SEC Form 10-Q filed by NextTrip Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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| ☒ | Smaller reporting company | |||
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NEXTTRIP, INC.
FORM 10-Q
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NEXTTRIP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| May 31, 2025 (unaudited) | February 28, 2025 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Security deposit | ||||||||
| Goodwill | ||||||||
| Equity investments | ||||||||
| Other prepaid assets | ||||||||
| Total Non-Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Deferred revenue | ||||||||
| Note payable | ||||||||
| Notes payable - related parties | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| SBA EIDL loan | ||||||||
| Line of Credit – related parties | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Stockholder’s Equity | ||||||||
| Preferred Stock, $par value; shares authorized; and shares issued and outstanding, respectively | ||||||||
| Common Stock, par value $, shares authorized; and shares issued and outstanding, respectively | ||||||||
| Additional Paid in Capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
See accompanying notes to condensed financial statements.
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NEXTTRIP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended May 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue (exclusive of depreciation and amortization, shown separately below) | ( | ) | ( | ) | ||||
| Gross profit | ||||||||
| Operating Expenses | ||||||||
| Salaries and benefits | ||||||||
| Stock based compensation | ||||||||
| General and administrative | ||||||||
| Sales and marketing | ||||||||
| Professional service fees | ||||||||
| Technology | ||||||||
| Organization costs | ||||||||
| Depreciation and amortization | ||||||||
| Other expenses | ||||||||
| Total Operating Expenses | ||||||||
| Operating Loss | ( | ) | ( | ) | ||||
| Other Income (Expenses) | ||||||||
| Other Income | ||||||||
| Loss on extinguishment of liability | ( | ) | ||||||
| Interest expense, net | ( | ) | ( | ) | ||||
| Total other income (expense) | ( | ) | ||||||
| Net loss from continuing operations before taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net loss from continuing operations before share of net income (loss) in equity method investee | $ | ( | ) | $ | ( | ) | ||
| Share of net income (loss) of equity method investee | ( | ) | ||||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Net gain from discontinued operations, net of taxes | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Preferred dividends | ( | ) | ( | ) | ||||
| Net Loss Applicable to Common Stockholders | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted loss per common share from continuing operations | $ | ) | $ | ) | ||||
| Basic and diluted loss per common share from discontinued operations | $ | $ | ||||||
| Basic and diluted loss per common share | $ | ) | $ | ) | ||||
| Basic and diluted weighted average number of common shares | ||||||||
See accompanying notes to condensed financial statements.
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NEXTTRIP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
For the Three Months Ended May 31, 2025, and May 31, 2024
| Preferred Stock | Common Stock | Additional | ||||||||||||||||||||||||||
| Shares Outstanding | Preferred Stock | Shares Outstanding | Common Stock | Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||||||||
| Balances, February 28, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Preferred Stock Dividends | - | ( | ) | |||||||||||||||||||||||||
| Preferred Shares Issued for FSA Travel, LLC acquisition | - | |||||||||||||||||||||||||||
| Issuance of common shares for Journy.tv asset acquisition | - | |||||||||||||||||||||||||||
| Issuance of common shares pursuant to reverse acquisition of Sigma | - | ( | ) | |||||||||||||||||||||||||
| Issuance of common shares for services | - | |||||||||||||||||||||||||||
| Warrants issued in connection with debt conversion | - | - | ||||||||||||||||||||||||||
| Warrants issued in connection with bridge loan financing | - | - | ||||||||||||||||||||||||||
| Issuance of securities for directors’ services | - | - | ||||||||||||||||||||||||||
| Stock Options Issued to Employees | - | - | ||||||||||||||||||||||||||
| Balances, May 31, 2025 | ( | ) | ||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Additional | ||||||||||||||||||||||||||
| Shares Outstanding | Preferred Stock | Shares Outstanding | Common Stock | Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||||||||
| Balances, February 29, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Preferred Stock Dividends | - | - | ( | ) | ||||||||||||||||||||||||
| Common Shares Issued for Conversion of Preferred Stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Stock Options Issued to Employees | - | - | ||||||||||||||||||||||||||
| Balances, May 31, 2024 | ( | ) | ||||||||||||||||||||||||||
See accompanying notes to condensed financial statements.
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NEXTTRIP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended | ||||||||
| May 31, 2025 | May 31, 2024 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net Loss – Continuing Operations | $ | ( | ) | $ | ( | ) | ||
| Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||||||||
| Noncash Expenses: | ||||||||
| Depreciation and amortization – property and equipment and intangibles | ||||||||
| Amortization of debt discount | ||||||||
| Amortization of prepaid expenses | ||||||||
| Stock-based compensation - employees | ||||||||
| Stock-based compensation - directors | ||||||||
| Loss on extinguishment of liability | ||||||||
| Change in Assets and Liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Deferred revenue | ||||||||
| Security deposit | ( | ) | ||||||
| NET CASH USED IN OPERATING ACTIVITIES FROM CONTINUING OPERATIONS | ( | ) | ( | ) | ||||
| NET CASH PROVIDED IN OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS | ||||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| INVESTING ACTIVITIES | ||||||||
| Capitalized software development costs | ( | ) | ( | ) | ||||
| FSA Travel, LLC acquisition | ( | ) | ||||||
| Journy.tv asset purchase | ( | ) | ||||||
| NET CASH USED IN INVESTING ACTIVITIES | ( | ) | ( | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| Notes Payable | ||||||||
| Advances from related parties | ||||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| NET CHANGE IN CASH FOR PERIOD | ( | ) | ( | ) | ||||
| CASH AT BEGINNING OF PERIOD | ||||||||
| CASH AT END OF PERIOD | $ | $ | ||||||
| Supplemental Disclosures: | ||||||||
| Noncash Investing and Financing Activities Disclosure: | ||||||||
| Issuance of preferred shares pursuant to FSA Travel, LLC acquisition | $ | $ | ||||||
| Issuance of common shares pursuant to Journy.tv asset purchase | $ | $ | ||||||
| Issuance of common shares for third party services | $ | $ | ||||||
| Preferred stock dividends | $ | $ | ||||||
| Disclosure of Cash Paid for: | ||||||||
| Interest | $ | $ | ||||||
| Income Taxes | $ | $ | ||||||
See accompanying notes to condensed financial statements.
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NEXTTRIP, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
May 31, 2025
NOTE 1 - Business Description and Going Concern
Sigma Additive Solutions, Inc. (“Sigma”), the legal acquiror of NextTrip Holdings, Inc., was initially incorporated as Messidor Limited in Nevada on December 23, 1985, and changed its name to Framewaves Inc. in 2001. On September 27, 2010, the name was changed to Sigma Labs, Inc. On May 17, 2022, Sigma Labs, Inc. began doing business as Sigma Additive Solutions, and on August 9, 2022, changed its name to Sigma Additive Solutions, Inc.
On March 11, 2024, Sigma filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation, as amended, with the Secretary of State of the State of Nevada, pursuant to which, effective as of 12:01 a.m. Pacific time on March 13, 2024, among other things, Sigma’s corporate name was changed from Sigma Additive Solutions, Inc. to “NextTrip, Inc.”
The Company’s corporate office is located at 3900 Paseo del Sol, Santa Fe New Mexico 87507. The consolidated financial statements include the accounts of the Company’s wholly owned subsidiaries, NextTrip Holdings Inc. incorporated on October 22, 2015, and Extraordinary Vacations USA, Inc., incorporated on June 24, 2002.
Prior to the NextPlay Exchange
Agreement, as described below, NextTrip Holdings, Inc. (“NTH”) was a wholly owned subsidiary of NextTrip Group, LLC
(“NTG”), which in turn, was a wholly owned subsidiary of NextPlay Technologies, Inc. (“NextPlay”). All of
the business operations of NTG were conducted through its subsidiaries. On January 25, 2023, NextPlay and NTG entered into an
Amended and Restated Separation Agreement, Amended and Restated Operating Agreement, and Exchange Agreement (the “NextPlay
Exchange Agreement”), whereby NextPlay transferred its interest in the travel business to NTG. Pursuant to the NextPlay
Exchange Agreement, NextPlay exchangedMembership Units of NTG for
Preferred Units of NTG, with a value of $
per unit. Prior to the exchange for Preferred Units, NTG had a payable due to NextPlay of $,
representing cash advances and payment of expenses by NextPlay on behalf of NTG, while NextPlay had obligations to provide ongoing
support to NTH. Such liability was settled by the issuance of the Preferred Units and the waiver of all of NextPlay’s ongoing
support obligations except for a $
The Company provides travel technology solutions with sales originating in the United States, with a primary emphasis on hotels, air, and all-inclusive travel packages. Our proprietary booking engine, branded as NextTrip 2.0, provides travel distributors access to a sizeable inventory.
The Company owns 50% of Next Innovation LLC, a Joint Venture (“Next Innovation”), which is dormant. No activities nor operations occurred through Next Innovation in fiscal years 2024 or 2025 for this entity, and the Company does not have control of Next Innovation and therefore no minority interest was recorded.
Reverse Acquisition
On October 12, 2023, the Company (then known as Sigma) entered into a Share Exchange Agreement (as amended, the “Exchange Agreement”) with NTH, NTG, and William Kerby (the “NextTrip Representative”). Under the terms of the Exchange Agreement, the parties agreed that NTG would sell and transfer to the Company all of the issued and outstanding shares of NTH in exchange for restricted shares of Company common stock (the “Closing Shares”), issuable at closing, and the right to receive up to an additional restricted shares of Company common stock upon satisfaction of certain milestones set forth in the Exchange Agreement (the “Contingent Shares,” and together with the Closing Shares, the “Restricted Shares”), which Restricted Shares are issuable to the members of NTG, on a pro rata basis, under the terms of the Exchange Agreement, subject to certain closing conditions (the “NextTrip Acquisition”). Upon the closing of the NextTrip Acquisition on December 29, 2023, NTH became a wholly owned subsidiary of the Company.
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The Contingent Shares, together with the Closing Shares, will not exceed shares of Company common stock, or approximately % of the issued and outstanding shares of Company common stock immediately prior to the closing. At closing, it was determined that the NextTrip Acquisition would likely result in a change of control, with the members of NTG receiving an aggregate number of shares that exceeds the number of shares held by the legacy shareholders of Sigma, which change in control occurred upon the issuance of certain of the Contingent Shares on March 26, 2025. As a result, the NextTrip Acquisition is accounted for as a reverse acquisition of NTH by the Company, whereby the Company is treated as the legal acquirer and NTH is treated as the accounting acquirer. As a result, the historical financial information for the periods prior to closing of the NextTrip Acquisition presented is that of NTH.
In accordance with ASC 805-40-45-1, the consolidated financial statements prepared following a reverse acquisition are issued under the name of the legal parent (NextTrip, Inc., f/k/a Sigma Additive Solutions, Inc.) but described in the notes to the financial statements as a continuation of the financial statements of the legal subsidiary (NTH), with one adjustment, which is to retroactively adjust the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree. That adjustment is required to reflect the capital of the legal parent.
Under ASC 805-40-45-2, the consolidated financial statements represent the continuation of the legal subsidiary except for the capital structure, as follows:
| (a) | The assets and liabilities of the legal subsidiary recognized and measured at their pre-combination carrying amounts; | |
| (b) | The assets and liabilities of the legal parent recognized and measured in accordance with the guidance in this topic applicable to business combinations (ASC 805); | |
| (c) | The retained earnings and other equity balances of the legal subsidiary before the business combination; | |
| (d) | The amount required to be recognized as issued equity interests in the consolidated financial statements determined by adding the issued equity interest of the legal subsidiary outstanding immediately before the business combination to the fair value of the legal parent determined in accordance with the guidance in ASC 805 applicable to business combinations. However, the equity structure reflects the equity structure of the legal parent, including the equity interests the legal parent issued to affect the combination. Accordingly, the equity structure of the legal subsidiary is restated using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent issued in the reverse acquisition. |
The assets and liabilities of Sigma were recognized at fair value pursuant to ASC 805.
Going Concern - As of May 31, 2025,
and February 28, 2025, the Company had an accumulated deficit of $
In light of the foregoing, there is substantial doubt about the Company’s ability to continue as a going concern for 12 months from the date of the filing of this Report.
NOTE 2 – Summary of Significant Accounting Policies
Basis of Presentation - The accompanying financial statements have been prepared by the Company in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America. The financial statements have been prepared on a consolidated basis with those of the Company’s wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at May 31, 2025 and 2024 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The Company suggests these condensed financial statements be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2025. The results of operations for the period ended May 31, 2025 are not necessarily indicative of the operating results for the full year.
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Reclassification
Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on the net earnings (loss) or financial position.
Promissory Note Receivable
NextPlay is in involuntary bankruptcy proceedings
and is in default under the terms of its promissory note for non-payment. As a result, as of February 28, 2025 the Company established
an allowance for credit losses for the full amount of the note of $
Investments in Equity Method Investees
The Company holds investments in certain entities that are accounted for under the equity method of accounting, as well as investments that are accounted for under the fair value method pursuant to ASC 321, “Investments - Equity Securities.” Under the equity method, investments in entities in which the Company has significant influence, but not control, are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the investees’ earnings or losses and other comprehensive income.
The Company determines the existence of significant influence based on various factors, including representation on the investees’ board of directors, participation in policy-making processes, and material intercompany transactions.
The Company’s equity method investments are evaluated periodically for impairment by assessing whether events or changes in circumstances indicate that the carrying value of the investment may not be recoverable. When such indicators exist, the Company performs an impairment test and recognizes an impairment loss to the extent that the carrying amount of the investment exceeds its fair value.
Distributions received from equity method investees that exceed cumulative earnings recognized by the Company are considered a return of investment and are recorded as a reduction in the carrying amount of the investment.
Adjustments resulting from changes in the Company’s ownership interest in equity method investees that do not result in a loss of significant influence are accounted for prospectively.
Basis Difference
In accordance with ASC 323, “Investments - Equity Method and Joint Ventures,” the Company records a basis difference when the carrying value of its equity method investment differs from its share of the investee’s fair value of net assets at the acquisition date. This basis difference is allocated to the investee’s identifiable assets and liabilities based on their fair values. The amortization of any basis difference related to depreciable assets, such as property, plant, and equipment, is recognized in the Company’s share of the investee’s earnings or losses. Any basis difference related to non-depreciable assets, including goodwill, is generally not amortized, but is subject to impairment testing as necessary.
The Company assesses the impact of any basis differences on its earnings and the carrying value of its equity method investments. If a basis difference is determined to exist, the appropriate adjustments are made to reflect the amortization of such differences in the consolidated financial statements.
Investments in Equity Securities without Readily Determinable Fair Value
In accordance with ASC 321-10-35-2, the Company holds certain investments in equity securities in which the Company does not have significant influence or control, and for which fair value is not readily determinable. These investments are primarily accounted for at cost, less any impairment. The carrying amount is periodically evaluated for impairment, and if necessary, an impairment loss is recognized in the statement of operations. These investments are not adjusted for unrealized gains or losses unless an impairment is identified.
Equity in Earnings of Equity Method Investees
The Company’s share of earnings or losses from equity method investees is recognized in the consolidated statement of operations within “Equity in share of loss of equity method investees,” net of any related income taxes.
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| May 31, | ||||||||
| 2025 | 2024 | |||||||
| Warrants | ||||||||
| Stock Options | ||||||||
| Preferred Stock | ||||||||
| Total Underlying Common Shares | ||||||||
| Three Months Ended May 31, | ||||||||
| 2025 | 2024 | |||||||
| Loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Preferred dividends | ( | ) | ( | ) | ||||
| Loss from continuing operations applicable to common stockholders | ( | ) | ( | ) | ||||
| Gain from discontinued operations applicable to common stockholders | ||||||||
| Net loss applicable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding used in loss per share during the period (denominator) | ||||||||
Dilutive
loss per share was not presented, as the Company’s outstanding common and preferred warrants, stock options and preferred stock
common equivalent shares for the periods presented would have had an anti-dilutive effect. At May 31, 2025, the Company had outstanding
warrants to purchase
Accounting Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated by management. Significant accounting estimates that may materially change in the near future are impairment of long-lived assets, values of stock compensation awards and stock equivalents granted as offering costs, and allowance for bad debts.
Revenue Recognition – The Company’s revenue is derived primarily from sales of our software and related hardware suite under perpetual licenses and from providing engineering services under contracts. The Company recognizes revenue in accordance with ASC Topic No. 606. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that superseded nearly all existing revenue recognition guidance under prior GAAP and replaced it with a principles-based approach for determining revenue recognition. The core principle of the standard is the recognition of revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In general, we determine revenue recognition by: (1) identifying the contract, or contracts, with our customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.
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The Company recognizes revenue when the customer has purchased the product, the occurrence of the earlier of date of travel and the date of cancellation has expired, as satisfaction of the performance obligation, the sales price is fixed or determinable and collectability is reasonably assured. Revenue for customer travel packages purchased directly from the Company are recorded gross (the amount paid to the Company by the customer is shown as revenue and the cost of providing the respective travel package is recorded to cost of revenues).
The Company generates revenues from sales directly to customers as well as through other distribution channels of tours and activities at destinations throughout the world.
The Company controls the specified travel product before it is transferred to the customer and is therefore a principal, based on but not limited to, the following:
| ● | The Company is primarily responsible for fulfilling the promise to provide such travel product. | |
| ● | The Company has inventory risk before the specified travel product has been transferred to a customer or after transfer of control to a customer. | |
| ● | The Company has discretion in establishing the price for the specified travel product. |
Payments for tours or activities received in advance of services being rendered are recorded as deferred revenue and recognized as revenue at the earlier of the date of travel or the last date of cancellation (i.e., the customer’s refund privileges lapse).
Segment Reporting - We manage the Company as one reportable segment, Travel Products and Services. Travel bookings are the source of our revenues and include the sale of travel products such as airline tickets and hotel rooms as well as travel services such as travel insurance and ground activities. The segment information aligns with how the Company’s Chief Operating Decision Maker (“CODM”) reviews and manages our business. The Company’s CODM is the Company’s Chief Executive Officer.
Financial information and annual operating plans and forecasts are prepared and are reviewed by the CODM at a consolidated level. The CODM assesses performance for the Travel Products and Services segment and decides how to allocate resources based on revenue and net income that is reported on the Consolidated Statements of Operations. The Company’s objective in making resource allocation decisions is to optimize the financial results. The accounting policies of our Travel Products and Services segment are the same as those described in the summary of significant accounting policies herein.
For our single reportable segment-level financial information, total assets, and significant non-cash transactions, see the Financial Statements.
NOTE 3 - Investment in Equity Securities
Investment in Blue Fysh Holdings Inc.
On February 24, 2025, the Company entered into a Share Exchange Agreement with Blue Fysh Holdings Inc. (“Blue Fysh”), under which the Company acquired a % ownership interest in Blue Fysh. As part of the transaction, the Company issued shares of Series N Preferred at an issuance price of $ per share, totaling $, in exchange for restricted shares of Blue Fysh common stock. The transaction closed on February 28, 2025.
The Company’s investment in Blue Fysh is accounted for under the cost method, as the Company does not have significant influence over Blue Fysh. No board appointments are contemplated as part of this transaction; however, the Company has the right to appoint a representative to the Blue Fysh Advisory Committee, which will allow the Company to receive financial updates as needed and to be informed of financial events that could significantly impact the Company’s ownership position.
Since the Company’s ownership interest does not meet the criteria for significant influence pursuant to ASC 323, this investment is classified as an equity security without a readily determinable fair value and is initially recorded at cost. The Company will assess the investment for impairment in future periods and recognize any impairment losses as necessary.
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Note 4 – Acquisition of FSA Travel, LLC
On February 6, 2025, the Company acquired a
On April 9, 2025, the Company exercised its
option to purchase the remaining
The contingent consideration issued as purchase consideration provides for additional distributions to the FSA Unitholders, the amount of which is dependent on the acquired business’ achievement of certain milestones. The Company determined the fair value of the contingent consideration as of the acquisition date (April 9, 2025) based on the probability and timing of achieving the respective milestones.
Upon completion of the acquisition of the
remaining
The Company has completed a preliminary analysis to assign fair values to all assets acquired and liabilities assumed. The table below sets forth the consideration paid and the fair value of the assets acquired and liabilities assumed for the acquisition:
| Consideration paid | ||||
| Cash | $ | |||
| Series O Preferred stock | ||||
| Earnout Payment | ||||
| Fair value of Initial Purchase | ||||
| Total consideration | $ | |||
| Assets acquired and liabilities assumed | ||||
| Cash and cash equivalents | $ | |||
| Accounts receivable | ||||
| Intangibles | ||||
| Goodwill | ||||
| Total assets | $ | |||
| Accounts payable | ||||
| Due to FSA Unitholders | ||||
| SBA Loan | ||||
| Total liabilities | $ | |||
| Total net assets | $ |
The fair value of the working capital items, including accounts receivable, other receivables, trade payables and deferred revenue, approximates their respective carrying values at the date in which control was obtained. Effective January 1, 2021, the Company has adopted ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which created an exception to the recognition and measurement principles of ASC 805, Business Combinations, for the Company’s contract assets and liabilities, including deferred revenue, essentially resulting in the carryover of the historical amounts determined in accordance with ASC 606, Revenue from Contracts with Customers, rather than fair value.
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The fair value of the acquired tradename and acquired technology was determined using the relief from royalty method, which utilized projected financial information. The goodwill recognized in the acquisition primarily represents synergies with the existing operations of the Company, and the value of yet-to-be-acquired/developed customers, technology, assembled workforce, and any other assets.
The Company is currently finalizing its valuation of the acquired assets and liabilities and has recorded these preliminary amounts as of the acquisition date. The final purchase price allocation may result in adjustments to the amounts presented.
NOTE 5 – Journy.tv Asset Acquisition
On April 1, 2025, the Company entered into an asset purchase agreement (the “Journy.tv Purchase Agreement”) with Ovation LLC (“Ovation”), pursuant to which the Company purchased assets, including without limitation trademarks, domains, apps and certain agreements, and assumed certain liabilities related to Ovation’s Journy.tv business (the “Journy.tv Acquisition”). The Journy.tv Acquisition closed on April 1, 2025.
Pursuant to the Journy.tv Purchase
Agreement, as consideration for the Journy.tv Acquisition, the Company paid Ovation $
In connection with the Journy.tv
Acquisition, on April 1, 2025, the Company and Ovation also entered into a License Agreement (the “License Agreement”),
pursuant to which Ovation granted the Company the non-exclusive right, throughout the territories and for the term set forth
therein, to exhibit, promote, market, advertise, publicize and/or otherwise exploit the programs listed in the License Agreement in
the media of (i) FAST via the Journy.tv Channel and (ii) Video On Demand via the Journy.tv Channel. Pursuant to the License
Agreement, Ovation shall not license any unaffiliated third party the right to exhibit certain of the programs subject to the
License Agreement and shall not use certain of the programs subject to the License Agreement on its owned or operating streaming
platforms (subject to certain exceptions). As consideration for the rights granted under the License Agreement, the Company agreed
to pay Ovation an aggregate non-refundable license fee of $
The transaction was accounted for as an asset acquisition because while inputs were acquired (in the form of trademarks, distribution agreements, content licenses, and service agreements), there is not a continuation of revenues before and after the transaction. That is, due to the significant rebranding and redevelopment of the inputs acquired, the Journy.tv assets are not producing revenue post-closing of the transaction. Additionally, an organized workforce with the necessary skills and experience to create outputs was not included in the transaction. As such, the transaction does not meet the definition of a business and is considered an asset acquisition.
On the acquisition date, the fair value of the
intangible assets acquired was $
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NOTE 6 – Intangible Assets
Intangible assets as of May 31, 2025, and February 28, 2025 consisted of the following:
| May 31, 2025 | February 28, 2025 | |||||||
| Software Development | $ | $ | ||||||
| Software Licenses | ||||||||
| Trademark | ||||||||
| FSA Travel, LLC Tradename | ||||||||
| Journy.tv – Trade Name | ||||||||
| Journy.tv Distribution Agreements | ||||||||
| Total | ||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net of amortization | $ | $ | ||||||
Amortization expense for the three months ended
May 31, 2025, and May 31, 2024 was $
During the three months ended May 31, 2025 and 2024, the Company recorded no impairment losses associated with the carrying value exceeding its recoverable amount.
The estimated aggregate amortization expense for each of the succeeding years ending February 28 is as follows:
| 2026 (Remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| $ |
NOTE 7 – Goodwill
Reverse Acquisition of Sigma Additive Solutions, Inc.
As discussed in Note 1 – Business Description and Going Concern, the legal acquisition of NTH by the Company on December 29, 2023 was determined to be a reverse acquisition, with NTH as the accounting acquirer, using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method of accounting, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of consummation of the transaction.
Pursuant to ASC 350-20, the Company assigned
its goodwill to reporting units and is required to test each reporting unit’s goodwill for impairment at least on an annual
basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a
reporting unit below its carrying amount. The goodwill resulting from the reverse acquisition is primarily attributable to
NTH’s objective to obtain access to public markets to provide funding wherewithal to fund business growth. NTH’s benefit
in paying for these synergies in the reverse acquisition transaction was to avoid the time and expense of organizing and executing
an Initial Public Offering transaction. In the reverse acquisition, $
Acquisition of FSA Travel, LLC
As of May 31, 2025, preliminary goodwill of $
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NOTE 8 – Notes Payable
On May 24, 2024, the Company sold a short-term
promissory note to a private investor in the aggregate principal amount of $
On June 26, 2024, the Company sold a short-term
promissory note to a private investor in the aggregate principal amount of $
On October 18, 2024, the Company sold a
short-term promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of $
On November 8, 2024, the Company sold a
short-term promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of $
On December 31, 2024, the Company sold a short-term
promissory note to a private investor in the aggregate principal amount of $
On February 4, 2025, the Company sold a short-term
promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of $
On April 1, 2025, the Company entered into a securities
purchase agreement (the “Note & Warrant SPA”) with Alumni Capital LP (“Alumni Capital”) for the sale of a
short-term promissory note (the “Alumni Note”) and warrants (“Warrants”) to Alumni Capital for total consideration
of $
The Alumni Note is in the principal amount
of $
As of May 31, 2025, the balance on the
Alumni Note, net of the unamortized debt discount, was $
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NOTE 9 – Long-Term Debt
As part of the acquisition of FSA on April
9, 2025, the Company assumed an SBA loan originally issued to FSA on December 4, 2020, with an initial principal amount of $
In accordance with ASC 805 – Business Combinations,
the assumed loan was recognized at its acquisition-date fair value of $
The loan is measured at amortized cost subsequent to the acquisition date, and interest expense is recognized using the effective interest method based on the fair value of the liability at the acquisition date. The following table summarizes the loan terms as of the acquisition date:
| Description | Amount | |||
| Principal amount | $ | |||
| Fair value at acquisition date | $ | |||
| Remaining term | ||||
| Monthly payment | $ | |||
| Effective interest rate | % | |||
As of May 31, 2025, the balance of the loan was
$
NOTE 10 - Related Party Transactions
On April 9, 2025, NTH and the Donald P. Monaco
Insurance Trust (the “Trust”) entered into two promissory notes (together, the “Trust Notes”) under the Company’s
$
On May 6, 2025, the Company
entered into a Line of Credit Agreement (the “MIP Line of Credit”) with Monaco Investment Partners II, LP (“MIP”)
providing the Company with a $
The total amounts due to related parties at May
31, 2025 and February 28, 2025 totaled $
NOTE 11 - Stockholders’ Equity
Common Stock
The Company has shares of common stock authorized for issuance pursuant to its amended and restated articles of incorporation, as amended (“Charter”). At May 31, 2025 and February 28, 2025, there were and shares of common stock, par value $ per share, issued and outstanding, respectively. All shares of common stock have equal voting rights, are fully-paid and non-assessable, and are entitled to one vote per share.
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In the first quarter of 2024, the Company issued shares of common stock upon conversion of shares of Series G Convertible Preferred Stock, shares of common stock upon conversion of shares of Series H Preferred, and shares of common stock upon conversion of shares of Series I Preferred.
In the first quarter of 2025, the Company issued shares of common stock in connection with various investor relations consulting contracts, shares of common stock to the holders of shares of the Company’s Series L and Series M Preferred stock as dividends, shares of common stock to Ovation as partial consideration pursuant to the April 1, 2025 Journy.tv Asset Purchase Agreement; shares of common stock to ITA as a finder’s fee related to the FSA acquisition; shares of common stock pursuant to a consulting contract related to the development and launch of a dedicated beauty and wellness FAST channel; and shares of common stock to the members of NTG pursuant to the Exchange Agreement, constituting Contingent Shares issuable to the members of NTG upon the achievement of all business milestones.
Preferred Stock
Under our Charter, our board of directors has the authority, without further action by stockholders, to designate one or more series of preferred stock and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights granted to or imposed upon the preferred stock, including dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation preference and sinking fund terms, any or all of which may be preferential to or greater than the rights of the common stock.
Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control and may adversely affect the market price of the common stock and the voting and other rights of the holders of common stock.
The Company is authorized to issue shares of preferred stock, par value $ per share. An aggregate of and shares of preferred stock were issued and outstanding at May 31, 2025 and February 28, 2025, respectively, as further discussed below.
Series E Convertible Preferred Stock
Under the Certificate of Designations of the Series
E Preferred Stock, shares of the Company’s Series E Preferred have an initial stated value of $
per share (the “Series E Stated Value”). Dividends at the initial rate of
At May 31, 2025, shares of Series E Preferred were outstanding, which if converted as of May 31, 2025, including the make-whole dividends, would have resulted in the issuance of shares of common stock.
Series F Convertible Preferred Stock
On January 4, 2024, the Company filed a Certificate of Designation of Series F Convertible Preferred Stock (the “Series F Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series F Preferred. The Series F Preferred was designated by the Company in connection with the acquisition of NTH, and, in the event that the Company did not have sufficient shares of common stock available to fulfill its obligations pursuant to the Exchange Agreement governing the terms of the acquisition, shares of Series F Preferred would have been issued to the previous equity holders of NTH in lieu of shares of Company common stock.
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The terms and conditions set forth in the Series F Certificate of Designation are summarized below:
Ranking. The Series F Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series F Preferred will be entitled to dividends, on an as-converted basis, equal to dividends actually paid, if any, on shares of Company common stock.
Voting. Except as provided by the Company’s Charter, or as otherwise required by the Nevada Revised Statutes, holders of Series F Preferred are entitled to vote with the holders of outstanding shares of Company common stock, voting together as a single class, with respect to all matters presented to the Company’s stockholders for their action or consideration. In any such vote, each holder is entitled to a number of votes equal to the number of shares of common stock into which the Series F Preferred held by such holder is convertible. The Company may not, without the consent of holders of a majority of the outstanding shares of Series F Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series F Preferred or alter or amend the Series F Certificate of Designation, (ii) amend its Charter or other charter documents in any manner that adversely effects any rights of the holders of the Series F Preferred, or (c) enter into any agreement with respect to the foregoing.
Conversion. On such date that the Company amends its Charter to increase the number of shares of common stock authorized for issuance thereunder, to at least the extent required to convert all of the outstanding Series F Preferred, each outstanding share of Series F Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series F Conversion Ratio”).
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary (each, a “Liquidation”), holders of Series F Preferred will be entitled to participate, on an as-converted-to-common stock basis calculate based on the Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
At May 31, 2025, shares of the Series F Preferred were outstanding.
Series G Convertible Preferred Stock
On January 26, 2024, the Company filed a Certificate of Designation of Series G Convertible Preferred Stock (the “Series G Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series G Preferred, par value $ per share.
The terms and conditions set forth in the Series G Certificate of Designation are summarized below:
Ranking. The Series G Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series G Preferred will be entitled to dividends, on an as-converted basis, equal to dividends actually paid, if any, on shares of Company common stock.
Voting. Except as provided by the Company’s Charter or as otherwise required by the Nevada Revised Statutes, holders of Series G Preferred are entitled to vote with the holders of outstanding shares of Company common stock, voting together as a single class, with respect to all matters presented to the Company’s stockholders for their action or consideration. In any such vote, each holder is entitled to a number of votes equal to the number of shares of common stock into which the Series G Preferred held by such holder is convertible. The Company may not, without the consent of holders of a majority of the outstanding shares of Series G Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series G Preferred or alter or amend the Series G Certificate of Designation, (ii) amend its Charter or other charter documents in any manner that adversely effects any rights of the holders of the Series G Preferred, or (c) enter into any agreement with respect to the foregoing.
Conversion. On such date that the Company amends its Charter to increase the number of shares of common stock authorized for issuance thereunder, to at least the extent required to convert all of the outstanding Series G Preferred, each outstanding share of Series G Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series G Conversion Ratio”).
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series G Preferred will be entitled to participate, on an as-converted-to-common stock basis calculate based on the Series G Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
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Redemption Right.
The Company did not exercise its option to repurchase 50% of the Series G Preferred, and all such shares were converted into shares of Company common stock on March 15, 2024. At May 31, 2025, shares of Series G Preferred were outstanding.
Series H Convertible Preferred Stock
On January 26, 2024, the Company filed a Certificate of Designation of Series H Convertible Preferred Stock (the “Series H Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series H Preferred, par value $ per share.
The terms and conditions set forth in the Series H Certificate of Designation are summarized below:
Ranking. The Series H Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series H Preferred will be entitled to dividends, on an as-converted basis, equal to dividends actually paid, if any, on shares of Company common stock.
Voting. Except as provided by the Company’s Charter or as otherwise required by the Nevada Revised Statutes, holders of Series H Preferred are entitled to vote with the holders of outstanding shares of Company common stock, voting together as a single class, with respect to all matters presented to the Company’s stockholders for their action or consideration. In any such vote, each holder is entitled to a number of votes equal to the number of shares of common stock into which the Series H Preferred held by such holder is convertible. The Company may not, without the consent of holders of a majority of the outstanding shares of Series H Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series H Preferred or alter or amend the Series H Certificate of Designation, (ii) amend its Charter or other charter documents in any manner that adversely effects any rights of the holders of the Series H Preferred, or (c) enter into any agreement with respect to the foregoing.
Conversion. On such date that the Company amends its Charter to increase the number of shares of common stock authorized for issuance thereunder, to at least the extent required to convert all of the outstanding Series H Preferred, each outstanding share of Series H Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series H Conversion Ratio”).
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series H Preferred will be entitled to participate, on an as-converted-to-common stock basis calculate based on the Series H Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
At May 31, 2025, shares of Series H Preferred were outstanding, which if converted as of May 31, 2025, would have resulted in the issuance of shares of common stock.
Series I Convertible Preferred Stock
On February 22, 2024, the Company filed a Certificate of Designation of Series I Convertible Preferred Stock (the “Initial Series I Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series I Preferred, par value $ per share. On February 25, 2025, the Company filed an amendment to the Initial Series I Certificate of Designation (the “Amendment to Series I Certificate of Designation” and together with the Initial Series I Certificate of Designation, the “Series I Certificate of Designation”) with the Secretary of State of the State of Nevada, to increase the number of shares of Series I Preferred to shares.
The terms and conditions set forth in the Series I Certificate of Designation are summarized below:
Ranking. The Series I Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series I Preferred will be entitled to dividends, on an as-converted basis, equal to dividends actually paid, if any, on shares of Company common stock.
Voting. Except as provided by the Charter, or as otherwise required by the Nevada Revised Statutes, holders of Series I Preferred are entitled to vote with the holders of outstanding shares of Company common stock, voting together as a single class, with respect to all matters presented to the Company’s stockholders for their action or consideration. In any such vote, each holder is entitled to a number of votes equal to the number of shares of common stock into which the Series I Preferred held by such holder is convertible. The Company may not, without the consent of holders of a majority of the outstanding shares of Series I Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series I Preferred or alter or amend the Series I Certificate of Designation, (ii) amend its Charter or other charter documents in any manner that adversely effects any rights of the holders of the Series I Preferred, or (c) enter into any agreement with respect to the foregoing.
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Conversion. On such date that the Company amends its Charter to increase the number of shares of common stock authorized for issuance thereunder, to at least the extent required to convert all of the outstanding shares of Series I Preferred, each outstanding share of Series I Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series I Conversion Ratio”).
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series I Preferred will be entitled to participate, on an as-converted-to-common stock basis calculated based on the Series I Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
On August 15, 2024, the Company entered into a
securities purchase agreement with an investor for the sale of shares of Series I Preferred, at $ per share, resulting in gross
proceeds to the Company of $
On August 31, 2024, the Company entered into a
securities purchase agreement with an investor for the sale of shares of Series I Preferred at $ per share, resulting in gross
proceeds to the Company of $
On October 1, 2024, the Company entered into
a securities purchase agreement with an investor for the sale of
shares of Series I Preferred at $
per share, resulting in gross proceeds to the Company of $
On February 24, 2025, the Company entered into
a securities purchase agreement (the “Series I Purchase Agreement”) with certain accredited investors,
pursuant to which the Company issued and sold an aggregate of restricted shares of Series I Preferred to the purchasers
at a purchase price of $ per share (the “Series I Offering”), resulting in aggregate gross proceeds to the Company of
$
On February 24 2025, the Company entered into
a debt conversion agreement with Greg Miller, an independent contractor of the Company, whereby Mr. Miller and the Company agreed to
convert $
On February 25, 2025, the Company issued shares of Series I Preferred at $ per share to the Company’s IT contractor as payment for outstanding invoices.
The Series I Preferred shall not be convertible and the Miller Warrant shall not be exercisable into shares of common stock until such date that the Company obtains stockholder approval to remove the Exchange Cap (as described below).
At May 31, 2025, shares of Series I Preferred were outstanding, which if converted as of May 31, 2025, would have resulted in the issuance of shares of common stock.
Series J Nonvoting Convertible Preferred Stock
On January 3, 2025, the Company filed a Certificate of Designation of Series J Nonvoting Convertible Preferred Stock (the “Series J Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series J Preferred, par value $ per share.
The terms and conditions set forth in the Series J Certificate of Designation are summarized below:
Ranking. The Series J Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series J Preferred will be entitled to dividends, on an as-converted basis, equal to dividends actually paid, if any, on shares of Company common stock.
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Voting. Except as provided by the Charter, or as otherwise required by the Nevada Revised Statutes, holders of Series J Preferred are not entitled to voting rights. However, the Company may not, without the consent of holders of a majority of the outstanding shares of Series J Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series J Preferred or alter or amend the Series J Certificate of Designation, (ii) amend its Charter or other charter documents in any manner that adversely effects any rights of the holders of the Series J Preferred, or (c) enter into any agreement with respect to the foregoing.
Conversion. On the third business day after the date that the Company’s stockholders approve the conversion of Series J Preferred into shares of Common Stock in accordance with the listing rules of Nasdaq, each outstanding share of Series J Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series J Conversion Ratio”), subject to beneficial ownership limitations.
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series J Preferred will be entitled to participate, on an as-converted-to-common stock basis calculated based on the Series J Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
On December 31, 2024, the Company entered into
a securities purchase agreement with certain accredited investors, pursuant to which the Company issued and sold an aggregate of
restricted shares of Series J Preferred, at a purchase price of $ per share, resulting in gross proceeds to the Company of $
The Series J Preferred shall be convertible into shares of the Company’s common stock on such date that the Company obtains stockholder approval to remove the Exchange Cap.
At May 31, 2025, shares of Series J Preferred were outstanding, which if converted as of May 31, 2025, would have resulted in the issuance of shares of common stock.
Series K Nonvoting Convertible Preferred Stock
On January 3, 2025, the Company filed a Certificate of Designation of Series K Nonvoting Convertible Preferred Stock (the “Series K Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series K Preferred, par value $ per share.
The terms and conditions set forth in the Series K Certificate of Designation are summarized below:
Ranking. The Series K Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series K Preferred will be entitled to dividends, on an as-converted basis, equal to dividends actually paid, if any, on shares of Company common stock.
Voting. Except as provided by the Charter, or as otherwise required by the Nevada Revised Statutes, holders of Series K Preferred are not entitled to voting rights. However, the Company may not, without the consent of holders of a majority of the outstanding shares of Series K Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series K Preferred or alter or amend the Series K Certificate of Designation, (ii) amend its Charter or other charter documents in any manner that adversely effects any rights of the holders of the Series K Preferred, or (c) enter into any agreement with respect to the foregoing.
Conversion. On the third business day after the date that the Company’s stockholders approve the conversion of Series K Preferred into shares of Common Stock in accordance with the listing rules of Nasdaq, each outstanding share of Series K Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series K Conversion Ratio”), subject to beneficial ownership limitations.
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series K Preferred will be entitled to participate, on an as-converted-to-common stock basis calculated based on the Series K Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
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On December 31, 2024, the Company issued an aggregate
of shares of Series K Preferred to a series of investors at a price of $ per share as prepaid guaranteed interest in connection
with the sale of an aggregate of $
The Series K Preferred shall be convertible into shares of the Company’s common stock on such date that the Company obtains stockholder approval to remove the Exchange Cap.
At May 31, 2025, shares of the Series K Preferred were outstanding, which if converted as of May 31, 2025, would have resulted in the issuance of shares of common stock.
Series L Nonvoting Convertible Preferred Stock
On January 3, 2025, the Company filed a Certificate of Designation of Series L Nonvoting Convertible Preferred Stock (the “Initial Series L Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series L Preferred, par value $ per share. On February 25, 2025, the Company filed an amendment to the Initial Series L Certificate of Designation (the “Series L Preferred Amendment,” and together with the Initial Series L Certificate of Designation, the “Series L Certificate of Designation”) with the Secretary of State of the State of Nevada, to increase the number of shares of the Company’s preferred stock designated as Series L Preferred to shares.
The terms and conditions set forth in the Series L Certificate of Designation are summarized below:
Ranking. The Series L Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series L Preferred
will be entitled to dividends, if, as and when declared by the Board out of funds at the time legally available therefor, dividends in
the amount of
Voting. Except as provided by the Charter, or as otherwise required by the Nevada Revised Statutes, holders of Series L Preferred are not entitled to voting rights However, the Company may not, without the consent of holders of a majority of the outstanding shares of Series L Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series L Preferred or alter or amend the Series L Certificate of Designation, (ii) amend its Charter or other charter documents in any manner that adversely effects any rights of the holders of the Series L Preferred, or (c) enter into any agreement with respect to the foregoing.
Conversion. On the third business day after the date that the Company’s stockholders approve the conversion of Series L Preferred into shares of Common Stock in accordance with the listing rules of Nasdaq, each outstanding share of Series L Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series L Conversion Ratio”), subject to beneficial ownership limitations.
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series L Preferred will be entitled to participate, on an as-converted-to-common stock basis calculated based on the Series L Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
On December 31, 2024, the Company entered into
debt conversion agreements with its chief executive officer, William Kerby, and chairman of the board, Donald P. Monaco (the “Related
Parties”), whereby the Related Parties and the Company agreed to convert $
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On February 24, 2025, the Company entered into
debt conversion agreements with its chief executive officer, William Kerby, and chairman of the board, Donald P. Monaco, whereby the Related
Parties and the Company agreed to convert $
The Series L Preferred shall be convertible into shares of the Company’s common stock on such date that the Company obtains stockholder approval to remove the Exchange Cap, subject to beneficial ownership limitations.
At May 31, 2025, shares of the Series L Preferred were outstanding, which if converted as of May 31, 2025, would have resulted in the issuance of shares of common stock.
Series M Nonvoting Convertible Preferred Stock
On January 3, 2025, the Company filed a Certificate of Designation of Series M Nonvoting Convertible Preferred Stock (the “Series M Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series M Preferred, par value $ per share.
The terms and conditions set forth in the Series M Certificate of Designation are summarized below:
Ranking. The Series M Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series M Preferred
will be entitled to dividends, if, as and when declared by the Board out of funds at the time legally available therefor, dividends in
the amount of
Voting. Except as provided by the Charter, or as otherwise required by the Nevada Revised Statutes, holders of Series M Preferred are not entitled to voting rights. However, the Company may not, without the consent of holders of a majority of the outstanding shares of Series M Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series M Preferred or alter or amend the Series M Certificate of Designation, (ii) amend its Charter or other charter documents in any manner that adversely effects any rights of the holders of the Series M Preferred, or (c) enter into any agreement with respect to the foregoing.
Conversion. On the third business day after the date that the Company’s stockholders approve the conversion of Series M Preferred into shares of Common Stock in accordance with the listing rules of Nasdaq, each outstanding share of Series M Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series M Conversion Ratio”), subject to beneficial ownership limitations.
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series M Preferred will be entitled to participate, on an as-converted-to-common stock basis calculated based on the Series M Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
On December 31, 2024, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company may issue and sell up to $ of restricted shares of Series M Preferred, at a purchase price of $ per share.
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In addition, as part of the Series M Preferred
offering, on December 31, 2024, the Company entered into a debt conversion agreement with an existing lender whereby the lender and the
Company agreed to convert $
The Series M Preferred shall be convertible into shares of the Company’s common stock on such date that the Company obtains stockholder approval to remove the Exchange Cap.
On December 31, 2024, in connection with the foregoing, the Company issued shares of Series M Preferred to an investor pursuant to a debt conversion agreement.
At May 31, 2025, all shares of the Series M Preferred were outstanding, which if converted as of May 31, 2025, would have resulted in the issuance of shares of common stock.
Series N Nonvoting Convertible Preferred Stock
On January 30, 2025, the Company filed a Certificate of Designation of Series N Convertible Preferred Stock (the “Series N Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series N Preferred, par value $ per share.
The terms and conditions set forth in the Series N Certificate of Designation are summarized below:
Ranking. The Series N Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series N Preferred will be entitled to dividends, on an as-converted basis, equal to dividends actually paid, if any, on shares of Company common stock.
Voting. Except as provided by the Series N Certificate of Designation, or as otherwise required by the Nevada Revised Statutes, holders of Series N Preferred are not entitled to voting rights. However, the Company may not, without the consent of holders of a majority of the outstanding shares of Series N Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series N Preferred or alter or amend the Series N Certificate of Designation, (ii) amend its Charter, amended and restated bylaws or other charter documents in any manner that adversely effects any rights of the holders of the Series N Preferred, or (c) enter into any agreement with respect to the foregoing.
Conversion. On the third business day after the date that the Company’s stockholders approve the conversion of Series N Preferred into shares of common stock in accordance with the listing rules of Nasdaq, each outstanding share of Series N Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series N Conversion Ratio”), subject to beneficial ownership limitations.
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series N Preferred will be entitled to participate, on an as-converted-to-common stock basis calculated based on the Series N Conversion Ratio (as defined in the Series N Certificate of Designation), with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
On January 28, 2025, the Company entered into
a securities purchase agreement with an accredited investor, pursuant to which the Company issued and sold the purchaser (i) restricted
shares of Series N Preferred and (ii) warrants to purchase
On February 24, 2025, the Company and Blue Fysh entered into a Share Exchange Agreement whereby Blue Fysh agreed to issue restricted shares of its common stock to the Company, representing a % interest in Blue Fysh, in exchange for restricted shares of Series N Preferred at an issuance price of $ per share (the “BF Share Exchange”). The BF Share Exchange closed on February 28, 2025.
The Series N Preferred shall be convertible into shares of the Company’s common stock on such date that the Company obtains stockholder approval to remove the Exchange Cap.
At May 31, 2025, shares of the Series N Preferred were outstanding, which if converted as of May 31, 2025, would have resulted in the issuance of shares of common stock.
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Series O Nonvoting Convertible Preferred Stock
On February 6, 2025, the Company filed a Certificate of Designation of Series O Nonvoting Convertible Preferred Stock (the “Series O Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series O Preferred, par value $ per share.
The terms and conditions set forth in the Series O Certificate of Designation are summarized below:
Ranking. The Series O Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series O Preferred will be entitled to dividends, on an as-converted basis, equal to dividends actually paid, if any, on shares of Company common stock.
Voting. Except as provided by the Series O Certificate of Designation, or as otherwise required by the Nevada Revised Statutes, holders of Series O Preferred are not entitled to voting rights. However, the Company may not, without the consent of holders of a majority of the outstanding shares of Series O Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series O Preferred or alter or amend the Series O Certificate of Designation, (ii) amend its Charter, amended and restated bylaws or other charter documents in any manner that adversely effects any rights of the holders of the Series O Preferred, or (c) enter into any agreement with respect to the foregoing.
Conversion. On the third business day after the date that the Company’s stockholders approve the conversion of Series O Preferred into shares of common stock in accordance with the listing rules of Nasdaq, each outstanding share of Series O Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series O Conversion Ratio”), subject to beneficial ownership limitations.
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series O Preferred will be entitled to participate, on an as-converted-to-common stock basis calculated based on the Series O Conversion Ratio (as defined in the Series O Certificate of Designation), with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
On February 6, 2025, in connection with the Company’s
acquisition of the initial
On April 9, 2025, in connection with the Company’s
acquisition of the remaining
On April 28, 2025, in connection with achievement of all business milestones, the Company issued shares of Series O Preferred stock to FSA.
The shares of Series O Preferred issued cannot be converted into shares of Company common stock unless and until the Company’s stockholders approve the conversion of Series O Preferred into shares of common stock in accordance with the listing rules of Nasdaq. Upon receipt of such approval, the shares of Series O Preferred outstanding as of such date shall automatically convert into shares of Company common stock, subject to applicable beneficial ownership limitations.
At May 31, 2025, shares of Series O Preferred were outstanding, which if converted as of May 31, 2025, would have resulted in the issuance of shares of common stock
Series P Nonvoting Convertible Preferred Stock
On February 25, 2025, the Company filed a Certificate of Designation of Series P Nonvoting Convertible Preferred Stock (the “Series P Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series P Preferred, par value $ per share.
The terms and conditions set forth in the Series P Certificate of Designation are summarized below:
Ranking. The Series P Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series P Preferred will be entitled to dividends, on an as-converted basis, equal to dividends actually paid, if any, on shares of Company common stock.
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Voting. Except as provided by the Charter, or as otherwise required by the Nevada Revised Statutes, holders of Series P Preferred are not entitled to voting rights. However, the Company may not, without the consent of holders of a majority of the outstanding shares of Series P Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series P Preferred or alter or amend the Series P Certificate of Designation, (ii) amend its Charter or other charter documents in any manner that adversely effects any rights of the holders of the Series P Preferred, or (c) enter into any agreement with respect to the foregoing.
Conversion. On the third business day after the date that the Company’s stockholders approve the conversion of Series P Preferred into shares of Common Stock in accordance with the listing rules of Nasdaq, each outstanding share of Series P Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series P Conversion Ratio”), subject to beneficial ownership limitations.
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series P Preferred will be entitled to participate, on an as-converted-to-common stock basis calculated based on the Series P Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
On February 26, 2025, the Company entered into
an Equity Investment Agreement with AOS Holdings LLC (“AOS”), pursuant to which the Company issued and sold to AOS (i)
restricted shares of Series P Preferred, (ii) a warrant exercisable in cash to purchase up to
On February 26, 2025, the Company entered into
a Debt Exchange Agreement with AOS, whereby AOS and the Company agreed to convert $
The Series P Preferred shall be convertible into shares of the Company’s common stock on such date that the Company obtains stockholder approval to remove the Exchange Cap, subject to beneficial ownership limitations.
At May 31, 2025, shares of the Series P Preferred were outstanding, which if converted as of May 31, 2025, would have resulted in the issuance of shares of common stock.
Stock Options
On December 28, 2023, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved the adoption of the NextTrip 2023 Equity Incentive Plan (the “2023 Plan”). shares of common stock have been reserved for issuance under the 2023 Plan., and as of May 31, 2025, shares are available for future issuance.
The Company’s 2013 Equity Incentive Plan expired on March 15, 2023. As such, there were no shares of common stock reserved for future issuance thereunder as of May 31, 2025.
On March 26, 2025, under the terms of the 2013 Equity Incentive Plan, all outstanding options terminated upon the change in control effected by the issuance of Contingent Shares pursuant to the Exchange Agreement entered into in connection with the NextTrip Acquisition.
During the three months ended May 31, 2025, the Company granted and issued stock options to purchase an aggregate of shares of common stock under the 2023 Plan. There were no issuances of options during the three months ended May 31, 2024.
The Company generally grants stock options to employees, consultants, and directors at exercise prices equal to the fair market value of the Company’s common stock on the grant date, but not less than 100% of the fair market value. Stock options are typically granted throughout the year and generally vest over a period from one to three years of service and expire five years from the grant date, unless otherwise specified. The Company recognizes compensation expense for the fair value of the stock options over the vesting period for each stock option award.
Total stock-based compensation expense included in the statements of operations for the three months ended May 31, 2025 and 2024 was $ and $, respectively, all of which is related to stock options.
| 2025 | ||||
| Dividend yield | % | |||
| Risk-free interest rate | %- | % | ||
| Expected volatility | %- | % | ||
| Expected life (in years) | ||||
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| Options |
Weighted Average Exercise Price ($) |
Weighted Average Remaining Contractual Life (Yrs.) |
Aggregate Intrinsic Value ($) |
|||||||||||||
| Options outstanding at February 29, 2024 | ||||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited or cancelled | ( |
) | - | |||||||||||||
| Options outstanding at February 28, 2025 | ||||||||||||||||
| Granted | ||||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited or cancelled | ( |
) | - | |||||||||||||
| Options outstanding May 31, 2025 | ||||||||||||||||
| Options expected to vest in the future as of May 31, 2025 | ||||||||||||||||
| Options exercisable at May 31, 2025 | ||||||||||||||||
| Options vested, exercisable, and options expected to vest at May 31, 2025 | ||||||||||||||||
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the market price of our common stock for those awards that have an exercise price below the market price of our common stock. At May 31, 2025, no options had an exercise price below the $ closing price of our common stock as reported on The Nasdaq Capital Market.
At May 31, 2025, there was unrecognized stock-based compensation expense related to unvested stock options.
Stock Appreciation Rights
The purposes of the 2020 Stock Appreciation Rights Plan (the “2020 SAR Plan”) are to: (i) enable the Company to attract and retain the types of employees, consultants, and directors (collectively, “Service Providers”) who will contribute to the Company’s long-range success; (ii) provide incentives that align the interests of Service Providers with those of the stockholders of the Company; and (iii) promote the success of the Company’s business. The 2020 SAR Plan provides for incentive awards that are only in the form of stock appreciation rights payable in cash (“SARs”). No shares of common stock are reserved or will be issued pursuant to the 2020 SAR Plan.
SARs may be granted to any Service Provider. A SAR is the right to receive an amount equal to the Spread with respect to a share of the Company’s common stock (a “Share”) upon the exercise of the SAR. The “Spread” is the difference between the exercise price per share specified in a SAR agreement on the date of grant and the fair market value per share on the date of exercise of the SAR. The exercise price per share will not be less than 100% of the fair market value of a Share on the date of grant of the SAR. The administrator of the 2020 SAR Plan will have the authority to, among other things, prescribe the terms and conditions of each SAR, including, without limitation, the exercise price and vesting provisions, and to specify the provisions of the SAR Agreement relating to such grant.
On March 26, 2025, under the terms of the 2020 SAR Plan, all outstanding unvested SARs became immediately vested and exercisable upon the change in control effected by the issuance of Contingent Shares pursuant to the Exchange Agreement entered into in connection with the NextTrip Acquisition.
The Company did not grant any SARs during the three months ended May 31, 2025 or May 31, 2024.
The Company recognizes compensation expense and a corresponding liability for the fair value of the SARs over the vesting period for each SAR award. The SARs are revalued at each reporting date in accordance with ASC 718 “Compensation-Stock Compensation,” and any changes in fair value are reflected in the Statement of Operations as of the applicable reporting date.
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| SARs |
Weighted Average Exercise Price ($) |
Weighted Average Remaining Contractual Life (Yrs.) |
Aggregate Intrinsic Value ($) |
|||||||||||||
| SARs outstanding at February 29, 2024 | ||||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited or cancelled | ( |
) | - | |||||||||||||
| SARs outstanding at February 28, 2025 | ||||||||||||||||
| Granted | - | |||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited or cancelled | - | |||||||||||||||
| SARs outstanding May 31, 2025 | ||||||||||||||||
| SARs expected to vest in the future as of May 31, 2025 | - | |||||||||||||||
| SARs exercisable at May 31, 2025 | ||||||||||||||||
| SARs vested, exercisable, and SARs expected to vest at May 31, 2025 |
|
|
||||||||||||||
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the market price of our common stock for those awards that have an exercise price below the market price of our common stock. At May 31, 2025, no SARs had an exercise price below the $ closing price of our common stock as reported on The Nasdaq Capital Market.
At May 31, 2025, there was unrecognized stock-based compensation expense related to unvested SARs.
Warrants
Assumptions:
| 2025 | ||||
| Dividend yield | % | |||
| Risk-free interest rate | %- | % | ||
| Expected volatility | %- | % | ||
| Expected life (in years) | - | |||
Warrant activity for the three months ended May 31, 2025 and the year ended February 28, 2025 was as follows:
| Warrants |
Weighted Average Exercise Price ($) |
Weighted Average Remaining Contractual Life (Yrs.) |
||||||||||
| Warrants outstanding at February 29, 2024 | ||||||||||||
| Granted | ||||||||||||
| Exercised | ( |
) | - | |||||||||
| Forfeited or cancelled | ( |
) | - | |||||||||
| Warrants outstanding at February 28, 2025 | ||||||||||||
| Granted | ||||||||||||
| Exercised | - | |||||||||||
| Forfeited or cancelled | - | |||||||||||
| Warrants outstanding at May 31, 2025 | ||||||||||||
NOTE 12 - Subsequent Events
The Company’s management has evaluated subsequent events after the balance sheet dated as of May 31, 2025 through July 15, 2025, the date of this report.
On July 1, 2025, pursuant to the terms of the Alumni Note, the Company repaid the entire amount of the outstanding principal, including the discount, plus accrued interest thereon. As a result of such repayment, the Alumni Note terminated and the Company has no further obligations under the Alumni Note.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-looking statements
This Quarterly Report on Form 10-Q for the quarter ended May 31, 2025 (this “Quarterly Report”) contains “Forward-Looking Statements.” All statements other than statements of historical fact are “Forward-Looking Statements” including but not limited to, statements regarding our expectations about development and commercialization of our technology, any projections of revenues or statements regarding our anticipated revenues or other financial items, any statements of the plans and objectives of management for future operations, any statements concerning proposed new products or services, any statements regarding future economic conditions or performance, and any statements of assumptions underlying any of the foregoing. All Forward-Looking Statements included in this Quarterly Report are made as of the date hereof and are based on information available to us as of such date. We assume no obligation to update any Forward-Looking Statement. In some cases, Forward-Looking Statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “potential,” or “continue,” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the Forward-Looking Statements contained herein are reasonable, there can be no assurance that such expectations or any of the Forward-Looking Statements will prove to be correct, and actual results could differ materially from those projected or assumed in the Forward-Looking Statements. Future financial condition and results of operations, as well as any Forward-Looking Statements are subject to inherent risks and uncertainties, including factors referred to in our press releases and reports filed with the Securities and Exchange Commission (the “SEC”). All subsequent Forward-Looking Statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Additional factors that may have a direct bearing on our operating results are described under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended February 28, 2025 and elsewhere in this Quarterly Report.
Corporation Information
Sigma Additive Solutions, Inc. (“Sigma”), the legal acquiror of NextTrip, was initially incorporated as Messidor Limited in Nevada on December 23, 1985, and changed its name to Framewaves Inc. in 2001. On September 27, 2010, the name was changed to Sigma Labs, Inc. On May 17, 2022, Sigma Labs, Inc. began doing business as Sigma Additive Solutions, and on August 9, 2022, changed its name to Sigma Additive Solutions, Inc.
On March 11, 2024, Sigma filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation, as amended to date, with the Secretary of State of the State of Nevada, pursuant to which, effective as of 12:01 a.m. Pacific time on March 13, 2024, among other things, Sigma’s corporate name was changed from Sigma Additive Solutions, Inc. to “NextTrip, Inc.”
Our principal executive offices are located at 3900 Paseo del Sol, Santa Fe, New Mexico 87507, and our telephone number is (954) 526-9688. Our website address is www.nexttrip.com. The Company’s annual reports, quarterly reports, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other information related to the Company, are available, free of charge, on our website. The Company’s website and the information contained therein, or connected thereto, are not and are not intended to be incorporated into this Quarterly Report.
The Company provides travel technology solutions with sales originating in the United States, with a primary emphasis on hotels, air, and all-inclusive travel packages. Our proprietary booking engine, branded as NextTrip 2.0, provides travel distributors access to a sizeable inventory.
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The Company owns 50% of Next Innovation LLC, a Joint Venture (“Next Innovation”), which is dormant. No activities nor operations occurred through Next Innovation in fiscal years 2024 or 2025 for this entity, and the Company does not have control of Next Innovation and therefore no minority interest was recorded.
Reverse Acquisition
On October 12, 2023, the Company (then known as Sigma) entered into a Share Exchange Agreement (the “Exchange Agreement”) with NextTrip Holdings, Inc. (“NTH”), NextTrip Group, LLC (“NTG”), and William Kerby (the “NTH Representative”), pursuant to which the Company acquired NTH (the “NextTrip Acquisition”) in exchange for shares of our common stock, which we refer to as the Exchange Shares. The NextTrip Acquisition was consummated on December 29, 2023. As a result, NTH became a wholly owned subsidiary of the Company.
Upon the closing of the NextTrip Acquisition, the shareholders of NTG (collectively, the “NTG Sellers”), were issued a number of Exchange Shares equal to 19.99%, or 156,007 shares, of our issued and outstanding shares of common stock immediately prior to the closing. Under the Exchange Agreement, the NTG Sellers were entitled to receive additional shares of our common stock, referred to as the Contingent Shares, subject to NTH’s achievement of future business milestones (the “Milestone Events”) specified in the Exchange Agreement as follows:
| Milestone Event | Date Earned | Contingent Shares | Status as of the date of this Prospectus | |||
| Launch of NTH’s leisure travel booking platform by either (i) achieving $1,000,000 in cumulative sales under its historical “phase 1” business, or (ii) commencement of its marketing program under its enhanced “phase 2” business. | As of a date six months after the closing date | 1,450,000 Contingent Shares | Achieved. Marketing program under “phase 2” has commenced. | |||
| Launch of NTH’s group travel booking platform and signing of at least five (5) entities to use the Groups Platform. | As of a date nine months from the closing date (or earlier date six months after the closing date) | 1,450,000 Contingent Shares | Achieved. Five groups have been contracted to use the Groups Platform. | |||
| Launch of NTH’s Travel Agent Platform and signing up of at least 100 travel agents to the platform (which calculation includes individual agents of an agency that signs up on behalf of multiple agents). | As of a date 12 months from the closing date (or earlier date six months after the closing date) | 1,450,000 Contingent Shares | Achieved. The company has signed up more than 175 travel agents to its Travel Agent Platform. | |||
| Commercial launch of PayDlay technology in the NXT2.0 system. | As of a date 15 months after the closing date (or earlier date six months after the closing date) | 1,650,000 Contingent Shares, less the Exchange Shares issued at the closing of the Acquisition | Achieved. PayDlay has been commercially launched. |
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Alternatively, independent of the aforementioned milestones, for each month during the fifteen month period following the closing date in which $1,000,000 or more in gross travel bookings were generated by the combined company, to the extent not previously issued, the Contingent Shares would be issuable up to the maximum Contingent Shares issuable under the Exchange Agreement.
The Contingent Shares, together with the shares of our common stock issued at the closing, was not to exceed 6,000,000 shares of our common stock, or approximately 90.2% of our issued and outstanding shares of common stock immediately prior to closing.
The Exchange Agreement provided that William Kerby, the Chief Executive Officer and co-founder of NTH, was appointed as Chief Executive Officer of the Company and Donald P. Monaco was appointed as a director of the Company as of the closing of the NextTrip Acquisition. Additionally, pursuant to the Exchange Agreement, the NTH Representative (Mr. Kerby) shall be entitled to designate a replacement for one additional director of the Company upon achievement of each of the milestones under the Exchange Agreement (the “Board Appointment Rights”).
In connection with the NextTrip Acquisition, the Company and Nasdaq determined that the issuance of Contingent Shares upon achievement of any one of the Milestone Events would result in a change in control of the Company under Nasdaq Listing Rule 5635(a). Pursuant to Nasdaq Listing Rule 5110(a), the Company was required to submit an initial listing application with Nasdaq and to obtain Nasdaq approval of the initial listing application prior to the issuance of the Contingent Shares; failure to obtain such approval in advance of the Contingent Share issuance would have resulted in Nasdaq issuing the Company a delisting determination and commencing delisting proceedings with respect to its common stock.
Pursuant to Section 2.3(b)(vi) of the Exchange Agreement, whether a Milestone Event is met and the Contingent Shares are issuable under Section 2.3 is to be determined by the Company and NTH on a mutually agreeable date (each a “Milestone Payment Determination Date”) no later than thirty (30) days following notice by NTH to the Company that such Milestone Event has been met. If Contingent Shares are determined to be issuable under this Section, the Company is required to issue such additional Contingent Shares within 60 days following each Milestone Payment Determination Date.
As of December 9, 2024, no Contingent Shares had been issued despite neither party disputing that, at such time, three of the four milestones had been met. This was a result of delays with the Company’s Form S-1 registration statement and the Company’s pending initial listing application with Nasdaq (the “Regulatory Delays”) pursuant to Nasdaq Listing Rule 5110(a). NTH had not sent formal notice to the Company at such time but expressed an intent to do so in the near future.
As a result, on December 9, 2024, the Company and NTH entered into that certain Forbearance Agreement, whereby NTH agreed to forbear from issuing the Milestone Payment Determination Date notice until January 31, 2025 or earlier in the event of a default (the “Forbearance Expiration Date”) in exchange for an agreement by the Company that, if such Nasdaq initial listing application is not approved by such date that, (i) all earned Contingent Shares will be issued withing five (5) business days of the Forbearance Expiration Date and (ii) all such Board Appointment Rights will be exercised and the director designees will be approved within five (5) business days of the Forbearance Expiration Date. On January 31, 2025, the Nasdaq initial listing application was not yet approved and the parties entered into Amendment No. 1 to Forbearance Agreement to extend the Forbearance Expiration Date to March 31, 2025.
On March 25, 2025, the Company received a letter from Nasdaq notifying the Company that it had approved the Company’s initial listing application in connection with the issuance of the Contingent Shares. On March 26, 2025, the Company issued the NTG Sellers an aggregate of 4,393,993 of the Contingent Shares in satisfaction of the Company’s obligations under the Exchange Agreement. As a result of Nasdaq’s approval of our initial listing application, the issuance of the Contingent Shares was completed in compliance with Nasdaq Listing Rule 5110(a) and the Company’s shares of common stock continue to trade on the Nasdaq Capital Market under the symbol “NTRP.”
On May 5, 2025, as a result of the achievement of the fourth and final business milestone, the remaining 1,450,000 Contingent Shares were issued to the NTG Sellers. No additional shares are issuable pursuant to the Exchange Agreement as of the date of this Quarterly Report.
In July 2025, Mr. Kerby, in his capacity as the NTH Representative, informed the Company of his election to exercise the Board Appointment Rights pursuant to the Exchange Agreement and designated Stephen Kircher, Jimmy Byrd, Carmen Diges and David Jiang (collectively, the “NTH Appointees”) as the individuals to replace the continuing legacy Sigma directors. On July 14, 2025, the Company’s Board of Directors appointed the NTH Appointees as directors of the Company, in each case effective July 28, 2025, at which time Salvatore Battinelli, Jacob Brunsberg, Dennis Duitch and Kent Summers will resign as directors of the Company. Stephen Kircher shall serve as a Class I director, with his initial term expiring at the Company’s 2028 Annual Meeting of Stockholders; Jimmy Byrd shall serve as a Class II director, with his initial term expiring at the Company’s 2026 Annual Meeting of Stockholders; and Ms. Diges and Mr. Jiang shall each serve as a Class III director, with their initial terms expiring at the Company’s 2027 Annual Meeting of Stockholders. Each of NTH Appointees will serve as a director for the balance of their respective initial terms, and until his or her successor is elected and qualified, subject to his or her earlier death, resignation or removal.
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Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported assets, liabilities, sales and expenses in the accompanying financial statements. Critical accounting policies are those that require the most subjective and complex judgments, often employing the use of estimates about the effect of matters that are inherently uncertain. By their nature, changes in these assumptions and estimates could significantly affect our financial position or results of operations. Significant accounting estimates that may materially change in the near future are revenue recognition, impairment of long-lived assets, values of stock compensation awards and stock equivalents granted as offering costs, and allowance for bad debts and inventory obsolescence. Such critical accounting policies, including the assumptions and judgments underlying them, are disclosed in Note 1 of the Notes to Financial Statements included in this Quarterly Report. However, we do not believe that there are any alternative methods of accounting for our operations that would have a material effect on our financial statements.
The critical accounting policies and estimates addressed below reflect our most significant judgements and estimates used in the preparation of our financial statements.
Revenue Recognition – The Company recognizes revenue in accordance with ASC 606 which involves identifying the contracts with customers, identifying performance obligations in the contracts, determining transactions price, allocating transaction price to the performance obligation and recognizing revenue when the performance obligation is satisfied.
The Company recognizes revenue when the customer has purchased the product, the occurrence of the earlier of date of travel or the date of cancellation has expired, as satisfaction of the performance obligation, the sales price is fixed or determinable and collectability is reasonably assured. Revenue for customer travel packages purchased directly from the Company are recorded gross (the amount paid to the Company by the customer is shown as revenue and the cost of providing the respective travel package is recorded to cost of revenues).
The Company generates revenues from sales directly to customers as well as through other distribution channels of tours and activities at destinations throughout the world.
The Company controls the specified travel product before it is transferred to the customer and is therefore a principal, based on but not limited to, the following:
| ● | The Company is primarily responsible for fulling the promise to provide such travel product. | |
| ● | The Company has inventory risk before the specified travel product has been transferred to a customer or after transfer of control to a customer. | |
| ● | The Company has discretion in establishing the price for the specified travel product. |
Payments for tours or activities received in advance of services being rendered are recorded as deferred revenue and recognized as revenue at the earlier of the date of travel or the last date of cancellation (i.e., the customer’s refund privileges lapse).
Investments in Equity Securities without Readily Determinable Fair Value
In accordance with ASC 321-10-35-2, the Company holds certain investments in equity securities in which the Company does not have significant influence or control, and for which fair value is not readily determinable. These investments are primarily accounted for at cost, less any impairment. The carrying amount is periodically evaluated for impairment, and if necessary, an impairment loss is recognized in the statement of operations. These investments are not adjusted for unrealized gains or losses unless an impairment is identified.
For investments in non-public entities where fair value is not determinable, the Company does not adjust the carrying value for changes in fair value, except for impairment losses. The fair value of these investments is disclosed when it is practicable to determine.
Promissory Note Receivable
Pursuant to the terms of the Promissory Note (the “NextPlay Note”) between NTH and NextPlay Technologies, Inc. (“NextPlay”), the NextPlay Note was due and payable in full on the earlier of September 1, 2023 or the date the Company completed a financing of $10 million or more. No payments have been made by NextPlay, and as such NextPlay is in default under the terms of the NextPlay Note.
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On January 27, 2025, as creditors of NextPlay, Donald P. Monaco, the Company’s Chairman, William Kerby, the Company’s Chief Executive Officer, and Ian Sharpe, the Chief Operating Officer of the Company’s Media division, filed a petition to force NextPlay into involuntary bankruptcy as a result of unpaid fees. The proceedings are ongoing and the outcome at this time is uncertain and cannot be predicted. As a result, management has determined that the collectability of the NextPlay Note is uncertain and has therefore established an allowance for doubtful accounts for the entire balance of $2,567,665.
Business Overview
NextTrip is an early-stage, technology-driven travel company developing an integrated travel booking and media platform designed to connect leisure, group and business travelers to the world. Our travel booking platform is powered by our proprietary NXT2.0 booking engine, which offers extensive inventory, supporting both travelers and distributors with a platform for curating personalized experiences and efficient trip planning and booking. We market our travel services through several core brands including NextTrip Vacations (direct-to-consumer leisure travel), Five Star Alliance (luxury and cruise bookings) and NextTrip Business (small-to-mid-sized corporate travel) and differentiate our platform through specialty features, including specialized widgets for groups (the “Groups Platform”) and travel agents (the “Travel Agent Platform”), as well as PayDlay, a delayed payment booking option. Complementing our booking engine are our media properties, including Journy.tv, Compass.tv and Travel Magazine, which provide destination content that we believe will drive high-intention traffic into our booking funnel and, over time, constitute a separate high-margin advertising revenue stream.
By integrating our media properties with our travel booking platform, our ambition is to build a next-generation travel solution for consumers, allowing them to better research and explore desired travel destinations. To accomplish this, we will be using content from ours and others’ media platforms featuring travel videos, blogs and articles along with access to curated travel products from our strategic partnerships, all supported by our technology and call center agents. Upon full integration of our travel and media platforms, we believe our offers will both inspire and empower consumers to make informed choices when booking. This contrasts with the existing online travel agency (“OTA”) model that focuses on volume bookings with little to no service support.
NXT2.0 – Our Integrated Travel Booking Platform
At the core of our business is our proprietary, direct-to-consumer NXT2.0 travel booking engine, which has been continually enhanced and developed through a series of acquisitions of a variety of media and travel assets. NXT2.0 powers several websites, including our main leisure site, nexttrip.com, and fivestaralliance.com, our widgets for The Groups and Travel Agent Platforms, as well as providing travel booking solutions for our media hubs, Journy.tv, travelmagazine.com and Compass.tv. We serve both leisure and business travelers by offering them access to travel blogs, videos and concierge assistance to aid in planning travel, coupled with our proprietary booking platform for the direct purchase of flights, hotels, vacation homes, cruise, tours, and other travel products. Our content includes destination guides, maps and travel tips, designed to help travelers plan memorable trips and book those trips on our travel platform.
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Travel Products and Services
As with many OTAs or booking engines in the travel industry, a travel booking platform is the technological foundation of our business. Our travel-product strategy relies on the NXT2.0 booking engine, whose commercial viability depends on a mix of higher-margin direct contracts and lower-margin, third-party application program interface (“API”) inventory which broadens the platform’s reach. Our principal objective is to negotiate fixed-base-pricing agreements that confer pricing control and margin optimization; these contracts permit us to deploy competitively priced promotions while preserving profitability. Early initiatives have concentrated on hotel and vacation suppliers, including the April 3, 2025 agreement under which NextTrip became the exclusive booking engine for Intimate Hotels of Barbados, a consortium of more than 35 independent properties.
This flexibility affords us the opportunity to run specials on travel offerings that are highly competitive, but we will require additional funding to support comprehensive marketing and awareness campaigns to attract new customers. Until this happens, we are working to target customers with low dollar marketing campaigns in the leisure travel space, as well as pursuing strategic partnerships and specialized travel offerings (e.g. Groups Platform), while maintaining competitiveness within our marketplace through adjustment of pricing.
To supplement and scale our proprietary content, we have layered in third-party inventory through API integrations, thereby furnishing users with comprehensive, one-stop access to more than four million hotels, vacation rentals, cruises, and activity products worldwide. This phase commenced with the acquisition of BookIt.com and associated access to Expedia’s global hotel database and has since expanded to encompass strategic alliances with Nuitée, Global Distribution Systems, Signature Vacations, and other third-party suppliers. The Company has also strengthened its luxury and cruise offerings through the acquisition of Five Star Alliance, whose curated portfolio of over 5,000 five-star properties and 400,000 monthly site visitors, resulting in an industry coveted 4.9-star Trustpilot rating, helps enhance NextTrip’s technology-driven platform. Collectively, these integrations are intended to provide the inventory depth necessary to activate NextTrip’s specialty features, facilitate cross-selling, and establish a scalable foundation for future direct-contract growth. See “Recent Developments – Acquisition of Five Star Alliance” for more details on the transaction.
Our offerings include a mixture of direct contracts and third-party API content which span leisure and business travel, alternative lodging, wellness travel, and media solutions, engaging customers throughout their travel journey with both individual and packaged options. Such product offering highlights include:
| ● | NextTrip Leisure – A robust booking engine providing customized vacation packages, flights, hotels, tours, wellness vacations, cruise and group travel options. | |
| ● | NextTrip Luxury & Business – Five Star Alliance provides access to over 5,000 luxury hotel properties worldwide featuring booking, expense reporting, concierge services, and 24/7 support. |
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| ● | NextTrip Cruises – a fully integrated cruise booking engine providing access to over 10,000 sailings and 35 cruise partners. Travelers benefit from exclusive pricing, concierge service, and bundled packages that include transfers, pre- and post-cruise stays, and expert travel support. | |
| ● | NextTrip Solutions – A suite for product management and white-label solutions, including property management, vacation rentals, and a portal to support travel agents – the Travel Agent Platform. | |
| ● | NextTrip Media – Travel Magazine, Journy.tv and Compass.tv offering travelers inspiration and information through articles, videos, and immersive digital experiences. This will include personalized travel content for users to explore and share with friends and family. |
NXT2.0 Platform Features
Our NXT2.0 travel booking platform at nexttrip.com offers tools for browsing and comparing flights, hotels, tours, cruises and activities. Additionally, we allow travelers to defer payments on select vacation packages with our proprietary PayDlay program. PayDlay allows travelers to purchase travel with a small deposit and make subsequent payments between purchase and the week before travel. Registered NextTrip travelers can manage bookings, receive updates on special offers, and subscribe to newsletters with travel tips and destination highlights. Security is a priority, with rigorous content screening and Payment Card Industry compliance to safeguard customer information. The platform further distinguishes itself through exclusive supplier partnerships that yield preferential rates, targeted promotions, and inventory advantages, while its robust architecture supports complex group bookings—covering conferences, conventions, and destination weddings via a specialized Groups Platform—and equips over 150 beta-testing professionals with a Travel Agent Platform that streamlines multi-passenger reservations.
As we execute our business model by increasing our inventory base and expanding key partnerships, we plan to launch a series of additional features designed to benefit its users. We intend to further integrate our media features with our booking system, bringing together travel content and itinerary management in one interface. The “My Journy” personalized travel-planning magazine is intended to provide editorial features, destination information, and user-specific offers based on analysis of past searches and bookings. By including this content in the booking process, NXT2.0 aims to turn browsing into bookings more efficiently and give suppliers better opportunities to promote their products. We also plan to introduce a multi-level Rewards program that gives benefits for repeat bookings, using different channels, and social interactions within the platform. A planned group chat and sharing feature will let families, friends, and corporate groups work together on itinerary changes in real time. These developmental features are designed to encourage customer loyalty and keep users engaged with NXT2.0. An AI-powered travel assistant is in development which is intended to provide recommendations, price alerts and support, offering services usually found in premium travel agencies in a digital format. Following the initial launch of the Travel Agent Platform, we are continuing development of new tools for travel agents. With new product options like cruises, wellness retreats, and extra experiences, NXT2.0 aims to attract more leisure and business travelers. These updates are intended to boost user engagement, speed up bookings, and increase customer value, while giving NextTrip a competitive edge through technology and personalized data.
NextTrip Integrated Media Solutions
In addition to the key features, robust inventory, and focus on underserved market opportunities like groups and travel agent bookings, a key differentiator benefiting the growth and development of our NXT2.0 booking engine is our media strategy which, when fully integrated with NXT2.0, is intended to offer a comprehensive travel and media ecosystem designed to guide and support consumers throughout their travel experience from inspiration to booking, to travel to sharing the journey on social media.
We leverage our media brands—TravelMagazine.com, Compass.tv, and Journy.tv—as strategic tools to generate travel bookings by integrating content, marketing, and booking technology as well as to generate advertising revenues for third-party content. The strategy includes generating content marketing and inspiration, integrating booking opportunities into that content and generating feedback from such advertising data to better target and identify travel interests and intent, which is intended to lead to growing brand trust and authority and future partnerships and opportunities for sponsored advertising content.
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By combining engaging travel content with seamless booking technology and targeted marketing, our media brands serve as both inspiration engines and direct booking channels. This holistic approach helps capture travelers at every stage of the decision-making process, ultimately driving more bookings through the NXT2.0 platform and independent advertising revenue.
Key media brands and partnership include:
| ● | Travel Magazine – TravelMagazine.com is our media hub. It is an online travel publication that provides articles, guides, tips, and inspiration for travelers. Coming soon is “My Bucket List,” a platform where travelers can create and share personalized travel lists, supported by booking features and local insights. | |
| ● | Compass.tv and Journy.tv – Compass.tv was launched in Fall 2024, as an AVOD (Advertising-based Video on Demand) platform designed to provide streaming television content, often focusing on live and on-demand programming. Compass.tv offers over 1,200 hours of travel content including key travel influencers with millions of followers. In April 2025, we acquired Journy.tv, a Free Ad-Supported Streaming TV (“FAST”) Channel that specializes in travel, adventure, and culture-focused content. |
| ● | Promethean – Promethean is our proprietary interactive video overlay platform which is intended to drive ad revenue and facilitate content-to-commerce integration. | |
| ● | Leap Media – In December 2024, we announced our collaboration with Leap Media Group, a respected leader with over 35 years in TV advertising, media planning and buying, to support the launch of advertising on Compass.tv by delivering branded entertainment content and advertising seamlessly across its platform. | |
| ● | Blue Fysh – In February 2025, the Company and Blue Fysh Holdings Inc. (“Blue Fysh”) entered into a share exchange agreement creating minority ownership positions between the entities, as part of their mutual efforts to work together to expand each company’s business opportunities. See “Recent Developments – Blue Fysh Share Exchange” for more details on the transaction. |
The strategic partnership between NextTrip and Blue Fysh is intended to focus on:
| ● | Expanded audience reach integrating NextTrip’s FAST Channel (Compass.tv), media platform (TravelMagazine.com), and travel products platform (NextTrip.com) with Blue Fysh’s expertise in digital OOH solutions throughout North America; | |
| ● | Increased advertising revenue by leveraging their combined media assets, to enhance their ability to broaden reach, deployment, and higher expected advertising fees, providing greater value to advertisers and stakeholders; | |
| ● | Enhanced sales efforts with NextTrip utilizing Blue Fysh’s strategic sales relationships to contribute advertising sales across NextTrip’s media platforms; and | |
| ● | Increased Brand Awareness as a result of Blue Fysh’s media relationships and digital displays to help create flash marketing campaigns to raise awareness of NextTrip and highlight NextTrip’s travel products and services as well as its media properties, Compass.tv, Journy.tv and Travel Magazine. |
Revenue Strategy and Development of an Integrated Travel and Media Ecosystem
Our revenue strategy and business model focuses on integrating our Media and Travel divisions, offering users a comprehensive ecosystem designed to guide and support them throughout the travel experience. Presently, we generate revenue through two core methods: travel bookings and advertising revenue.
Travel Bookings and Related Services
NextTrip, like many OTAs and travel platforms, can generate revenue through a variety of channels. The specific mix depends on the continued development of our platform, execution of our business model, partnerships, and the types of services we offer at any given time.
Product sales are generally structured either: (1) as a set commission on the sale of a travel product whereby the supplier or wholesaler controls the pricing (as is the case with the majority of Five Star Alliance products), or (2) through a direct, negotiated contract between product supplier and the Company (as is the case with the majority of our products) which allows us to set our own retail pricing based upon market forces and a need to maintain a markup above its fixed cost. Commission-based travel products are generally lower margin than directly negotiated travel products.
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The flexibility of directly negotiated contracts affords us the opportunity to both run specials that are highly competitive but result in low margins, or to simply adjust pricing to maintain competitiveness within its market. Key factors that affect revenues and profitability include competitive market pressures from other travel suppliers and distributors, variable contract terms, marketing budget to create awareness, and seasonality.
Leisure travel bookings currently generate the majority of our nominal revenues. This includes the sale of travel products such as airline tickets, hotel rooms, and cruises as well as travel services such as travel insurance and ground activities. While we believe this revenue can be accelerated with an enhanced marketing budget, management has largely focused on supplements to its travel offerings by including travel technology products such as our Travel Agent and Groups Platforms.
Additionally, offering concierge-level customer support, trip planning assistance or other premium features can provide peace of mind and added convenience and may result in premium service fees added to the cost of booking, which represents direct revenue for us.
Advertising
We are building our own media and advertising ecosystem through Travel Magazine, Journy.tv and Compass.tv. These media platforms are designed to allow users to explore and educate themselves on travel. The revenue strategy in the media division is two-pronged: (1) as the number of viewers/users grows, it drives the advertising rates we can charge third-parties to promote travel products and services to our audience and (2) outside of the direct advertising dollars generated from our media platforms which are expected to become a key driver of higher margin revenue than those earned from travel product sales, as the audience grows it will provide additional opportunities for us to promote ours own travel offerings to highly targeted viewers, thus lessening the need for spending significant marketing dollars through other mediums to attract consumers.
To drive this initiative, we have entered into partnerships with Travel Spike and Leap Media Group, respected leaders in the travel category with decades of experience in TV advertising, media planning and buying. Compass.tv is now equipped to deliver branded entertainment content and advertising seamlessly across its platform, supported by targeted media strategy designed to optimize revenue well delivering high quality content to travel enthusiasts.
Development of Integrated Revenue Model – Strategy and Current Status
As we are still in the developmental phase of our commercial operations and have thus far realized only nominal revenues, the successful execution of our business strategy is predicated upon our capacity to broaden and deepen our supplier base, cultivate and maintain a robust customer network, and obtain adequate financing to underwrite our marketing initiatives and continued product development. There can be no assurance that we will be able to accomplish any of these objectives.
We are in the early stages of development and roll out of our comprehensive travel and media model. While the products introduced to date are now functional and responsible for the current, nominal revenue generation of the Company, the corresponding revenue streams are currently both small and unpredictable relative to the established travel industry leaders.
While our core marketing initiatives have been handicapped due to budget constraints, we have undertaken limited promotions focused on higher margin products, in sought after vacation regions like Mexico and the Caribbean. Recognizing these marketing budget restraints, we focused our efforts on expanding our product offering globally with major suppliers, including Expedia and Nuitée, among others. Management believes this was a critical step to allow for the launch and promotion of specialty travel services like NextTrip’s Groups Platform (i.e. destination weddings, conferences and conventions), NextTrip Travel Agents Platform and business-focused travel offerings. These types of programs require unique technologies, broad global inventory offerings, and specialized servicing. Key to this development is the fact that the platforms fall outside of the typical OTA business model, thereby justifying the supply of travel products from large OTAs, which in turn supports our platforms while being mutually beneficial to both parties.
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Our ability to capitalize on existing travel technology platforms is severely restricted due to the lack of funding to drive marketing programs. Enhancements to the existing platforms along with the introduction of new programs under development are needed to complete the model. The timeline to complete these programs is dependent upon our ability to raise capital; however, we believe that most programs can be delivered within 180 days of obtaining such necessary funding. Once fully functioning, we believe the model will deliver accelerated growth as its “conversion technology” focuses on underserved areas in the travel sector utilizing platforms (i.e. PayDlay, Groups bookings and Travel Agents) that are not well serviced by the major travel industry leaders. Additionally, we have introduced engagement and media solutions (i.e. Journy.tv, Compass.tv and Travel Magazine), allowing users to better plan future travel. We believe a natural extension of providing users with media solutions to assist with travel planning will further the development and growth of a NextTrip ecosystem. This ecosystem is expected to assist us in reducing external marketing expenditures while creating a new revenue channel from targeted and timely advertising designed to assist users in their travel planning. Upon completion of the NextTrip model, we expect to drive revenues from travel solutions outside of the focus of major travel competitors.
We are also engaging Save Your Day Films, a London-based production company celebrated globally for award-winning factual programming and captivating travel content, as an in-house production partner to deliver exclusive content as part of our media strategy, driving traffic, cross-promotional opportunities and licensing revenues.
Recent Developments
Acquisition of Five Star Alliance
On February 6, 2025, the Company entered into a Membership Interest Purchase Agreement (the “FSA Purchase Agreement”) with FSA Travel, LLC (“FSA”), John McMahon, as Majority Member, and the other members of FSA included on the signature page thereto (Mr. McMahon together with such other members, collectively the “FSA Members”). Pursuant to the FSA Purchase Agreement, on February 10, 2025 (the “Initial Closing Date”), the Company purchased 9,608 membership units of FSA (equal to a 49% ownership stake in FSA immediately after closing) (the “Initial Interests”) in exchange for the Company’s (i) payment of $500,000 in cash and (ii) issuance of 161,291 shares of newly designated Series O Nonvoting Convertible Preferred Stock of the Company (“Series O Preferred”) to FSA. In connection with, and as a condition to, the Initial Closing, the Company entered into employment agreements with Mr. McMahon and Courtney May, each of whom became employees of the Company as of the Initial Closing Date.
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In addition, subject to satisfaction of the conditions discussed below, the FSA Purchase Agreement provided the Company with an option (the “Option”), in its sole discretion, to purchase the remaining 51% of the membership units from the FSA Members within 60 days of the Initial Closing Date (the “Final Closing Date”), in exchange for (i) the payment by the Company to the FSA Members of an aggregate of $500,000 in cash and (ii) the issuance of an aggregate of 161,291 shares of Series O Preferred to the FSA Members (the “Final Closing”). The Company’s Option was subject to, and contingent upon, satisfaction of the following conditions: (i) the continued employment of Mr. McMahon and Ms. May by the Company, subject to limited exceptions, (ii) the completion of a $2,000,000 capital raise by the Company, and (iii) the continued operation of FSA by FSA’s existing management until the Final Closing Date.
On April 9, 2025 (the “Final Closing Date”), upon FSA’s agreement to waive the capital raise condition to closing, the Company exercised the Option and, in satisfaction of its obligations under the Purchase Agreement in connection with the Final Closing, the Company paid the FSA Members an aggregate of $500,000 in cash and issued the FSA Members an aggregate of 161,291 shares of Series O Preferred. As a result, as of the Final Closing Date, the Company acquired the remaining 51% of the membership units in FSA and FSA became a wholly owned subsidiary of the Company.
In addition to the above consideration, the FSA Purchase Agreement provided that the Company shall make additional payments to the FSA Members upon achievement of certain milestones, as follows:
| 1. | The payment of $100,000 in cash and the issuance of 32,258 shares of Series O Preferred at such time as FSA shall have Travel Bookings of Travel Products for five groups by FSA, the commissions to FSA for which are scheduled to be collected after the Final Closing; | |
| 2. | The payment of $100,000 in cash and the issuance of 32,258 shares of Series O Preferred at such time as FSA shall have Travel Bookings of cruise related Travel Products, the gross cumulative cost of which to the customers is greater than or equal to $25,000 and the commissions for which are scheduled to collected after the Final Closing; | |
| 3. | The payment of $100,000 in cash and issuance of 32,258 shares of Series O Preferred at such time as FSA shall deliver all necessary passcodes to allow NextTrip full remote access to the FSA booking engine for use by NextTrip; and | |
| 4. | The payment of $100,000 in cash and issuance 32,258 shares of Series O Preferred at such time as FSA shall have Travel Bookings for Travel Products, the cumulative gross cost of which to the customers is greater than or equal to $1 million and the commissions for which are scheduled to be collected after the Final Closing. |
On April 28, 2025, the parties determined that each of the foregoing milestones had been achieved, and in satisfaction of its obligations under the FSA Purchase Agreement, the Company paid the FSA Members an aggregate of $400,000 in cash and issued the FSA Members an aggregate of 120,967 shares of Series O Preferred.
Blue Fysh Share Exchange
On February 24, 2025, the Company and Blue Fysh entered into a share exchange agreement (the “BF Share Exchange Agreement”) whereby Blue Fysh agreed to issue 82 restricted shares of its common stock to the Company, representing a 10% interest in Blue Fysh, in exchange for 483,000 restricted shares of Series N Nonvoting Convertible Preferred Stock (the “Series N Preferred”) of the Company at an issuance price of $5.00 per share (the “BF Share Exchange”). The BF Share Exchange closed on February 28, 2025. The parties entered into the BF Share Exchange Agreement, creating minority ownership positions between the entities, as part of their mutual efforts to work together to expand each company’s business opportunities.
Journy.tv Asset Purchase
On April 1, 2025, the Company entered into an asset purchase agreement (the “Journy.tv Purchase Agreement”) with Ovation LLC (“Ovation”), pursuant to which the Company purchased assets, including without limitation trademarks, domains, apps and certain agreements, and assumed certain liabilities related to Ovation’s Journy.tv business (the “Journy.tv Acquisition”). The Journy.tv Acquisition closed on April 1, 2025.
Pursuant to the Journy.tv Purchase Agreement, as consideration for the Journy.tv Acquisition, the Company paid Ovation $300,000 in cash at closing and issued Ovation 20,000 restricted shares of Company common stock.
In connection with the Journy.tv Acquisition, on April 1, 2025, the Company and Ovation also entered into a License Agreement (the “License Agreement”), pursuant to which Ovation granted the Company the non-exclusive right, throughout the territories and for the term set forth therein, to exhibit, promote, market, advertise, publicize and/or otherwise exploit the programs listed in the License Agreement in the media of (i) FAST via the Journy.tv Channel and (ii) Video On Demand via the Journy.tv Channel. Pursuant to the License Agreement, Ovation shall not license any unaffiliated third party the right to exhibit certain of the programs subject to the License Agreement and shall not use certain of the programs subject to the License Agreement on its owned or operating streaming platforms (subject to certain exceptions). As consideration for the rights granted under the License Agreement, the Company agreed to pay Ovation an aggregate non-refundable license fee of $336,801, payable in various tranches through October 31, 2027. Either party may terminate the License Agreement in the event of a material default by the other party that is not cured within fifteen days after the defaulting party receives notice of such default.
Strategic Partnership with Intimate Hotels of Barbados (“IHB”)
On April 3, 2025, we entered into a strategic partnership with IHB, a collection of over 35 independent hotels and vacation rentals. The Company will serve as the official booking engine for IHB, providing a fully integrated travel portal and customized packaging tools directly on the IHB website.
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NextTrip Cruise Launches, Offering Seamless Cruise Booking Experience
On March 27, 2025, the Company unveiled NextTrip Cruise, a fully integrated cruise booking engine providing access to over 10,000 sailings and 35 cruise partners. Travelers benefit from exclusive pricing, concierge service, and bundled packages that include transfers, pre- and post-cruise stays, and expert travel support.
Changes to the Board of Directors
On July 14, 2025, the Company’s Board of Directors adopted a resolution to increase the size of the board from five to seven members and appointed Bill Kerby, the Company’s Chief Executive Officer, and Andy Kaplan as directors to fill the newly created vacancies, in each case effective July 17, 2025. Mr. Kerby shall serve as a Class II director of the Company, with his initial term expiring at the Company’s 2026 Annual Meeting of Stockholders, and Mr. Kaplan shall serve as a Class III director, with his initial term expiring at the Company’s 2027 Annual Meeting of Stockholders. Each of Messrs. Kerby and Kaplan will serve as a director for the balance of their respective initial terms, and until his successor is elected and qualified, subject to his earlier death, resignation or removal. Additionally, effective July 17, 2025, the Board appointed Mr. Kaplan to serve as a member of the Nominations & Governance Committee of the Board.
Additionally, in accordance with the Board Appointment Rights provided for in the Exchange Agreement, on July 14, 2025, the Company’s Board of Directors appointed the NTH Appointees as directors, in each case effective July 28, 2025, at which time Salvatore Battinelli, Jacob Brunsberg, Dennis Duitch and Kent Summers will resign as directors of the Company. Stephen Kircher shall serve as a Class I director, with his initial term expiring at the Company’s 2028 Annual Meeting of Stockholders; Jimmy Byrd shall serve as a Class II director, with his initial term expiring at the Company’s 2026 Annual Meeting of Stockholders; and Ms. Diges and Mr. Jiang shall each serve as a Class III director, with their initial terms expiring at the Company’s 2027 Annual Meeting of Stockholders. Each of NTH Appointees will serve as a director for the balance of their respective initial terms, and until his or her successor is elected and qualified, subject to his or her earlier death, resignation or removal. Additionally, effective July 28, 2025, the Board appointed the NTH Appointees to serve on the following committees of the Board:
| ● | Audit Committee: Carmen Diges (Chair), Stephen Kircher and Jimmy Byrd | |
| ● | Compensation Committee: Jimmy Byrd (Chair), Stephen Kircher and Carmen Diges | |
| ● | Nominations & Governance Committee: David Jiang (Chair) and Carmen Diges |
Results of Operations
Three Months Ended May 31, 2025 Compared to the Three Months Ended May 31, 2024
During the three months ended May 31, 2025, we recognized revenue of $138,827, as compared to $188,793 in the same period in 2024, a decrease of $49,965, or 27%. The decrease was primarily due to limited marketing expenditures resulting from cash flow constraints.
Our cost of revenue for the three months ended May 31, 2025 was $99,921, as compared to $173,581 for the same period in 2024, a decrease of $73,660, or 42%. The decrease was primarily attributable to the decrease in sales from the first quarter of 2025 as compared to the first quarter of 2024.
Our total operating expenses for the three months ended May 31, 2025 were $4,678,643, as compared to $1,967,613 for the same period in 2024, an increase of $2,711,030, or 138%. The increase was primarily attributable to the stock options granted to the board of directors and an increase in professional services expenses.
Salary and benefits costs were $696,914 for the three months ended May 31, 2025, as compared to $626,752 for the same period in 2024, an increase of $70,162, or 11%. The increase was comprised of: (a) an increase in salaries and benefits of 25,813 due to the conversion of two Five Star Alliance employees to NextTrip employees; (b) an increase in taxes and benefits of $29,653 and (c) an increase in SAR expense of $14,696 due to revaluation in April 2025.
Stock-based compensation was $138,325 for the three months ended May 31, 2025, as compared to $16,394 for the same period in 2024, an increase of $121,931. This increase was primarily the result of an option grant to an employee that was fully vested on the date of the grant.
We incurred general and administrative costs of $30,588 during the three months ended May 31, 2025, as compared to $27,555 in the same period in 2024, an increase of $3,033, or 11%. The increase was primarily the result of a travel expenses incurred for a micro-cap conference in April 2025 of $14,376, partially offset by a decrease in payroll services fees of $5,627, lower utility expenses of $2,050, and lower license and filing fees of $3,666.
We incurred marketing costs of $90,035 during the three months ended May 31, 2025, as compared to $156,188 during the same period in 2024. The decrease of $66,153, or 42%, was due to a decrease in contract labor of $26,630, a decrease in Travel Magazine expenses of $23,824, and a decrease in media advertising of $14,987.
We incurred technology costs of $321,815 during the three months ended May 31, 2025, as compared to $184,669 during the same period in 2024. The increase of $137,146, or 74%, was primarily attributable to (a) an increase in expenses in connection with Compass.tv of $93,000; (b) an increase in expense related to Journy.tv of $61,806; (c) an increase in software expenses of $10,914; (d) an increase in information technology and computer expenses of $8,665; and (e) an increase of $3,324 in cloud database expenses. Partially offsetting these increases is a decrease in dues and subscription expenses of $40,564 in connection with decreased marketing subscriptions.
Professional service fees incurred in the three months ended May 31, 2025 were $1,149,476, as compared to $523,873 incurred during the same period in 2024, an increase of $625,603, or 119%. This increase was a result of: (a) an increase in investor relations expenses of $457,350 (b) an increase in accounting expenses of $94,940 due to the FSA acquisition and timing difference in year-end audit expenses; (c) an increase in outside consulting fees of $137,326 due to a consulting contract with a strategic business development firm; and (d) an increase in lending fees of $61,500 related to bridge loan financings. Partially offsetting these increases were decreased legal expenses of $94,404, and decreased contract labor of $31,109.
Organizational costs for the three months ended May 31, 2025, were $1,999,670, as compared to $28,737 for the same period in 2024, an increase of $1,970,933. The increase is primarily due to an increase in directors’ compensation related to fully vested stock options issued to the directors during the quarter.
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Depreciation and amortization expense for the three months ended May 31, 2025 was $206,650, as compared to $287,586 for the same period in 2024, a decrease of $80,936, or 28%. The decrease was primarily due to no new equipment purchases and an increase in fully amortized intangible assets as of May 31, 2025.
Other operating expenses were $45,170 for the three months ended May 31, 2025, as compared to $115,859 for the same period in 2024. The $70,689 decrease was primarily due to the reduced cost of directors and officers and other insurance costs of $52,268 and a decrease in merchant processing fees of $15,532.
During the three months ended May 31, 2025, we realized net other income of $193,812, as compared to net other expense of $35,225 in the same period in 2024. The increase in net other income of $540,245 was primarily due to a settlement agreement between NextTrip Group, LLC and the Company related to misrepresentation of the collectability of the NextPlay Technologies, Inc. promissory note receivable, partially offset by: (a) a loss of $70,100 related to the extinguishment of debt, and (b) interest expense of $276,333 primarily in connection the amortization of the debt discount associated with bridge loans and interest expense associated with notes payable.
Preferred dividends for the three months ended May 31, 2025 were $64,463, as compared to $10,688 for the same period in 2024. The increase was due to dividends paid to the holders of shares of Series L and Series M Preferred stock issued in connection with debt conversions in December 2024.
In the three months ended May 31, 2025, the net loss from continuing operations totaled $4,457,232, as compared to a net loss from continuing operations of $1,987,626 for the same period in 2024. The operating loss component increased by $2,687,335 in 2025, partially offset by an increase in the other income component of $229,037.
The net loss on the share of net earnings from the equity method investment was $11,307 due to losses incurred in FSA from March 1, 2025 through April 9, 2025 when the full acquisition was finalized.
The net gain on discontinued operations for the three months ended May 31, 2025 was $0 as compared to $8,909 for the same period in 2024.
Our net loss applicable to common stockholders for the three months ended May 31, 2025, was $4,521,695, as compared to $1,989,405 for the same period in 2024, an increase of $2,532,290, or 127%. The increase was primarily attributable to an increase in operating loss from continued operations of $2,687,336 and an increase in preferred dividends of $53,775, a loss on the 49% share of net earnings for the equity method investee of $11,307, and a decrease in income from discontinued operation of $8,909, partially offset by an increase in other income of $229,037.
Liquidity and Capital Resources
Due to uncertainties regarding our ability to meet our current and future operating and capital expenses, there is substantial doubt about our ability to continue as a going concern for 12 months from the date of the filing of this Quarterly Report,
As of May 31, 2025, we had $130,906 in cash and a working capital deficit of $1,142,891, as compared to $1,062,367 in cash and a working capital deficit of $105,577 as of February 28, 2025. Additionally, at May 31, 2025, the amount due under our related party line of credit totaled $1, 486,575.
Given the lack of significant revenue since inception, NextTrip has financed its operations primarily through the issuance of short-term promissory notes, advances from related parties, and private placements of its securities.
On April 1, 2025, we entered into a securities purchase agreement (the “Alumni Purchase Agreement”) with Alumni Capital LP (“Alumni”) for the sale of a short-term promissory note (the “Alumni Note”) and warrants to purchase 80,000 shares of common stock to Alumni for total consideration of $300,000. The Alumni Note was in the principal amount of $360,000 with an original issue discount of $60,000 and guaranteed interest on the principal amount of 10% per annum, which was due and payable on July 1, 2025. In the event of a failure to re-pay the Alumni Note on or before the maturity date, the interest rate would have increased to the lesser of 22% per annum or the maximum amount permitted under law from the due date thereof until the same was paid. The Alumni Note would have been convertible into shares of common stock of the Company only upon an event of default. On July 1, 2025, we repaid the outstanding balance of the Alumni Note in full, including all accrued interest thereon.
On April 9, 2025, we entered into two promissory notes (together, the “Trust Notes”) with Donald P. Monaco Insurance Trust (the “Trust”) under our $2.0 million line of credit. Donald Monaco, chairman of our Board, is the trustee of the Trust. The first note had a principal balance of $500,000 and was issued in exchange for a new cash payment provided by Mr. Monaco. The second note had a principal balance of $145,000 and was issued in exchange for cash advances previously made by Mr. Monaco to the Company.
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On May 6, 2025, we entered into a Line of Credit Agreement (the “MIP Line of Credit”) with Monaco Investment Partners II, LP (“MIP”) providing the Company with a $3,000,000 revolving line of credit. The MIP Line of Credit allows the Company to request advances thereunder from time to time until May 31, 2027, the maturity date. Advances made under the MIP Line of Credit bear simple interest at a rate of 12% per annum, calculated from the date of each respective advance. Accrued interest shall be payable on a monthly basis, no later than the 10th day of the subsequent month. The full outstanding principal balance, together with any accrued and unpaid interest, shall be due and payable in full by the Company on the maturity date. The Company may, at its option, prepay any borrowings under the MIP Line of Credit, in whole or in part, at any time prior to the maturity date, without penalty. Mr. Monaco controls MIP.
We received an initial advance of $1,045,000 under the MIP Line of Credit, which was used to repay (i) a $400,000 cash advance previously made by the Trust to the Company (ii) and all outstanding indebtedness under the terms of the Trust Notes, totaling $645,000. Subsequent advances during May 2025 totaled $441,575, bringing the total outstanding principal at May 31, 2025 to $1,486,575. From June 1, 2025 through July 10, 2025 additional advances totaled $700,000, and as of July 10, 2025 the outstanding principal balance was $2,186,575.
At May 31, 2025, there were other outstanding short term notes payable in the aggregate amount of $654,160, which had maturity dates between August 15, 2025 and December 31, 2025.
Subsequent to the quarter ended May 31, 2025, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which it sold such investor 75,000 restricted shares of common stock for an aggregate purchase price of $226,500.
We will need to raise additional funds through equity or debt financings or other means to support our on-going operations, increase market penetration of our products, expand the marketing and development of our travel and technology driven products, provide capital expenditures for additional equipment and development costs, payment obligations, and systems for managing the business including covering other operating costs and maintaining compliance with Nasdaq listing requirements until planned revenue streams are fully implemented and begin to offset the our operating costs. The Company estimates that it will require a minimum of $5.5 million to continue operations for the next twelve months.
There is no assurance as to the amount and availability of any required future financing or the terms thereof. Such financing, if in the form of equity, may be highly dilutive to our existing stockholders and may otherwise include onerous terms. If in the form of debt, such financing may include covenants and repayment obligations which may be difficult to meet and that could adversely affect our business and operations. To the extent that funds are not available to us, we may be required to delay, limit, or terminate our business and operations and lose our Nasdaq listing.
Net Cash Used in Operating Activities
Net cash used in operating activities from continuing operations totaled $1,042,658 during the three months ended May 31, 2025 as compared to $1,151,220 during the same period in 2024, a decrease of $108,562, or 9.4%.
During the three months ended May 31, 2025, the net cash used in operating activities was the result of a net loss of $4,457,232 before payment of preferred dividends, partially offset by changes in working capital of $124,303, and non-cash expenses of $3,290,271 related to stock-based compensation of $2,086,869, depreciation and amortization of $206,650, amortization of prepaid expenses of $694,912, amortization of debt discount of $231,740 and a loss on the extinguishment of debt of $70,100. Changes in working capital were driven by an increase in deferred revenue of $210,728, a decrease in prepaid expenses of $183,327, and the assumption of the SBA EIDL loan from FSA of $98,757, partially offset by an increase in accounts receivable of $87,554 and a decrease in accounts payable and accrued expenses of $280,955.
During the three months ended May 31, 2024, the net cash used in operating activities was the result of a net loss of $1,987,626 before payment of preferred dividends, partially offset by changes in working capital of $532,426, and non-cash expenses of $303,980 related to depreciation and amortization of $287,586 and stock-based compensation of $16,394. Changes in working capital were driven by a decrease in accounts receivable of $6,322, an increase in deferred revenue of $14,280, and an increase in accounts payable and accrued expenses of $534,493, partially offset by an increase in prepaid expenses of $19,669.
Net Cash Used in Investing Activities
Net cash used in investing activities during the three months ended May 31, 2025 was $1,281,503, which compares to $169,406 of cash used in investing activities during the same period of 2024, an increase of $1,112,097, or 656.5%. The increase resulted from $900,000 related to the acquisition of FSA and $300,000 related to the Journy.tv asset purchase, partially offset by a decrease of $87,903 in capitalized software development costs.
Net Cash Provided by Financing Activities
Net cash provided by financing activities for the three months ended May 31, 2025 was $1,392,700 as compared to $1,024,591 for the same period in 2024. The increase of $368,109, or 36.0%, was due to an increase in advances from related parties of $275,409 and net increase in notes payable to investors of $92,700.
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Our ability to continue to fund our working capital needs will be dependent upon the success of our efforts to generate revenues from our operations, and by obtaining additional capital from the sale of securities or by borrowing funds from lenders to fulfill our business plans. If we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. There is no assurance that we will be successful in obtaining additional funding. The Company is unable to predict the effect a global recession or geopolitical events, including the on-going conflict in Ukraine, may have on its access to the financing markets. If we fail to obtain sufficient funding when needed, we may be forced to delay, scale back or eliminate all or a portion of our commercialization efforts and operations.
Other than the related party promissory notes as described in NOTE 10 – Related Party Transactions to the financial statements included elsewhere in this Quarterly Report, we have no lines of credit or other financing arrangements.
Inflation, changing prices and rising interest rates have had no material effect on our continuing operations over our two most recent fiscal years. However, continued unfavorable trends may affect the prices we pay for materials and other goods and services necessary to our business, thus increasing our use of cash.
We have no off-balance sheet arrangements as defined in Item 303(a) of Regulation S-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and our Chief Financial Officer, after evaluating our “disclosure controls and procedures” (as defined in Exchange Act Rules 13a 15(e) and 15d 15(e)) as of the end of the period covered by this Quarterly Report (the “Evaluation Date”), have concluded that as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, where appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Controls Over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 1A. RISK FACTORS.
You should consider the “Risk Factors” included under Item 1A of our Annual Report on Form 10-K for the year ended February 29, 2025 filed with the SEC on May 29, 2025, as well as the following updated Risk Factor:
As of May 31, 2025, we had $130,906 in cash and a working capital deficit of $1,142,891. Our existing cash on hand and anticipated revenues are not sufficient to fund our anticipated operating costs. We will need to raise additional financing to fund our operations, maintain compliance with the Nasdaq continued listing requirements and implement our business plan. There is no assurance as to the amount and availability of any required future financing or the terms thereof. Such financing, if in the form of equity, may be highly dilutive to our existing stockholders and may otherwise include onerous terms. If in the form of debt, such financing may include covenants and repayment obligations which may be difficult to meet and that could adversely affect our business operations. We have no current understanding or arrangement to obtain any additional financing. To the extent that funds are not available to us, we may be required to delay, limit, or terminate our business operations and may lose our Nasdaq listing.
In light of the foregoing, there is substantial doubt about our ability to continue as a going concern for 12 months from the date of the filing of this Quarterly Report,
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
On May 7, 2025, the Company issued 5,000 restricted shares of common stock, at a price of $3.02 per share, to ITA as a finder’s fee related to the FSA acquisition.
On May 13, 2025, the Company issued 15,000 restricted shares of common stock, at a price of $3.02 per share, pursuant to a consulting contract related to the development and launch of a dedicated beauty and wellness FAST channel.
The aforementioned securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and were issued to the respective recipients in transactions exempt from registration under the Securities Act in reliance upon the exemption from registration provided by Section 4(a)(2) under the Securities Act and/or Regulation D promulgated thereunder. Accordingly, the securities constitute “restricted securities” within the meaning of Rule 144 under the Securities Act.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
Rule 10b5-1 Trading Plans
During the three months ended May 31, 2025, none
of our directors or officers entered into,
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ITEM 6. EXHIBITS.
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| † | Portions of the exhibit, marked by brackets, have been omitted because the omitted information (i) is not material and (ii) would likely cause competitive harm if publicly disclosed. |
| * | Filed herewith. |
| ** | Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
| *** | The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NEXTTRIP, INC. | ||
| July 15, 2025 | By: | /s/ William Kerby |
| William Kerby | ||
|
Chief Executive Officer (Principal Executive Officer) | ||
| July 15, 2025 | By: | /s/ Frank Orzechowski |
| Frank Orzechowski | ||
|
Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | ||
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