NextTrip Inc
For the period ended Aug 31, 2024. Filed Oct 15, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 31, 2024 · Filed Oct 15, 2024
NTRP$1.12+3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-05-31; filed 2024-09-16.
0001493152-24-036417
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-08-31; filed 2024-10-15.
0001493152-24-041139
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 143 current paragraphs.
74 unchanged; 36 reworded; 24 added; 3 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
NextTrip is launching a pilot program featuring a successful travel discovery app to deliver AI-driven and user-generated video content to its Travel Magazine and Compass.tv platforms. In addition, NextTrip will curate exclusive leisure offers for the discovery app and implement enhanced marketing strategies to boost bookings and viewership.
Current report
Launch of Compass.tv
Current report
On October 1, 2024, we announced the launch of our owned and operated Compass.tv travel discovery channel and app. The platform initially features over a thousand hours of travel video content designed to seamlessly convert into commerce opportunities, allowing viewers to book vacations directly through the channel using the NextTrip Booking Engine. In partnership with Dooya Media Group, the Company intends to expand Compass.tv’s offerings by collaborating with influencers who have millions of travel-focused followers, creating a unique and comprehensive travel hub.
Current report
The platform showcases authentic experiences through popular social media influencers, appealing to viewers who prefer real, relatable content over polished productions. With influencer-promoted, destination-focused content, the Company believes that Compass.tv will serve as a premier travel discovery tool, inspiring viewers to plan their next adventure. Its Content Creator Program incentivizes influencers with a competitive revenue-sharing model, while integrating content-to-commerce funnels with targeted ads and affiliate travel offers. As part of the NextTrip ecosystem, Compass.tv works in tandem with NextTrip’s website, tools, and exclusive deals to drive bookings and set a new standard for advertiser engagement with a dynamic, travel-driven audience.
Current report
Launch of Group Booking Technology Platform
Current report
On July 30, 2024, we announced the launch of a new Group Booking Platform (“Platform”), a proprietary technology for its direct-to-consumer travel booking website offering travelers and facilitators a flexible and versatile solution for group travel.
Current report
NextTrip’s Platform streamlines front-end booking flow for customers, empowering each traveler to book their own travel while still remaining part of a group. This versatility allows travelers to book travel when it is most convenient for them. For group leaders, our Platform reduces the workload by eliminating the need to follow up with travelers for details such as travel dates, flight information and room category. Guests can also easily include pre- and post-stays and book activities. Access to the Platform can be sent in email invitations and implemented on a variety of sites, such as conference and other customized websites. Future versions will include additional destination flexibility, customization, and white label capabilities.
Current report
Launch of FlexPay Travel Payment Options
Current report
On July 11, 2024, we announced the launch of FlexPay, a proprietary technology for our direct-to-consumer travel booking website giving customers new flexible payment options and exclusive deals.
Current report
FlexPay is a flexible form of short-term financing that allows customers to pay for accommodations over time through interest-free installments. FlexPay differentiates itself from other travel booking sites with flexible payment and deposit options, exclusive deals, and does not run credit checks or charge interest. Offered as a payment option at checkout, travelers can now book their vacation for as little as $1.00 down at eligible properties.
Current report
Our cost of revenue for the three months ended August 31, 2024 was $155,455, as compared to $23,734 for the same period in 2023, an increase of $131,721, or 555%. The increase was primarily attributable to a rise in sales from the launch of NXT 2.0 in the second quarter of 2024 as compared to the second quarter of 2023.
Current report
Stock-based compensation was $13,841 for the three months ended August 31, 2024, as compared to $0 for the same period in 2023, an increase of $13,841. This increase was a result of the assumption of employee stock options in connection with the reverse acquisition of Sigma Additive Solutions in December 2023.
Current report
We incurred general and administrative costs of $21,677 during the three months ended August 31, 2024, as compared to $128,955 in the same period in 2023, a decrease of $107,278, or 83%. The decrease was primarily the result of a decrease in rent expense in 2023 of $34,587, a decrease in broker fees of $36,746, a decrease in administrative services fees of $27,784, a decrease in travel expense of $3,469 and a decrease in telephone expense of $5,150.
Current report
We incurred marketing costs of $51,347 during the three months ended August 31, 2024, as compared to $49,758 during the same period in 2023. The increase of $1,589, or 3%, was primarily due to an increase of $25,475 in third party contractor expenses associated with the relaunch of the NXT 2.0 booking engine in March of 2024. Partially offsetting the increase was a decrease in marketing and advertising expenses of $9,656, and expenses associated with Travel Magazine of $14,230 as resources were shifted towards NXT 2.0.
Current report
Professional service fees incurred during the three months ended August 31, 2024 were $372,027, as compared to $125,934 incurred during the same period in 2023, an increase of $246,093, or 195%. This increase was a result of: (a) an increase in investor relations expenses of $88,458; (b) an increase in accounting fees of $85,448 for audit and related financial services; (c) an increase in consultants contracted for services of $82,602 for management and administrative services related to the company’s media initiatives, special projects including establishing travel related partnerships, and maintenance and bug fixes with the booking engine. Partially offsetting the increases was a decrease in legal expenses of $10,415.
Current report
Other operating expenses were $63,796 for the three months ended August 31, 2024, as compared to $ 10,001 for the same period in 2023. The $53,795 increase was primarily due to an increase in insurance expense of $35,921, and an increase in bank and merchant processing fees of $17,873.
Current report
The net loss from discontinued operations of $1,131 for the three months ended August 31, 2024 was attributable to the termination of an annual contract of $4,131 from a legacy Sigma subscription. Partially offsetting the loss was a gain of $3,000 from the final payment due from a legacy Sigma customer.
Current report
Six Months Ended August 31, 2024 and August 31, 2023
Current report
Stock-based compensation was $30,235 for the six months ended August 31, 2024, as compared to $0 for the same period in 2023, an increase of $30,235. This increase was a result of the assumption of employee stock options in connection with the reverse acquisition of Sigma in December 2023.
Current report
Organizational costs for the six months ended August 31, 2024, were $109,189, as compared to $0 for the same period in 2023, an increase of $109,189. The increase resulted primarily from directors compensation, and shareholder services expenses including transfer agent fees, and filing services.
Current report
On September 19, 2024 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 $250,000. After deducting commissions, net proceeds to the Company were $230,000.
Current report
The Alumni Note is in the principal amount of $300,000 with an original issue discount of $50,000 and guaranteed interest on the principal amount of ten percent (10%) per annum which shall be due and payable on December 19, 2024. In the event of a failure to re-pay the Alumni Note on or before December 19, 2024, the interest rate will increase to the lesser of twenty-two percent (22%) per annum or the maximum amount permitted under law from the due date thereof until the same is paid. The Alumni Note is convertible into common stock of the Company only upon an event of default.
Current report
On September 19, 2024, the Company also entered into a Common Stock Securities Purchase Agreement (the “Common Stock SPA”) with Alumni Capital. Pursuant to the Common Stock SPA, the Company has the right, but not the obligation to cause Alumni Capital to purchase up to $10 million shares of common stock (the “Commitment Amount”) at the Purchase Price (defined below) during the period beginning on the execution date of the Common Stock SPA and ending on the earlier of (i) the date on which Alumni Capital has purchased $10 million shares of common stock pursuant to the Common Stock SPA or (ii) December 31, 2025. Pursuant to the Common Stock SPA, the “Purchase Price” means the lowest traded price of Company common stock during the five (5) business days prior a closing date multiplied by eighty nine percent (89%). No Purchase Notice will be made without an effective registration statement and no Purchase Notice will be in an amount greater than $500,000.
Current report
On October 1, 2024, the Company entered into a securities purchase agreement with an investor for the sale of 66,225 shares of Series I Convertible Preferred Stock at $3.02 per share, for total consideration of $200,000.
Removed paragraphs (3)
Previous report
Acquisition of Promethean FAST TV Exclusive License
Previous report
We recently entered into a perpetual license agreement with Promethean TV, Inc. (“Promethean”), the owner and developer of the Ignite TV interactive video platform used for driving engagement and commerce. This license will form the basis for our FAST channel – Compasss.TV allowing for targeted advertising via video overlays, allowing the viewer to purchase travel from their screen. This integrated technology is intended to boost engagement with customers driving ad-supported revenue and travel transactions.
Previous report
Stock-based compensation was $16,394 for the three months ended May 31, 2024, as compared to $0 for the same period in 2023, an increase of $16,394. This increase was primarily a result of two employees that moved from Sigma Additive Solutions to NextTrip in 2024.
Reworded paragraphs (36)
Previous wording
Prior to the Exchange Agreement, as described below, NextTrip Holdings, Inc. (“NextTrip”) was a wholly owned subsidiary of NextTrip Group, LLC (“Group”), which in turn, was a wholly owned subsidiary of NextPlay Technologies, Inc. (“NextPlay”). All of the business operations of Group were conducted through its subsidiaries. On January 25, 2023, NextPlay and Group entered into an Amended and Restated Separation Agreement (“Separation Agreement”), Amended and Restated Operating Agreement (“Operating Agreement”), and Exchange Agreement (“Exchange Agreement”, and together the “Agreements”), whereby NextPlay transferred their interest in the travel business to Group. Pursuant to the Exchange Agreement, NextPlay exchanged 1,000,000 Membership Units of Group for 400,000 Preferred Units of Group, with a value of $10 per unit. Prior to the exchange for Preferred Units, Group had a payable due to NextPlay of $17,295,873, representing cash advances and payment of expenses by NextPlay on behalf of Group, while NextPlay had obligations to provide ongoing support to NextTrip. 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 $1.5 million advance remaining under a promissory note, and as such NextTrip recorded the payable as contributed capital.
Current wording
Prior to the Exchange Agreement, as described below, NextTrip Holdings, Inc. (“NextTrip”) was a wholly owned subsidiary of NextTrip Group, LLC (“Group”), which in turn, was a wholly owned subsidiary of NextPlay Technologies, Inc. (“NextPlay”). All business operations of Group were conducted through its subsidiaries. On January 25, 2023, NextPlay and Group entered into an Amended and Restated Separation Agreement (“Separation Agreement”), Amended and Restated Operating Agreement (“Operating Agreement”), and Exchange Agreement (“Exchange Agreement”, and together the “Agreements”), whereby NextPlay transferred their interest in the travel business to Group. Pursuant to the Exchange Agreement, NextPlay exchanged 1,000,000 Membership Units of Group for 400,000 Preferred Units of Group, with a value of $10 per unit. Prior to the exchange for Preferred Units, Group had a payable due to NextPlay of $17,295,873, representing cash advances and payment of expenses by NextPlay on behalf of Group, while NextPlay had obligations to provide ongoing support to NextTrip. 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 $1.5 million advance remaining under a promissory note, and as such NextTrip recorded the payable as contributed capital.
Previous wording
NextPlay is in default under the terms of its promissory note to NextTrip, and as a result, an allowance for doubtful accounts of $1,567,665 was established as of February 29, 2024 as collectability of the entire receivable is uncertain. During the three months ended May 31, 2024 and 2023, there was no bad debt expense recorded related to the allowance account, and the allowance is unchanged as of May 31, 2024. As of May 31, 2023, no allowance for doubtful accounts was established.
Current wording
NextPlay is in default under the terms of its promissory note to NextTrip, and as a result, an allowance for doubtful accounts of $1,567,665 was established as of February 29, 2024 as collectability of the entire receivable is uncertain. During the six months ended August 31, 2024 and 2023, there was no bad debt expense recorded related to the allowance account, and the allowance is unchanged as of August 31, 2024. As of August 31, 2023, no allowance for doubtful accounts was established.
Previous wording
NextTrip, Inc. (the “Company,” “NextTrip,” “we,” “us” and “our”) is an innovative technology company that is building next generation solutions to power the travel industry. NextTrip, through its subsidiaries, provides travel technology solutions with sales originating in the United States, leisure travel, business travel, groups travel, media and tech. We connect people to new places and discoveries by utilizing digital media engagement, seasoned planning expertise, and unique inventory to curate custom vacations and business travel across the globe. Our proprietary booking engine, branded as NXT2.0, provides travel distributors access to a sizeable inventory.
Current wording
NextTrip, Inc. (the “Company,” “NextTrip,” “we,” “us” and “our”) is an innovative technology company that is building next generation solutions to power the travel industry. NextTrip, through its subsidiaries, provides travel technology solutions with sales originating in the United States, leisure travel, business travel, groups travel, media and tech. We connect people to new places and discoveries by utilizing digital media engagement, seasoned planning expertise, and unique inventory to curate custom vacations and business travel across the globe. Our proprietary booking engine, branded as NXT 2.0, provides travel distributors access to a sizeable inventory.
Previous wording
Following NextTrip’s separation from NextPlay, our team focused on the continued technological development of its booking platform. As part of this development, we acquired a travel platform in June 2022 to help power our proprietary NXT2.0 booking technology. Previously, this technology powered the Bookit.com business, a well-established online leisure travel agent generating over $400 million in annual sales as recently as 2019 (pre-pandemic). As part of the acquisition of the assets of Bookit.com, we were not only able to acquire a proven technology platform that could be integrated with our core travel sectors, but we were also able to secure the Bookit.com database with millions of past travelers and opt-in consumers.
Current wording
Following NextTrip’s separation from NextPlay, our team focused on the continued technological development of its booking platform. As part of this development, we acquired a travel platform in June 2022 to help power our proprietary NXT 2.0 booking technology. Previously, this technology powered the Bookit.com business, a well-established online leisure travel agent generating over $400 million in annual sales as recently as 2019 (pre-pandemic). As part of the acquisition of the assets of Bookit.com, we were not only able to acquire a proven technology platform that could be integrated with our core travel sectors, but we were also able to secure the Bookit.com database with millions of past travelers and opt-in consumers.
Previous wording
Since 2022, and the acquisition of the Bookit.com business, we have been focused on the holistic development and integration of the NXT2.0 technology platform, which serves as a base for current and future technology projects as well as proprietary system enhancements. This integration includes re-engaging with and re-negotiating more than 250 contracts with hotel, airline, and cruise suppliers, and securing unique product inventory of more than 3 million lodging, air and tour product suppliers at exceptional rates to over 2,100 destinations in 200+ countries worldwide.
Current wording
Since 2022, and the acquisition of the Bookit.com business, we have been focused on the holistic development and integration of the NXT 2.0 technology platform, which serves as a base for current and future technology projects as well as proprietary system enhancements. This integration includes re-engaging with and re-negotiating more than 250 contracts with hotel, airline, and cruise suppliers, and securing unique product inventory of more than 3 million lodging, air and tour product suppliers at exceptional rates to over 2,100 destinations in 200+ countries worldwide.
Previous wording
We have established a direct-to-consumer presence though a number of websites, powered by the NXT2.0 booking platform. Today, the primary leisure platform is hosted on nexttrip.com and the media platform is hosted on travelmagazine.com.
Current wording
We have established a direct-to-consumer presence though a number of websites, powered by the NXT 2.0 booking platform. Today, the primary leisure platform is hosted on nexttrip.com and the media platform is hosted on travelmagazine.com.
Previous wording
Search Tools and Ability to Compare. Our online marketplace nexttrip.com provides travelers with the tools to search for and filter several travel products including air, car, accommodations (including ALRs) and activities based on various criteria, such as destination, travel dates, type of property, number of bedrooms, amenities, price, or keywords.
Current wording
Search Tools and Ability to Compare. Our online marketplace nexttrip.com provides travelers with the tools to search for and filter several travel products including air, car, accommodations, and activities based on various criteria, such as destination, travel dates, type of property, number of bedrooms, amenities, price, or keywords.
Previous wording
Since the COVID-19 pandemic arose, we have primarily focused on developing our booking engine and establishing relationships with suppliers to increase the size of our instantly bookable inventory. The booking engine has produced little revenue to date because of, among other reasons, the efforts that have been taken to integrate the NextTrip travel platforms with the Bookit.com technology since its acquisition in the summer of 2022. The new platform was launched in beta in May 2023 with a limited number of hotel properties in Mexico and the Caribbean. We have expanded our distribution since launch to include over one million hotel properties worldwide and have completed a full launch of the leisure travel website in May 2024.
Current wording
Since the COVID-19 pandemic arose, we have primarily focused on developing our booking engine and establishing relationships with suppliers to increase the size of our instantly bookable inventory. The booking engine has produced little revenue to date because of, among other reasons, the efforts that have been taken to integrate the NextTrip travel platforms with the Bookit.com technology since its acquisition in the summer of 2022. The new platform was launched in beta in May 2023 with a limited number of hotel properties in Mexico and the Caribbean. We have expanded our distribution since launch to include over one million hotel properties worldwide and completed a full launch of the leisure travel website in August 2024.
Previous wording
As FAST gains momentum globally, we are in the process of developing Compass.TV, with a targeted launch in the fall of 2024. Our innovative travel channel is being developed in conjunction with our perpetual license with Promethean discussed above. With over 1,000 hours of relevant travel content secured, Compass.TV intends to utilize artificial intelligence (“AI”) to personalize content, convert blogs and articles to video, and empower users to create custom travel channels. Integration with the NextTrip Concierge desk will enable seamless booking and assistance.
Current wording
As FAST gains momentum globally, we are in the process of developing Compass.tv, which was soft launched on October 1, 2024. Our innovative travel channel is being developed in conjunction with our perpetual license with Promethean discussed above. With over 1,000 hours of relevant travel content secured, Compass.tv intends to utilize artificial intelligence (“AI”) to personalize content, convert blogs and articles to video, and empower users to create custom travel channels. Integration with the NextTrip Concierge desk will enable seamless booking and assistance.
Previous wording
We are transforming our Travel Magazine website into a social media platform catering to all things travel. The site was re-launched mid-2024, and features enhanced media capabilities and targeted advertising using the Promethean solution. A private consumer section called “MyBucketList,” is targeted for release in the fall of 2024 and will feature connectivity to booking engines, AI travel planner assist and AI-driven content creation.
Current wording
We are transforming our Travel Magazine website into a social media platform catering to all things travel. The site was re-launched mid-2024, and features enhanced media capabilities and targeted advertising using the Promethean solution. A private consumer section called “My Bucket List,” is targeted for release in early 2025 and will feature connectivity to booking engines, AI travel planner assist and AI-driven content creation.
Previous wording
During the three months ended May 31, 2024, we recognized revenue of $188,793, as compared to $19,562 in the same period in 2023, an increase of $169,231, or 865%. The increase was primarily due to the implementation of the BookIt asset as well as the integration of Expedia into our booking engine, NXT 2.0. Expedia significantly increased our product offering from 12-15 hotel chains to over 250,000 properties worldwide, including hotels, resorts, and alternative accommodations.
Current wording
During the three months ended August 31, 2024, we recognized revenue of $154,498, as compared to $27,663 in the same period in 2023, an increase of $126,835, or 459%. The increase was primarily due to the implementation of the BookIt asset as well as the integration of Expedia into our booking engine, NXT 2.0. Expedia significantly increased our product offering from 12-15 hotel chains to over 250,000 properties worldwide, including hotels, resorts, and alternative accommodations.
Previous wording
Our total operating expenses for the three months ended May 31, 2024 were $1,967,613, as compared to $1,031,825 for the same period in 2023, an increase of $935,788, or 90.7%. The increase was primarily attributable to the relaunch of the NXT 2.0 booking engine in March of 2024, as well as the integration of Sigma Additive Solutions, and the transition to public company status.
Current wording
Our total operating expenses for the three months ended August 31, 2024 were $1,468,335, as compared to $1,090,930 for the same period in 2023, an increase of $377,405, or 35%. The increase was primarily attributable to the relaunch of the NXT 2.0 booking engine in March of 2024, as well as the integration of Sigma Additive Solutions, and the transition to public company status.
Previous wording
Organizational costs for the three months ended May 31, 2024, were $28,737 as compared to $0 for the same period in 2023, an increase of $28,737. The increase resulted primarily from shareholder services expenses in connection with the Acquisition, transfer agent fees, and filing services.
Current wording
Organizational costs for the three months ended August 31, 2024 were $80,452, as compared to $0 for the same period in 2023, an increase of $80,452. The increase resulted primarily from directors’ compensation, and shareholder services expenses including transfer agent fees, and filing services.
Previous wording
Depreciation and amortization expense for the three months ended May 31, 2024 was $287,586, as compared to $336,339 for the same period in 2023, a decrease of $48,753, or 14.5%. The decrease was primarily due to no new equipment purchases and an increase in fully amortized intangible assets as of May 31, 2024.
Current wording
Depreciation and amortization expense for the three months ended August 31, 2024 was $95,414, as compared to $331,549 for the same period in 2023, a decrease of $236,135, or 71%. The decrease was primarily due to no new equipment purchases and an increase in fully amortized intangible assets as compared to the same period in 2023.
Previous wording
Preferred dividends for the three months ended May 31, 2024 were $10,668, as compared to $0 for the same period in 2023. The increase was due to dividends associated with outstanding shares of Series E convertible preferred stock assumed in the Acquisition.
Current wording
Preferred dividends for the three months ended August 31, 2024 were $10,688, as compared to $0 for the same period in 2023. The increase was due to dividends associated with outstanding shares of Series E convertible preferred stock assumed in the reverse acquisition of Sigma.
Previous wording
In the three months ended May 31, 2024, the net loss from continuing operations totaled $1,987,626 as compared to a net loss from continuing operations of $1,095,371 for the same period in 2023. The operating loss component increased by $922,420 in 2024, partially offset by a decrease in the other loss component of $30,165.
Current wording
In the three months ended August 31, 2024, the net loss from continuing operations totaled $1,533,519 as compared to a net loss from continuing operations of $1,160,763 for the same period in 2023. The operating loss component increased by $382,291 in 2024, partially offset by a decrease in the other loss component of $9,535.
Previous wording
Our net loss applicable to common stockholders for the three months ended May 31, 2024, was $1,989,405, as compared to $1,095,371 for the same period in 2023, an increase of $894,034, or 81.6%. The increase was primarily attributable to an increase in operating loss from continued operations of $922,420 and an increase in preferred dividends of $10,688, partially offset by a gain from discontinued operations of $8,909, and a decrease in other expense of $30,165.
Current wording
Our net loss applicable to common stockholders for the three months ended August 31, 2024, was $1,545,338, as compared to $1,160,763 for the same period in 2023, an increase of $384,575, or 33%. The increase was primarily attributable to an increase in operating loss from continued operations of 382,291, an increase in preferred dividends of $10,688, and a loss from discontinued operations of $1,131, partially offset by a decrease in other expense of $9,535.
Previous wording
Our cost of revenue for the three months ended May 31, 2024 was $173,581, as compared to $17,718 for the same period in 2023, an increase of $155,863, or 880%. The increase was primarily attributable to the increase in sales from the launch of NXT 2.0 in the first quarter of 2024 as compared to the first quarter of 2023.
Current wording
Our cost of revenue for the six months ended August 31, 2024 was $329,036, as compared to $41,452 for the same period in 2023, an increase of $287,584, or 694%. The increase was primarily attributable to the increase in sales from the launch of NXT 2.0 in the second quarter of 2024 as compared to the second quarter of 2023.
Previous wording
Salary and benefits costs were $626,752 for the three months ended May 31, 2024, as compared to $407,609 for the same period in 2023, an increase of $219,143, or 54%. The increase was comprised of: (a) an increase in salaries and benefits of 212,371 due to the conversion of booking engine contractors to employees and new accounting staff, and (b) an increase in taxes and benefits of $29,153. Partially offsetting the increase was a decrease in SAR expense of $22,381 due to revaluation in March of 2024.
Current wording
Salary and benefits costs were $1,255,511 for the six months ended August 31, 2024, as compared to $768,555 for the same period in 2023, an increase of $486,956, or 63%. The increase was comprised of an increase in salaries and benefits of $446,629 due to the conversion of contractors to employees and new accounting staff, and an increase in taxes and benefits of $59,824. Partially offsetting the increase was a decrease in SAR expense of $19,497 due to the revaluation in March of 2024.
Previous wording
We incurred general and administrative costs of $27,555 during the three months ended May 31, 2024, as compared to $69,103 in the same period in 2023, a decrease of $41,548, or 60%. The decrease was primarily the result of an amortized lease expense in 2023 for $37,026 and $5,485 in penalties associated with the lease liability. Partially offsetting the decrease was an increase in filing fees of $1,796.
Current wording
We incurred general and administrative costs of $49,231 during the six months ended August 31, 2024, as compared to $198,058 in the same period in 2023, a decrease of $148,827, or 75%. The decrease was primarily the result of a decrease in rent expense of $68,027, broker fees of $36,746, administrative fees of $34,860, telephone expenses of $8,772 and travel expenses of $4,859. Partially offsetting the decrease was an increase in licenses and filing fees of $4,437.
Previous wording
We incurred marketing costs of $156,188 during the three months ended May 31, 2024, as compared to $40,781 during the same period in 2023. The increase of $115,407, or 283%, was primarily due to the relaunch of NXT 2.0 booking engine in March of 2024 and ongoing maintenance with Travel Magazine. Marketing and advertising expenses increased by $50,525, contracted marketing services increased by $49,115, and Travel Magazine costs increased by $15,767. During the same period in 2023, the priority was the development of the booking engine, and the product was not ready to market.
Current wording
We incurred marketing costs of $207,536 during the six months ended August 31, 2024, as compared to $90,539 during the same period in 2023. The increase of $116,997, or 129%, was primarily due to the relaunch of our NXT 2.0 booking engine in March of 2024 and ongoing maintenance with Travel Magazine. Marketing and advertising expenses increased by $40,870, third party contracted marketing services increased by $74,590, and Travel Magazine costs increased by $1,537.
Previous wording
We incurred technology costs of $184,669 during the three months ended May 31, 2024, as compared to $35,893 during the same period in 2023. The increase of $148,776, or 414.5% was primarily attributable to an increase in dues and subscription services of $99,649 for external travel services used in connection with our booking engine, and an increase cloud database and software expenses of $49,127 to host the booking engine.
Current wording
We incurred technology costs of $325,691 during the six months ended August 31, 2024, as compared to $119,680 during the same period in 2023. The increase of $206,011, or 172%, was primarily attributable to an increase in dues and subscription services of $157,621 for external travel services used in connection with our booking engine, and an increase cloud database and software expenses of $48,790 to host the booking engine.
Previous wording
Professional service fees incurred in the three months ended May 31, 2024 were $523,873, as compared to $134,370 incurred during the same period in 2023, an increase of $389,503, or 290%. This increase was a result of: (a) an increase in investor relations of $31,875; (b) an increase in legal expense of $173,911 due to the reverse acquisition and associated transactions; (c) an increase in accounting fees of $25,062 for audit and related financial services; (d) an increase in consulting fees of $89,613 due to a contract in connection with an independent financial advisory firm; (e) an increase in consultants contracted for services of $69,042 related to the FastTV channel, and maintenance and bug fixes with the booking engine.
Current wording
Professional service fees incurred in the six months ended August 31, 2024 were $895,900, as compared to $260,304 incurred during the same period in 2023, an increase of $635,596, or 244%. This increase was a result of: (a) an increase in investor relations expenses of $209,946; (b) an increase in legal expense of $163,495 due to the reverse acquisition and associated transactions; (c) an increase in accounting fees of $110,510 for audit and related financial services; and (d) an increase in consultants contracted for services of $151,645 for management and administrative services related to the company’s media initiatives, special projects including establishing travel related partnerships,
Previous wording
Other operating expenses were $115,859 for the three months ended May 31, 2024, as compared to $ 7,730 for the same period in 2023. The $108,129 increase was primarily due to the additional cost of directors and officers insurance of $88,158 and an increase in merchant processing fees of $13,402.
Current wording
Other operating expenses were $179,655 for the six months ended August 31, 2024, as compared to $17,731 for the same period in 2023. The $161,924 increase was primarily due to the additional cost for insurance of $124,079, an increase in merchant processing fees of $33,765, and an increase in filing and other fees of $4,080.
Previous wording
In the three months ended May 31, 2024, we realized net other expense of $35,225, as compared to net other expense of $65,390 in the same period in 2023. The decrease in net other income of $30,165 was primarily due to a decrease in interest expense associated with convertible loans due to their conversion in connection with the Acquisition.
Current wording
In the six months ended August 31, 2024, we realized net other expense of $99,452, as compared to net other expense of $139,151 in the same period in 2023. The decrease in net other income of $39,699 was primarily due to a decrease in interest expense associated with convertible loans due to their conversion in December 2023.
Previous wording
The net gain from discontinued operations of $8,909 for the three months ended May 31, 2024 consisted primarily of revenue of $11,731 from legacy Sigma customers, and a gain of $5,961 from the settlement of a trade accounts payable at a discount, partially offset by expenses of $8,783 consisting of legal expenses and Sigma’s legacy investor relations website.
Current wording
The net gain from discontinued operations of $7,778 for the six months ended August 31, 2024 consisted primarily of revenue of $14,731 from legacy Sigma customers, and a gain of $6,011 from the settlement of a trade accounts payable at a discount, partially offset by expenses of $12,964 consisting of legal expenses, termination of a subscription contract, and Sigma’s legacy investor relations website.
Previous wording
As of May 31, 2024, we had $36,679 in cash and a working capital deficit of $2,109,148, as compared with $323,805 in cash and a working capital deficit of $262,005 as of February 29, 2024. Additionally, at May 31, 2024, the amount due under our notes payable to related parties totaled $1,752,868.
Current wording
As of August 31, 2024, we had $102,006 in cash and a working capital deficit of $3,664,705, as compared with $323,805 in cash and a working capital deficit of $262,005 as of February 29, 2024. Additionally, at August 31, 2024, the amount due under our notes payable to related parties totaled $2,718,594.
Previous wording
Between June 1, 2024 and September 13, 2024, additional net related party advances totaled $978,822, and the aggregate outstanding principal balance of related party advances as of September 13 2024 was $2,731,690.
Current wording
Between September 1, 2024 and October 11, 2024, additional net related party advances totaled $80,060, and the aggregate outstanding principal balance of related party advances as of October 11, 2024 was $2,802,654.
Previous wording
Because of the numerous risks and uncertainties associated with the research, development, and commercialization of our products, however, we are unable to estimate the exact amount of our working capital requirements. Our future capital requirements will depend on many factors, including:
Current wording
Because of the numerous risks and uncertainties associated with the research, development, and commercialization of our products, however, we are unable to estimate the exact amount of our working capital requirements. Our future capital requirements will depend on many factors, including without limitation:
Previous wording
Net cash used in operating activities from continuing operations totaled $1,151,220 as compared to $591,391 during the same period in 2023, an increase of $559,829, or 94.71%.
Current wording
Net cash used in operating activities from continuing operations for the six months ended August 31, 2024 totaled $1,960,326, as compared to $1,393,118 during the same period in 2023, an increase of $567,208, or 41%.
Previous wording
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 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.
Current wording
During the six months ended August 31, 2024, the net cash used in operating activities was the result of a net loss of $3,521,145 before preferred dividends, partially offset by changes in working capital of $1,147,584, and non-cash expenses of $413,235 related to depreciation and amortization of $383,000 and stock-based compensation of $30,235. Changes in working capital were driven by a decrease in accounts receivable of $22,881, a decrease in prepaid expenses of $96,051, and an increase in accounts payable and accrued expenses of $1,033,506, partially offset by an increase in security deposits of $3,000 and a decrease in deferred revenue of $1,854.
Previous wording
During the three months ended May 31, 2023, the net cash used in operating activities was the result of a net loss of $1,095,371, partially offset by changes inworking capital of $130,615, and non-cash expenses of $373,365 related to depreciation and amortization. Changes in working capital were driven by an increase in accounts payable and accrued expenses of $147,231, partially offset by a decrease in accounts receivable of $5,000 and a decrease in deferred revenue of $11,616.
Current wording
During the six months ended August 31, 2023, the net cash used in operating activities was the result of a net loss of $2,256,134, partially offset by changes inworking capital of $120,279, and non-cash expenses of $742,737 related to depreciation and amortization. Changes in working capital were driven by an increase in accounts payable and accrued expenses of $110,959 and an increase in deferred revenue of $57,156, partially offset by an increase in accounts receivable of $5,000, an increase of $34,114 in prepaid expenses, and a decrease in notes receivable of $8,722.
Previous wording
Net cash used in investing activities during the three months ended May 31, 2024 was $169,406, which compares to $165,975 of cash used in investing activities during the same period of 2023, an increase of $3,431, or 2.1%. The decrease resulted from a slight decrease in capitalized software development costs during the first three months of 2024.
Current wording
Net cash used in investing activities during the six months ended August 31, 2024 was $389,568, which compares to $345,807 of cash used in investing activities during the same period of 2023, an increase of $43,761, or 13%. The increase resulted from an increase in capitalized software development costs during the period.
Previous wording
Net cash provided by financing activities for the three months ended May 31, 2024 was $1,024,591, as compared to $555,745 for the same period in 2023. The increase of $468,846, or 84.4% was due to an increase in advances from related parties of $909,091 and the issuance of a promissory note for $100,000 to an investor, partially offset by a decrease in the issuance of convertible notes of $540,245.
Current wording
Net cash provided by financing activities for the six months ended August 31, 2024 was $2,120,317, as compared to $1,562,352 for the same period in 2023. The increase of $557,965, or 36%, was due to an increase in advances from related parties of $1,597,817, the issuance of promissory notes for $140,000 to investors, and the issuance of preferred shares to investors for $90,000, partially offset by a decrease in the issuance of convertible notes of $1,269,852.
Previous wording
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.
Current wording
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 conflicts in Ukraine and Israel/Palestine, 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.
Previous wording
Other than the related party promissory notes as described in NOTE 5 – Related Party Transactions to the financial statements included elsewhere in this Quarterly Report, we have no lines of credit or other financing arrangements.
Current wording
Other than the related party promissory notes as described in Notes 5, 6 and 9 to the financial statements included elsewhere in this Quarterly Report, we have no lines of credit or other financing arrangements.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Salary and benefits costs were $628,759 for the three months ended August 31, 2024, as compared to $360,947 for the same period in 2023, an increase of $267,812, or 74%. The increase was comprised of an increase in salaries and benefits of $234,255 due to the conversion of booking engine contractors to employees and the addition of new accounting staff, an increase in taxes and benefits of $30,672, and an increase in stock appreciation rights of $2,885.
Current report — wording carried from elsewhere
We incurred technology costs of $141,022 during the three months ended August 31, 2024, as compared to $83,786 during the same period in 2023. The increase of $57,236, or 68%, was primarily attributable to an increase in dues and subscription services for external travel services used in connection with our booking engine, and cloud database and software expenses to host the booking engine.
Current report — wording carried from elsewhere
In the three months ended August 31, 2024, we realized net other expense of $64,227, as compared to net other expense of $73,762 in the same period in 2023. The decrease in net other income of $9,535 was primarily due to a decrease in interest expense associated with convertible loans as a result of their conversion in December 2023.
Current report — wording carried from elsewhere
During the six months ended August 31, 2024, we recognized revenue of $343,291, as compared to $47,225 in the same period in 2023, an increase of $296,066, or 627%. The increase was primarily due to the implementation of the BookIt asset as well as the integration of Expedia into our booking engine, NXT 2.0. Expedia significantly increased our product offering from 12-15 hotel chains to over 250,000 properties worldwide, including hotels, resorts, and alternative accommodations.
Current report — wording carried from elsewhere
Our total operating expenses for the six months ended August 31, 2024 were $3,435,948, as compared to $2,122,756 for the same period in 2023, an increase of $1,313,192, or 62%. The increase was primarily attributable to the relaunch of the NXT 2.0 booking engine in March of 2024, as well as the integration of Sigma, and the transition to public company status.
Current report — wording carried from elsewhere
Depreciation and amortization expense for the six months ended August 31, 2024 was $383,000, as compared to $667,889 for the same period in 2023, a decrease of $284,889, or 43%. The decrease was primarily due to no new equipment purchases and an increase in fully amortized intangible assets as compared to the same period in 2023.
Current report — wording carried from elsewhere
Preferred dividends for the six months ended August 31, 2024 were $21,376, as compared to $0 for the same period in 2023. The increase was due to dividends associated with outstanding shares of Series E Preferred Stock assumed in the reverse acquisition of Sigma.
Current report — wording carried from elsewhere
In the six months ended August 31, 2024, the net loss from continuing operations totaled $3,521,145, as compared to a net loss from continuing operations of $2,256,134 for the same period in 2023. The operating loss component increased by $1,304,710 in 2024, partially offset by a decrease in the other loss component of $39,699.
Current report — wording carried from elsewhere
Our net loss applicable to common stockholders for the six months ended August 31, 2024 was $3,534,743, as compared to $2,256,134 for the same period in 2023, an increase of $1,278,609, or 57%. The increase was primarily attributable to an increase in operating loss from continued operations of $1,304,710 and an increase in preferred dividends of $21,376, partially offset by a gain from discontinued operations of $7,778, and a decrease in other expense of $39,699.