NextPlat Corp Q1 FY2025 earnings call

• E-commerce: Satellite products business steady growth with new contracts; tariff challenges with Florida Sunshine in China paused launch, but hopeful for tariff resolution to resume plans; OPKO products in China showing steady progress, including recent large shipment and initial in-store sales test; OPKO animal health products await Chinese regulatory approval expected by Q4.
• Healthcare: Made positive progress despite drug pricing/payer challenges; received substantial performance bonus from payer; continuing 340B and long term care business development; proactive steps to improve expense structure via optimizing delivery and renegotiating vendor contracts.
• Strategic: Exploring sale/merger of certain operations, new strategic partnerships/joint ventures to generate and protect shareholder value.

Healthcare Segment: Total revenue decreased; impacted by changes in 340B pharmacy service agreements, a covered entity opening an in-house pharmacy, another covered entity leaving the 340B program, and a decline in prescription volume. Gross profit margin declined mainly due to lower 340B contract revenue. E-commerce Segment: Recurring airtime revenue increased driven by IoT sales and the Outfitter acquisition, but offset by a decline in hardware sales. Gross profit was affected by the expiration of an airtime contract and temporary rate cuts. Revenue contribution details: Total revenue for Q1 was ~$14.5M vs. ~$17.5M in Q1 2024. Healthcare segment's revenue contribution was affected by the mentioned factors, while e-commerce saw growth in recurring airtime but decline in hardware.

• Tariffs: Will resume Florida Sunshine launch plans once tariff situation clearer; current tariffs delay e-commerce growth and cash neutral goal by 2026.
• Healthcare: Committed to ongoing cost reduction and operational efficiency improvements.
• E-commerce: OPKO Healthcare delays addressed, Florida Sunshine exploring alternatives like local in-country production.

• Tariffs posing challenges to Florida Sunshine launch and e-commerce growth projections.
• Healthcare facing headwinds from drug pricing, payer reimbursements, and 340B contract changes.
• NASDAQ listing requirements and compliance risks.
• Uncertainties related to ongoing litigation.

Q: What is the status of the share buyback?

A: Currently, we have not repurchased any shares under the buyback program due to blackout periods as required by law and being in possession of material non-public information.

Q: Jervis Hall, who resigned as director of NextPlat, can you comment on why and if a replacement will be found?

A: We cannot speak for Jervis on this matter, only stating it was not due to any disagreement with the company. While we will consider adding another qualified Independent Director under our bylaws, we are currently not required to add an additional director at this time.

Q: What is the company planning on doing to address the NASDAQ letter and minimum bid requirement?

A: The NASDAQ process affords an initial six-month period to address the share price, and we intend to continue working to improve the financial results of the company and potentially complete some strategic alternatives described, believing we can address the share price issue through these efforts and continued communication with investors.

Q: What is the status of ongoing lawsuit?

A: We cannot comment on any ongoing litigation.