Note 19. Subsequent Events

Change in Accounting Method - Equity Method Investment – Progressive Care, Inc.

           On July 1, 2023, each of the Company, Charles M. Fernandez, and Rodney Barreto exercised common stock purchase warrants and were issued common stock shares from  Progressive Care, the Company's equity method investee.  The Company exercised common stock warrants on a cashless basis and received 402,269 shares of Progressive Care common stock.  The Company also exercised common stock warrants on a cash basis and paid consideration in the amount of $506,000 in return for 230,000 shares of Progressive Care common stock.  Mr. Fernandez exercised common stock warrants on a cashless basis and received 211,470 shares of Progressive care common stock.  Mr. Barreto exercised common stock warrants on a cashless basis and received 130,571 shares of Progressive Care common stock. After these warrant exercises, the aggregate number of shares of Progressive Care common stock owned by the Company, Mr. Fernandez, and Mr. Barreto represent 53% of Progressive Care’s issued and outstanding common stock.

           On June 30, 2023, the Company entered into a voting agreement with Messrs. Fernandez and Barreto pursuant to which Messrs. Fernandez and Barreto agreed to vote all of their shares of Progressive Care common stock (whether owned directly or indirectly) in the same manner that the Company votes its shares of Progressive Care common stock at any annual or special shareholders meeting of the stockholders of Progressive Care, and whenever the holders of Progressive Care’s common stock act by written consent. The voting agreement has a perpetual term.    

         As a result of the common stock warrant purchases and the entry into the voting agreement, the Company concluded that there was a change in control of Progressive Care by NextPlat under the voting interest model in U.S. GAAP.   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 warrant exercises and voting agreement noted above.  Therefore, under U.S. GAAP, beginning on July 1, 2023, the Company will have a change in accounting method for its investment in Progressive from the equity method to the consolidation method. 

Note Receivable – Next Borough Capital Management, LLC

           On July 7, 2023, the Company entered into an unsecured promissory note agreement with Next Borough Capital Management, LLC (“the Borrower”), whereby the Company loaned $250,000 to the Borrower.  The note bears interest at an annual rate of 7%.  The outstanding principal balance of the note plus all accrued unpaid interest is due and payable on July 7, 2024, the Maturity Date.