11.4 million and $6.6 million for the years ended December 31, 2024 and 2023, respectively, an increase of approximately $4.8 million or 72.2%.
The increase in revenue was primarily attributable and increase in healthcare operations of approximately $26.8 million as a result of the Progressive Care acquisition on July 1, 2023, and offset by a decrease in e-Commerce revenue of approximately $0.7 million.
The increase in revenue was primarily attributable to an increase of approximately $24.9 million from the Healthcare Operations reportable segment as a result of the Progressive Care acquisition on July 1, 2023, and approximately $2.8 million as it relates to the e-Commerce Operations reportable segment as a result of the acquisition of Outfitter.
Factors contributing to the increase are described below. Selling, general and administrative (“SG&A”) expenses were approximately $9.9 million and $5.1 million for twelve months ended December 31, 2023 and 2022, respectively, an increase of approximately $4.8 million or 94.9%.
Factors contributing to the increase are described below. Selling, general and administrative expenses were approximately $7.9 million and $9.9 million for the years ended December 31, 2024 and 2023, respectively, a decrease of approximately $2.1 million or 20.7%.
Critical Accounting Policies and Estimates Our consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, estimated asset lives, impairments and bad debts.
Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, estimated asset lives, impairments and bad debts. These estimates and assumptions are affected by management’s applications of accounting policies.
For the twelve months ended December 31, 2023, overall revenues were approximately $37.8 million compared to $11.7 million of revenues for the twelve months ended December 31, 2022, an increase in of approximately $26.0 million or 222.4%.
For the year ended December 31, 2024, overall revenues were approximately $65.5 million compared to $37.8 million for the year ended December 31, 2023, an increase of approximately $27.7 million or 73.4%.
The increase was mainly attributable to legal and consulting fees as it relates to the healthcare operations as a result of the Progressive Care acquisition as of July 1, 2023, of approximately $0.4 million. Professional fees associated with our e-Commerce operations remained flat year over year.
The increase was mainly attributable to the settlement of litigation and associated legal fees with the e-Commerce Operations of approximately $1.3 million, legal and consulting fees as it relates to the merger of Progressive Care of approximately $0.6 million, and other professional and accounting fees associated with the Healthcare Operations of approximately $0.5 million.
Loss before other (income) expense increased by approximately $16.0 million for the twelve months ended December 31, 2023, when compared to the twelve months ended December 31, 2022 , as a result of the increase in gross profit of approximately $8.8 million, offset by the increase in operating expenses of approximately $24.8 million, which is mainly attributable to the goodwill impairment charge of approximately $13.9 million during 2023.
Our loss before other income increased by approximately $0.4 million for the year ended December 31, 2024, when compared to the year ended December 31, 2023, as a result of the increase in operating expenses of approximately $5.3 million, offset by the increase in gross profit of approximately $4.9 million.
The increase for the twelve months ended December 31, 2023, was mainly attributable to the increase in stock-based compensation of approximately $2.4 million, other operating expenses as it relates to the e-Commerce operations of approximately $0.5 million, and approximately $1.9 million as it relates to operating expenses of the healthcare operations as a result of the Progressive Care acquisition on July 1, 2023.
The decrease for the year ended December 31, 2024, was mainly attributable to a decrease in stock-based compensation of approximately $3.8 million due to non-recurring grants fully vested, offset by an increase of approximately $1.5 million relating to operating expenses of the Healthcare Operations as a result of the Progressive Care acquisition on July 1, 2023 and approximately $0.4 million relating to the Outfitter acquisition on April 1, 2024.
Weisberg resigned from his positions as Progressive Care’s Chief Executive Officer and co-Vice-Chairman of the Board of Directors. On the same date, the Board appointed Mr. Fernandez to serve as the new Chief Executive Officer immediately.
Fernandez as Chairman of the Board of Directors and Rodney Barreto as the Vice Chairman of the Board of Directors. On November 11, 2022, Progressive Care’s Board appointed Mr. Fernandez to serve as the new Chief Executive Officer of Progressive Care.
We recorded comprehensive (gains) losses for foreign currency translation adjustments of approximately ($107,000) and $129,000 for the twelve months ended December 31, 2023 and 2022, respectively. The change was primarily attributed to exchange rate variances.
The change in the net loss was a result of the factors described above. Comprehensive Loss We recorded comprehensive losses for foreign currency translation adjustments of approximately $3,000 and $22,000 for the years ended December 31, 2024 and 2023, respectively. The change was primarily attributable to exchange rate variances.
NextPlat has announced its intention to broaden its e-commerce platform and is implementing comprehensive systems upgrades to support this initiative. e-Commerce transaction volumes at the Company’s owned and operated websites in the UK and Unites States continued to grow throughout the third quarter setting monthly performance records.
NextPlat has announced its intention to broaden its e-commerce platform and is implementing comprehensive systems upgrades to support this initiative. e-Commerce transaction volumes at the Company’s owned and operated websites in the UK and United States continued to grow throughout the year setting monthly performance records. 62 Table of Contents Healthcare Operations: Through our wholly owned subsidiaries, we currently own and operate five pharmacies, which generate most of our pharmacy revenues, which is derived from dispensing medications to our patients.
We recorded a net gain in equity of our affiliate, Progressive Care, of approximately $11.4 million for the twelve months ended December 31, 2023, as a result of a change in the accounting treatment from equity method to consolidation as of July 1, 2023.
Effective July 1, 2023, Progressive Care became a consolidated subsidiary of the Company, which resulted in a change in the accounting treatment from equity method to consolidation. Net Loss We recorded net losses of approximately $23.1 million and $12.4 million for the years ended December 31, 2024 and 2023, respectively.
Prescription revenues exceeded 80% of total revenue for all periods presented. We recognize revenue from TPA services as we satisfy the services under the TPA contract with a 340B covered entity. TPA services provided to covered entities include consulting services, accounting and reconciliation of contract pharmacy billings, and various compliance services.
Billings for most prescription orders are with third-party payers, including Medicare, Medicaid, and insurance carriers. Customer returns are nominal. Prescription revenues exceeded 80% of total revenue for all periods presented. We recognize revenue from TPA services as we satisfy the services under the TPA contract with a 340B covered entity.
See detailed discussion below. 65 Table of Contents Revenue Our revenues were as follows (in thousands): Year Ended December 31, 2023 2022 Dollars % of Revenue Dollars % of Revenue $ Change % Change Sales of products, net: Pharmacy prescription and other revenue, net of PBM fees $ 21,412 57 % $ - - % $ 21,412 100 % e-Commerce revenue 10,977 29 % 11,710 100 % (733 ) (6 )% Sub total 32,389 86 % 11,710 100 % 20,679 177 % Revenues from services: Pharmacy 340B contract revenue 5,367 14 % - - % 5,367 100 % Revenues, net $ 37,756 100 % $ 11,710 100 % 26,046 222 % Sales for the twelve months ended December 31, 2023, consisted primarily of e-Commerce sales of satellite phones, tracking devices, accessories, airtime plans, and pharmacy prescription, and 340B contract revenues.
Without those non-recurring items, loss before other income would have been approximately $6.6 million for the year ended December 31, 2024 compared to $9.3 million for the year ended December 31, 2023. 69 Table of Contents Revenue Our revenues were as follows (in thousands): Years Ended December 31, 2024 2023 Dollars % of Revenue Dollars % of Revenue $ Change % Change Sales of products, net: e-Commerce revenue $ 13,791 21 % $ 10,977 29 % $ 2,814 26 % Pharmacy prescription and other revenue, net of PBM fees 41,308 63 % 21,412 57 % 19,896 93 % Sub total 55,099 84 % 32,389 86 % 22,710 70 % Revenues from services: Pharmacy 340B contract revenue 10,384 16 % 5,367 14 % 5,017 93 % Revenues, net $ 65,483 100 % $ 37,756 100 % 27,727 73 % Revenues, net for the year ended December 31, 2024, consisted of e-Commerce sales of satellite phones, tracking devices, accessories, and airtime plans, pharmacy prescription revenue, and 340B contract revenues.
Based on the impairment test, it was determined the carrying amount of goodwill as of December 31, 2023 exceeded its fair value resulting in the Company recording an impairment charge of approximately $13.9 million for the year ended December 31, 2023, and was recorded to the Pharmacy Operations reporting segment.
The Company performed a long-lived assets impairment test as it relates to the Healthcare Operations reporting segment during the year ended December 31, 2024 and it was determined that the carrying amount of the asset group exceeded its fair value resulting in the Company recording a non-cash impairment charge to certain long-lived assets, primarily intangible assets, of approximately $12.8 million during the year ended December 31, 2024.
Changes in the estimate of such fees are recorded as an adjustment to revenue when the change becomes known. We record unearned revenue for prescriptions that are filled but not yet delivered at period-end. Billings for most prescription orders are with third-party payers, including Medicare, Medicaid, and insurance carriers. Customer returns are nominal.
Changes in the estimate of such fees are recorded as an adjustment to revenue when the change becomes known. Effective January 1, 2024, all PBMs began charging DIR fees at the time of the settlement of a pharmacy claim. We record unearned revenue for prescriptions that are filled but not yet delivered at period-end.
Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of operations.
Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of operations. 68 Table of Contents Results of Operations The results of operations for the year ended December 31, 2024, include the full year results for Progressive Care compared to the results of operations for the prior year ended December 31, 2023, which include results of operations for Progressive Care for the period from the date of acquisition, July 1, 2023, to December 31, 2023.
For the six months ended June 30, 2023, we recorded a net loss in the equity of our affiliate, Progressive Care, of approximately $1.4 million which was accounted for as an equity method investment.
Equity Method Investment Prior to the Progressive Care acquisition in July 2023, our investment in Progressive Care was accounted for by the equity method of accounting, and we recorded a net loss in the equity of Progressive Care of approximately $1.4 million, and a gain on the remeasurement of fair value of equity method investment in Progressive Care of approximately $11.4 million.
Depreciation and amortization expenses were approximately $2.1 million and $0.5 million for the twelve months ended December 31, 2023 and 2022, respectively, an increase of approximately $1.6 million or 330.6%.
Management does not expect these increases in professional fees to be recurring expenses in the foreseeable future. Depreciation and amortization expenses were approximately $2.5 million and $2.1 million for the years ended December 31, 2024 and 2023, respectively, an increase of approximately $0.4 million or 18.4%.
The terms of the transaction disclosed above, including the provisions of the securities purchase agreement and registration rights agreement, were approved by the Board of Directors and because some of the securities were offered and sold to officers and directors of the Company, such terms were separately reviewed and approved by the Audit Committee of the Board of Directors. 70 Table of Contents April 2023 Private Placement of Common Stock On April 5, 2023, the Company entered into a securities 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”).
Cash provided by financing activities of approximately $5.9 million for the year ended December 31, 2023 was primarily attributable to the proceeds from a capital raise and exercise of warrants, offset by repayment of notes payable. 74 Table of Contents April 2023 Private Placement of Common Stock On April 5, 2023, the Company entered into a securities 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”).
Authorization is obtained for these sales electronically and a corresponding authorization number is issued by the customer’s insurance provider.
Authorization is obtained for these sales electronically and a corresponding authorization number is issued by the customer’s insurance provider. Pharmacy benefit manager (“PBM”) fees, including direct and indirect remuneration (“DIR”) fees, are assessed by payers and charged at the time of the settlement of a pharmacy claim.
The increase was mainly attributable to the healthcare operations as a result of the Progressive Care acquisition as of July 1, 2023, of approximately $4.0 million and an increase in e-Commerce salaries and wages of approximately $0.1 million. The company recorded a goodwill impairment charge of approximately $13.9 million for the twelve months ended December 31, 2023 .
The increase was mainly attributable to the Healthcare Operations as a result of the Progressive Care acquisition as of July 1, 2023, of approximately $5.0 million, and approximately $0.3 million as it relates to the Outfitter acquisition on April 1, 2024, offset by a decrease in e-Commerce Operations salaries and wages of approximately $0.5 million. 71 Table of Contents The Company performed a goodwill impairment test during the year ended December 31, 2024 and it was determined that the carrying amount of goodwill exceeded its fair value resulting in the Company recording a non-cash impairment charge of approximately $0.7 million, recorded in the Healthcare Operations reporting segment.
Investing Activities Net cash flows provided by (used in) investing activities were approximately $5.2 million and ($7.7 million) for the twelve months ended December 31, 2023 and 2022, respectively, and changed by approximately $12.9 million period over period.
Cash Flow from Investing Activities Net cash flows (used in) provided by investing activities were approximately ($1.0 million) and $5.2 million for the years ended December 31, 2024 and 2023, respectively. The cash outflow in 2024 was attributable to the acquisition of Outfitter, compared to the cash inflow in 2023 due to the acquisition of Progressive Care.
Our operating expenses were as follows (in thousands): Year Ended December 31, 2023 2022 $ Change % Change Selling, general and administrative $ 9,910 $ 5,085 $ 4,825 95 % Salaries, wages and payroll taxes 6,643 2,565 4,078 159 % Goodwill impairment 13,895 - 13,895 100 % Professional fees 1,981 1,552 429 28 % Depreciation and amortization 2,110 490 1,620 331 % Operating expenses $ 34,539 $ 9,692 $ 24,847 256 % Total operating expenses for the twelve months ended December 31, 2023, were approximately $34.5 million, an increase of approximately $24.8 million on or 256.4%, from total operating expenses for the twelve months ended December 31, 2022, of approximately $9.7 million.
The pharmacy filled approximately 514,000 prescriptions for the year ended December 31, 2024, compared to approximately 489,000 prescriptions for the year ended December 31, 2023 (prescription count for the year ended December 31, 2023 includes prescriptions filled prior to the acquisition of Progressive Care that occurred on July 1, 2023). 70 Table of Contents Operating Expenses Our operating expenses were as follows (in thousands): Years Ended December 31, 2024 2023 $ Change % Change Selling, general and administrative $ 7,860 $ 9,910 $ (2,050 ) (21 )% Salaries, wages and payroll taxes 11,441 6,643 4,798 72 % Impairment loss 13,653 13,895 (242 ) (2 )% Professional fees 4,401 1,981 2,420 122 % Depreciation and amortization 2,498 2,110 388 18 % Total operating expenses $ 39,853 $ 34,539 $ 5,314 15 % Total operating expenses for the year ended December 31, 2024, were approximately $39.9 million, an increase of approximately $5.3 million or 15.4%, from total operating expenses for the year ended December 31, 2023, of approximately $34.5 million.
The increase was mainly attributable to depreciation and amortization as it relates to the healthcare operations from the Progressive Care acquisition on July 1, 2023, of approximately $1.4 million. 67 Table of Contents Total Other Expense .
The increase was attributable to a full year of depreciation and amortization as it relates to the Healthcare Operations reportable segment of approximately $0.5 million compared to six months of depreciation and amortization in the prior year related to the Healthcare Operations reportable segment from the Progressive Care acquisition on July 1, 2023. 72 Table of Contents Total Other Income Our total other income decreased by approximately $0.4 million for the year ended December 31, 2024 when compared to the same period in 2023, and was mainly due to an increase of interest received of approximately $0.1 million, a change in foreign currency rates of approximately $0.2 million, and gain on disposal of property and equipment of approximately $0.1 million, which was offset by the non-recurring write off of aged payables of approximately $0.3 million in the prior year.
Total pharmacy prescription and 304B contract revenues were approximately $26.8 million for the six months ended December 31, 2023 as a result of the Progressive Care acquisition on July 1, 2023. The pharmacy filled approximately 251,000 prescriptions for the six months ended December 31, 2023 66 Table of Contents Operating Expenses .
Total e-Commerce revenues were approximately $13.8 million and $11.0 million for the years ended December 31, 2024 and 2023, respectively, an increase of approximately $2.8 million mainly due to the Outfitter acquisition on April 1, 2024. Total pharmacy prescription and 340B contract revenues were approximately $51.7 million and $26.8 million for the years ended December 31, 2024 and 2023, respectively.
Removed
Fernandez as Chairman of the Board of Directors and Rodney Barreto as the Vice Chairman of the Board of Directors. In connection with these appointments, Alan Jay Weisberg, Progressive Care’s current Chairman and Chief Executive Officer, was appointed to serve as a Vice Chairman.
Added
We also provide patient health risk reviews and free same-day and next-day delivery.
Removed
On September 12, 2022, two of Progressive Care’s Directors, Birute Norkute and Oleg Firer, resigned as Directors. On October 7, 2022, the Progressive Care Board of Directors unanimously voted to approve the appointment of Pedro Rodriguez, MD to the Board. Dr. Rodriguez was nominated to the Progressive Care Board by NextPlat. 59 Table of Contents On November 11, 2022, Mr.
Added
ClearMetrX’s TPA services include management of wholesale accounts, patient eligibility with regard to the 340B drug program, development and review of 340B policies and procedures, and management of receivables. Business Acquisition of Progressive Care, LLC (formerly Progressive Care Inc.) On August 30, 2022, NextPlat entered into a Securities Purchase Agreement (the “SPA”) between NextPlat and Progressive Care Inc.
Removed
Healthcare Operations: Progressive Care, through its wholly owned subsidiaries, currently owns and operates five pharmacies, which generate most of its pharmacy revenues, which is derived from dispensing medications to their patients. Progressive Care also provides patient health risk reviews and free same-day delivery.
Added
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”).
Removed
Although we currently have a limited range of products available through the Alibaba storefront due to supply chain constrictions, we plan to ultimately have up to 500 products and connectivity services available on Alibaba.com. The agreement will continue on a year-to-year basis.
Added
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.
Removed
We recognize COVID-19 testing revenue when the tests are performed and results are delivered to the customer. Each test is considered an arrangement with the customer and is a separate performance obligation. Payment is generally received in advance from the customer. Billings for most prescription orders are with third-party payers, including Medicare, Medicaid, and insurance carriers. Customer returns are nominal.
Added
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, at 12:01 Eastern time, the Merger became effective and Progressive Care merged with and into Mergers Sub and thereby became a wholly owned subsidiary of NextPlat.
Removed
Progressive Care, which is our Healthcare Operations, is considered to be the reporting unit for goodwill. We perform the required annual impairment tests of goodwill at the end of each fiscal year on our reporting unit.
Added
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.
Removed
Gross profit margins increased from approximately 21.3% for the twelve months ended December 31, 2022, to 30.0%for the twelve months ended December 31, 2023. The increase in gross profit margins during 2023 compared to 2022, was primarily attributable to the healthcare operations as a result of the Progressive Care acquisition on July 1, 2023.
Added
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.
Removed
Total e-Commerce revenues were approximately $11.0 million for the twelve months ended December 31, 2023, as compared to $11.7 million for the twelve months ended December 31, 2022, a decrease of approximately $0.7 million or 6.3%.
Added
Outfitter provides consumers, commercial and government customers, with advanced satellite-based connectivity solutions from leading brands, including Iridium, Inmarsat and Globalstar.
Removed
The decrease was due to non-recurring revenue of approximately $1.2 million as a result of the war in the Ukraine in 2022 versus 2023, government imposed regulations in Germany resulting in delays selling products in the German market of approximately $1.5 million, and offset by growth in other markets of approximately $2.0 million.
Added
Additionally, we have an agreement with Tmall.com, a subsidiary of Alibaba, which allows us to list and sell our range of OPKO healthcare products.
Removed
We recorded goodwill of approximately $14.6 million as a result of the Progressive Care consolidation on July 1, 2023, net of the change in valuation allowance attributable to the business combination, and was assigned to our Pharmacy Operations segment.
Added
We will also sell our Florida Sunshine vitamins through Tmall.com. 65 Table of Contents Critical Accounting Policies and Estimates Our consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States.
Removed
On December 31, 2023, we performed our annual goodwill impairment test by reporting unit to evaluate the carrying amount of goodwill as compared to its fair value.

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