NextTrip Inc

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

NEXTTRIP, INC. (FORMERLY SIGMAADDITIVE SOLUTIONS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three Months and Nine Months Ended November 30, 2024, and November 30, 2023

For the Three Months Ended November 30, 2024, and November 30, 2023

For the Nine Months Ended November 30, 2024, and November 30, 2023

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

November 30, 2024

NOTE 1 -Business Description and Going Concern

The Company 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. (“Sigma”).

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”).

The Company’s corporate office is located at 3900 Paseo del Sol, Santa Fe, NM 87507. The consolidated financial statements include the accounts of the Company’s wholly owned subsidiaries, NextTrip Holdings Inc. (“NTH”) incorporated October 22, 2015, and Extraordinary Vacations USA, Inc. incorporated on June 24, 2002.

Prior to the Exchange Agreement as described below, 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 (“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 NTG. Pursuant to the Exchange Agreement, NextPlay exchanged 1,000,000 Membership Units of NTG for 400,000 Preferred Units of NTG, with a value of $10 per unit. Prior to the exchange for Preferred Units, NTG had a payable due to NextPlay of $17,295,873, 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 $1.5 million advance remaining under a promissory note and as such NTH recorded the payable as contributed capital.

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 (“NXT2.0”), provides travel distributors access to a sizeable inventory.

The Company owns 50% of Next Innovation LLC (Joint Venture) and this entity is in the process of a first structure plan. No activities nor operations occurred in 2023 or 2024 for this entity, and NextTrip, Inc. does not have control of the company and therefore no minority interest was recorded.

Reverse Acquisition

On October 12, 2023, the Company (f/k/a 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 156,007 restricted shares of Sigma common stock (the “Closing Shares”), issuable at closing, and the right to receive up to an additional 5,843,993 restricted shares of the Company’s 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 “Acquisition”). Upon the closing of the Acquisition on December 29, 2023, NTH became a wholly owned subsidiary of the Company.

The Contingent Shares, together with the Closing Shares, will not exceed 6,000,000 shares of the Company’s common stock, or approximately 90.2% of the issued and outstanding shares of Sigma common stock immediately prior to the closing. The Acquisition will likely result in a change of control, with the members of NTG receiving an aggregate number of shares that exceeds the number of shares that held by the legacy shareholders of Sigma. As a result, the 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 presented is that of NTH.

As of November 30, 2024, three of the four business milestones had been achieved as further described in Note 2 under “Loss Per Share” below. As a result,4,393,993 of the contingent shares were eligible to be issued. The remaining 1,450,000 contingent shares will be eligible for issue upon the launch of the Travel Agent platform.

Despite having achieved three of the four business milestones, the Company cannot issue the contingent shares without risk of the Company’s common stock being suspended from trading and delisted until Nasdaq approves the Company’s initial listing application, which is pending with Nasdaq. The Company has been advised by Nasdaq that issuing the contingent shares prior to approval of the application will result in the immediate delisting of the Company, as such issuance will trigger a change in control. The Company intends to issue said securities as soon as Nasdaq has cleared its application.

In accordance with ASC805-40-45-1, 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), withone 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. Comparative information presented in the consolidated financial statements also is retroactively adjusted to reflect the legal capital of the legal parent.

Under ASC805-40-45-2, the consolidated financial statements represent the continuation of the legal subsidiary except for the capital structure, as follows:

The assets and liabilities of Sigma Additive Solutions, Inc. were recognized at fair value pursuant to ASC 805.

Going Concern– The Company has sustained losses and had negative cash flows from operating activities since its inception.

The Company currently does not have sufficient cash and working capital to fund its operations and will require additional funding in the public or private markets in the near-term to be able to continue operations. The Company currently has no understanding or agreement to obtain such funding, and there is no assurance that we will be successful in obtaining additional funding. If we fail to obtain sufficient funding when needed, we will be forced to delay, scale back or eliminate all or a portion of our commercialization efforts and operations. As a result, there is substantial doubt about our ability to continue as a going concern.

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 November 30, 2024 and 2023 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 February 29, 2024 audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 4, 2024. The results of operations for the period ended November 30, 2024 are not necessarily indicative of the operating results for the full year.

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

Pursuant to the terms of the Promissory Note (the “NextPlay Note”) between NextTrip and 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.

The Company has entered into a non-binding Memorandum of Understanding (“MOU”) with NextPlay, whereby the Company has agreed to forgive the entire amount due under the NextPlay Note in exchange for the cancellation of the 400,000 Preferred Units of NTG issued to them as described in Note 1. The Preferred Units are convertible into 500,000 NextTrip, Inc. common shares, of which 13,001 such common shares were issued as Closing Shares on December 29, 2023. The Company has a commitment from a third party to purchase all 500,000 shares at a price of $2.00 per share. As a result, the since Company can realize a minimum of $1,000,000 from NextPlay’s sale of the common shares, a valuation allowance of $1,567,665 was established as of February 29, 2024. The Company is in the process of negotiating a second offer to purchase the shares, and therefore has not closed the transaction with NextPlay. The Company expects to close one of the transaction options before year-end. During the three and nine months ended November 30, 2024 and 2023, there was no bad debt expense recorded related to the allowance account, and the allowance is unchanged as of November 30, 2024. As of November 30, 2023, no allowance for doubtful accounts was established.

Loss Per Share – The computation of loss per share is based on the weighted average number of shares outstanding during the period in accordance with ASC Topic No. 260, “Earnings Per Share.” Shares underlying the Company’s outstanding warrants, options and preferred stock were excluded due to the anti-dilutive effect they would have on the computation. At November 30, 2024 and 2023 the Company had the following common shares underlying these instruments:

The following table shows the amounts used in computing loss per share and the effect on net loss and the weighted average number of shares of dilutive potential common stock for the three and nine months ended November 30, 2024, and 2023:

On June 10, 2024, the Company determined that three of the four business milestones per the Share Exchange Agreement had been achieved. As a result,4,393,993 of the total contingent shares of 5,843,993 became eligible for issuance. Pursuant to ASC 260, as there are no circumstances under which the shares will not be issued, such eligible contingent shares are included in the computation of basic earnings per share. The following table shows the business milestones and the issuable contingent shares:

The following table shows the reconciliation of the weighted average common shares outstanding for the three and nine months ended November 30, 2024 to the weighted average common shares used in the computation of basic earnings per share:

The issuable contingent shares are of the Company’s sole class of common stock, and as such have the same rights and privileges as existing common stock.

Dilutive loss per share was not presented, as the Company’s outstanding warrants, stock options and preferred stock common equivalent shares for the periods presented would have had an anti-dilutive effect. At November 30, 2024, the Company had outstanding warrants to purchase 679,737 shares of common stock, stock options exercisable for 78,867 shares of common stock,316 shares of Series E Preferred Stock, which could be converted into 3,310 shares of common stock,33,000 shares of Series H Preferred Stock, convertible into 33,000 shares of common stock, and 192,204 shares of Series I Preferred Stock, convertible into 192,204 shares of common stock, resulting in a potential total additional 987,118 shares of common stock outstanding in the future. At November 30, 2023, the Company hadno outstanding potentially dilutive securities.

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 and inventory obsolescence.

**Revenue Recognition–**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 U.S. 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.

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 is 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:

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).

NOTE 3 –Intangible Assets

Intangible assets as of November 30, 2024, and February 29, 2024 consisted of the following:

Amortization expense for the Nine months ended November 30, 2024, and 2023 was $531,093 and $926,295, respectively.

During the three and Nine months ended November 30, 2024, and 2023, the Company recordedno impairment losses associated with the carrying value exceeding its recoverable amount.

The estimated aggregate amortization expense for years ending February 28 is as follows:

NOTE 4 –Goodwill

The legal acquisition of NextTrip Holdings, Inc. by Sigma Additive Solutions, Inc. on December 29, 2023 was determined to be a reverse acquisition, with NextTrip 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 is 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 NextTrip’s objective to obtain access to public markets to provide funding wherewithal to fund business growth. NextTrip’s benefit in paying for these synergies in the reverse acquisition transaction are to avoid the time and expense of organizing and executing an Initial Public Offering (“IPO”) transaction. In the reverse acquisition, $1,167,805 of goodwill was allocated to the NextTrip Reporting Unit under the acquisition method of accounting.

NOTE 5 -Related Party Transactions

On February 29, 2024, NextTrip Holdings, Inc., a wholly owned subsidiary of the Company, issued an unsecured promissory note, in the principal amount of $391,776.54 to William Kerby, to memorialize the terms and conditions of certain working capital advances made by Mr. Kerby to NextTrip. The promissory note accrues interest at a rate equal to 7.5% simple interest per annum, and will automatically mature and become due and payable in full on February 28, 2025, subject to certain limited exceptions. The promissory note, or any portion thereof, may be prepaid by NextTrip Holdings, Inc. without any penalty. Mr. Kerby serves as Chief Executive Officer of both the Company and NextTrip. The promissory note was approved by the Company’s Board of Directors, including all independent members thereof. As of November 30, 2024, the total principal amount outstanding under this note was $348,109.

On March 18, 2024, the Company’s wholly-owned subsidiary, NTH, entered into an unsecured promissory note for a line of credit with Donald Monaco and William Kerby, the Company’s Chairman of the board of directors and Chief Executive Officer, respectively, for the aggregate principal amount of $500,000 with an initial advance of $125,000, provided that the aggregate principal amount of the note does not exceed $500,000 at any time. Under the terms of the note, advances under the line of credit may be made at the Company’s request until August 31, 2024. The note bears an annual interest rate of 7.5% and matures on February 28, 2025, and may be prepaid by the Company at any time prior to maturity without penalty. As of November 30, 2024, the full principal amount of the note had been advanced to the Company and was outstanding.

On April 23, 2024, the Company’s board of directors approved the Company’s wholly-owned subsidiary, NextTrip, to enter into a series of unsecured promissory notes with certain related parties, including investors, directors, officers and employees, who may individually provide funds for the aggregate principal amount of $1,000,000. The notes bear an annual interest rate of 7.5% and shall mature one year from the date of each note’s execution, and may be prepaid by the Company at any time prior to maturity without penalty. On August 14, 2024, at a joint meeting of the Audit Committee and the board of directors, the directors unanimously approved an increase in the principal amount of the related party line of credit to $2,000,000 on the same terms and conditions as previously approved. As of November 30, 2024, the total principal amount advanced under the line of credit was $1,717,296.

On May 21, 2024, NextTrip issued an unsecured promissory note in the principal amount of $455,000 to Mr. Monaco to memorialize the terms and conditions of certain working capital advances made by Mr. Monaco to NextTrip. As of November 30, 2024, the outstanding principal balance of the promissory note was $405,000. The promissory note accrues interest at a rate equal to 7.5% simple interest per annum, and will automatically mature and become due and payable in full on February 28, 2025, subject to certain limited exceptions. The promissory note, or any portion thereof, may be prepaid by NextTrip without any penalty. Mr. Monaco serves as Chairman of the Company’s board of directors. The promissory note was approved by the Company’s Board of Directors, including the independent members thereof.

The following table summarizes the principal amounts outstanding by promissory note date and related party as of November 30, 2024:

The total amounts due to related parties at November 30, 2024 and February 29, 2024 totaled $2,970,405 (as provided in the table above) and $828,277, respectively.

NOTE 6 –Notes Payable

On May 24, 2024, the Company issued an unsecured promissory note for $100,000 to an investor upon receipt of proceeds. The note bears an annual interest rate of 7.5% and will mature and be due and payable on the earlier date of the completion of a public financing or October 31, 2024, unless extended by the written consent of the investor. The note can be prepaid at any time by the Company without penalty.

On July 11, 2024, the Company issued an unsecured promissory note for $40,000 to an investor upon receipt of proceeds. The note bears an annual interest rate of 7.5% and will mature and be due and payable on June 25, 2025, unless extended by the written consent of the investor. The note can be prepaid at any time by the Company without penalty.

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.

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.

On October 18, 2024, the Company entered into a securities purchase agreement (the “Note SPA”) with 1800 Diagonal Lending, LLC (“1800 Diagonal”) for the sale of a short-term promissory note (the “1800 Diagonal Note”) for total consideration of $132,000. After deducting commissions and other expenses, net proceeds to the Company were $115,000.

The 1800 Diagonal Note is in the principal amount of $154,440 with an original issue discount of $22,440 and guaranteed interest on the principal amount of thirteen percent (13%) which shall be due and payable inten (10) equal monthly installments of $17,451.70 commencing on November 15, 2024. The note and interest may be prepaid by the Company at any time with no prepayment penalty. In the event of a failure to pay a monthly installment within five (5) business days of the due date, the interest rate will increase to twenty-two percent (22%) per annum or the maximum amount permitted under law from the due date thereof until the same is paid. The 1800 Diagonal Note is convertible into common stock of the Company only upon an event of default.

On November 8, 2024, the Company entered into a second securities purchase agreement (the “Note2 SPA”) with 1800 Diagonal for the sale of a short-term promissory note (the “1800 Diagonal Note2”) for total consideration of $107,000.

The 1800 Diagonal Note2 is in the principal amount of $125,190 with an original issue discount of $18,190 and guaranteed interest on the principal amount of thirteen percent (13%) which shall be due and payable infive (5) monthly installments. The first installment of 50% of the amount due, totaling $70,732, is payable on May 15, 2025. The remaining 50% is payable infour (4) equal monthly installments of $17,683 commencing on June 15, 2025. The note and interest may be prepaid by the Company at any time with no prepayment penalty. In the event of a failure to pay a monthly installment within five (5) business days of the due date, the interest rate will increase to twenty-two percent (22%) per annum or the maximum amount permitted under law from the due date thereof until the same is paid. The 1800 Diagonal Note2 is convertible into common stock of the Company only upon an event of default.

On November 1, 2024, the Company sold a short-term promissory note to an investor for total consideration of $250,000, resulting in total net proceeds of $250,000. The note is in the principal amount of $287,500 and includes an original issue discount of $37,500. The note is payable in full on or before May 1, 2025, and may be prepaid at any time without penalty. In the event of default, the remaining unpaid balance is due and payable immediately at the option of the investor. In connection with the note, the Company issued a warrant to the investor to purchase up to 100,000 shares of common stock with an exercise price of $3.25. The warrant expires on November 1, 2027.

NOTE 7 -Leases

On January 25, 2023, as part of the separation agreement with NextPlay Technologies Inc., the Company assumed control of a lease arrangement for office space in Florida.

The Company adopted ASU 2016-02 (Topic ASC 842) Leases, which requires a lessee to recognize a lease asset and a leases liability for operating leases arrangements greater than twelve (12) months.

We determined that the arrangement was an operating lease at inception and included it in operating lease ROU assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheet as of February 28, 2023. The office facility was occupied by NextTrip employees through March 16, 2023, when the landlord informed NextTrip that it would not recognize NextTrip as the tenant. The Company continued to negotiate the assumption of the lease with the landlord, but was ultimately unsuccessful, and as a result derecognized the lease in the financial statements as of February 29, 2024. No restatement was made for fiscal year 2023 as the Company had use of the offices at that time and was in negotiations to assume the lease from NextPlay Technologies, Inc. No payments have been made on the lease and no expense has been recognized for the three and nine months ended November 30, 2024. Rent expense for the three and nine months ended November 30, 2023 totaled $48,245 and $123,092, respectively.

The Company leases approximately 350 square feet of space for its principal executive offices at 3900 Paseo del Sol, Santa Fe, New Mexico 87507. The lease has a 6-month term which ends on December 31, 2024. The landlord can terminate the lease upon 30 days written notice and NextTrip can terminate the lease upon 45 days written notice. Therefore, the Company has elected the short-term lease recognition exemption, whereby leases are not recorded on the Company’s balance sheet and lease payments are recognized as lease expense on a straight-line basis over the lease term. Rent expense related to this lease for the three and nine months ended November 30, 2024 was $2,200 and $5,500, respectively, and $0 for the same periods in 2023.

NOTE 8 -Stockholders’ Equity

Common Stock

On March 8, 2024, at a special meeting of stockholders, the Company received approval to increase its authorized shares of common stock from 1,200,000 to 250,000,000 (the “Increase in Authorized”). On March 11, 2024, the Company 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, the Increase in Authorized was implemented.

In the first fiscal quarter of 2025, the Company issued 100,000 shares of common stock upon conversion of 100,000 shares of Series G Convertible Preferred Stock,117,000 shares of common stock upon conversion of 117,000 shares of Series H Convertible Preferred Stock, and 192,502 shares of common stock upon conversion of 192,502 shares of Series I Convertible Preferred Stock.

In the second fiscal quarter of 2025, the Company issued 42,709 shares of common stock to a service provider as partial compensation for development work related to Compass.TV, the Company’s Free-Ad Supported TV (“FAST”) channel.

In the third fiscal quarter of 2025, the Company issued 32,786 shares of common stock as commitment shares for its $10 million Equity Line of Credit and 8,065 common shares as a deposit for the potential acquisition of Five Star Alliance.

Preferred Stock

Under our amended and restated articles of incorporation, as amended (“Articles”), 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 10,000,000 shares of preferred stock, $0.001 par value. An aggregate of 225,520 and 472,996 shares of preferred stock were issued and outstanding at November 30, 2024 and February 29, 2024, respectively.

Series E Convertible Preferred Stock

Under the Certificate of Designations for the Series E Preferred Stock, the Series E Preferred Shares have an initial stated value of 1,500 per share (the “Stated Value”). Dividends at the initial rate of 9% per annum will accrue and, on a monthly basis, shall be payable in kind by the increase of the Stated Value of the Series E Preferred Stock by said amount. The holders of the Series E Preferred Shares have the right at any time to convert all or a portion of the Series E Preferred Shares (including, without limitation, accrued and unpaid dividends and make-whole dividends through the third anniversary of the closing date) into shares of the Company’s common stock at an initial conversion rate determined by dividing the Conversion Amount by the Conversion Price ($0.13 above the consolidated closing bid price for the trading day prior to the execution of the relates stock purchase agreement). The Conversion Amount is the sum of the Stated Value of the Series E Preferred Shares then being converted plus any other unpaid amounts payable with respect to the Series E Preferred Shares being converted, plus the “Make Whole Amount” (the amount of any dividends that, but for the conversion, would have accrued at the dividend rate for the period through the third anniversary of the initial issuance date). The Conversion Rate is also subject to adjustment for stock splits, dividends recapitalizations and similar events.

At November 30, 2024,316 shares of the issued Series E Convertible Preferred Stock were outstanding, which if converted as of November 30, 2024, including the make-whole dividends, would have resulted in the issuance of 3,310 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 5,843,993 shares of the Company’s preferred stock as Series F Convertible Preferred Stock, par value $0.001 per share (the “Series F Preferred”). The Series F Preferred was designated by the Company in connection with its acquisition of NextTrip, and, in the event that the Company does not have sufficient shares of common stock available to fulfill its obligations pursuant to the Share Exchange Agreement governing the terms of the acquisition, shares of Series F Preferred shall be issued to the previous equity holders of NextTrip in lieu of shares of Company common stock.

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 Articles, 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 Articles or other charter documents in any manner that adversely effects any rights of the holders of the Series F Preferred, or (iii) enter into any agreement with respect to the foregoing.

Conversion. On such date that the Company amends its Articles 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 “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 November 30, 2024, no shares of the Series F Convertible Preferred Stock 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 100,000 shares of the Company’s preferred stock as Series G Preferred Stock, par value $0.001 per share (the “Series G Preferred”).

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 Articles 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 Articles or other charter documents in any manner that adversely effects any rights of the holders of the Series G Preferred, or (iii) enter into any agreement with respect to the foregoing.

Conversion. On such date that the Company amends its Articles 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.

Redemption Right. The Company shall have the right to redeem up to 50% of the Series G Preferred Stock for an aggregate price of $1.00 in accordance with the terms of the Perpetual License Agreement.

At November 30, 2024, no shares of the issued Series G Convertible Preferred Stock 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 150,000 shares of the Company’s preferred stock as Series H Preferred Stock, par value $0.001 per share (the “Series H Preferred”).

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 Articles 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 Articles or other charter documents in any manner that adversely effects any rights of the holders of the Series H Preferred, or (iii) enter into any agreement with respect to the foregoing.

Conversion. On such date that the Company amends its Articles 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 November 30, 2024,33,000 shares of the issued Series H Convertible Preferred Stock were outstanding, which if converted as of November 30, 2024, would have resulted in the issuance of 33,000 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 “Series I Certificate of Designation”) with the Secretary of State of the State of Nevada, designating 331,124 shares of the Company’s preferred stock as Series I Convertible Preferred Stock, par value $0.001 per share (the “Series I Preferred”).

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 Articles, 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 Articles or other charter documents in any manner that adversely effects any rights of the holders of the Series I Preferred, or (iii) enter into any agreement with respect to the foregoing.

Conversion. On such date that the Company amends its Articles 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 4,967 shares of Series I Convertible Preferred Stock, at $3.02 per share, resulting in gross proceeds to the Company of $15,000.

On August 31, 2024, the Company entered into a securities purchase agreement with an investor for the sale of 24,834 shares of Series I Convertible Preferred Stock at $3.02 per share, resulting in gross proceeds to the Company of $75,000.

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, resulting in gross proceeds to the Company of $200,000.

Between October 30, 2024 and November 5, 2024, the Company issued 66,000 shares of Series I Convertible Preferred Stock to third parties in connection with investor relations services.

At November 30, 2024,192,204 shares of the issued Series I Convertible Preferred Stock were outstanding, which if converted as of November 30, 2024, would have resulted in the issuance of 192,204 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”).7,000,000 shares of common stock have been reserved for issuance under the 2023 Plan., and as of November 30, 2024, all of such shares are available for issuance.

The Company’s 2013 Equity Incentive Plan expired on March 15, 2023. As such, no new grants may be made under the 2013 Plan. At November 30, 2024, there were 76,367 shares of common stock reserved for issuance upon exercise of outstanding stock options issued under the 2013 Plan prior to its expiration, and an additional 2,500 shares reserved for issuance pursuant to outstanding inducement options.

There wereno issuances of stock options for the nine months ended November 30, 2024 or November 30, 2023.

The Company generally grants stock options to employees 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 and nine months ended November 30, 2024 was $6,227 and $36,463, respectively, all of which was related to stock options. There was $0 stock-based compensation included in the statements of operations for the three and nine months ended November 30, 2023.

Option activity for the nine months ended November 30, 2024 and the year ended February 29, 2024 was as follows:

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 November 30, 2024, no option had an exercise price below the $3.82 closing price of our common stock as reported on the Nasdaq Capital Market.

At November 30, 2024, there was $9,910 of unrecognized stock-based compensation expense related to unvested stock options with a weighted average remaining recognition period of 0.54 years.

Stock Appreciation Rights

The purposes of the 2020 Stock Appreciation Rights Plan (the “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 SAR Plan provides for incentive awards only in the form of stock appreciation rights payable in cash (“SARs”) and no shares of common stock are reserved or will be issued pursuant to the 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 (“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 of common stock on the date of grant of the SAR. The administrator of the 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.

The Company did not grant any SAR’s during the nine months ended November 30, 2024 or November 30, 2023.

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.

SARs activity for the nine months ended November 30, 2024 and the year ended February 29, 2024 was as follows:

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 November 30, 2024, no SAR had an exercise price below the $3.82 closing price of our common stock as reported on the Nasdaq Capital Market.

At November 30, 2024, there was $1,565 of unrecognized stock-based compensation expense related to unvested SARs with a weighted average remaining recognition period of 0.42 years.

Warrants

Warrant activity for the nine months ended November 30, 2024 and the year ended February 29, 2024 was as follows:

NOTE 9 -Subsequent Events

Forbearance Agreement

On December 9, 2024, the Company and NextTrip Holdings, Inc. (“NTH”), entered into a forbearance agreement (the “Forbearance Agreement) related to the issuance of certain contingent shares (the “Contingent Shares”) of Company common stock issuable upon NTH earning certain milestones as provided in that certain share exchange agreement (the “Share Exchange Agreement”) entered into by and among the Company, NTH and NextTrip Group, LLC (“NTG”), the sole stockholder of NTH, and the NTH shareholder representative, pursuant to which the Company acquired 100% of NTH (the “Acquisition”) in exchange for shares of Company common stock, (the “Exchange Shares”). As a result, NTH became a wholly owned subsidiary of the Company as of December 29, 2023 (the “Closing Date”).

Upon the closing of the Acquisition, the members of NTG were issued a number of Exchange Shares equal to 19.99% of the Company’s issued and outstanding shares of common stock immediately prior to the Closing Date. Under the Share Exchange Agreement, the NTG Sellers are also entitled to receive additional Contingent Shares, subject to NTH’s achievement of future business milestones specified in the Share Exchange Agreement.

Pursuant to the Share Exchange Agreement, whether a Milestone Event is met and the Contingent Shares are issuable 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, the Company is required to issue additional Contingent Shares within 60 days following each Milestone Payment Determination Date.

To date, no Contingent Shares have been issued. NTH believes, and the Company does not dispute, that 3 of the 4 milestones have been met as of the date hereof but that, as 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”), NTH has not sent formal notice to the Company because doing so without the approval of Nasdaq’s initial listing application could trigger a delisting and suspension of trading of the Company’s common stock on Nasdaq.

Due to the indefinite delays caused by regulatory matters and NTH desire to receive the Contingent Shares earned to date, NTH has expressed an intent to the Company to deliver formal notice that such Milestone Events have been met. However, due to the fact that such issuance could trigger consequences to all Parties involved, NTH and the Company have negotiated a Forbearance Agreement, whereby NTH agrees 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 such 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 such members will be approved within five (5) business days of the Forbearance Expiration Date.

Related Party Promissory Notes

Between December 1, 2024 and January 10, 2025, additional net related party advances under promissory notes totaled $16,667, and as of January 10, 2025, the aggregate outstanding principal balance of related party promissory notes was $1,174,131, after giving effect to repayments of $62,940 and the conversion of $1,750,000 to Series L Preferred Shares (as defined below).

On September 13, 2024, the Company’s board of directors approved the conversion of up to 100% of the outstanding principal balance of the promissory notes held by Messrs. Kerby and Monaco into shares of a series of non-redeemable convertible preferred stock preferred stock yet to be designated. Messrs. Kerby and Monaco had initially agreed to convert $1,500,000 of their then total outstanding principal balance of $2,666,790 into the new series of convertible preferred stock, and, at their discretion, may convert up to the remaining principal balance, or any portion thereof, into additional shares of such convertible preferred stock at a future date. On December 26, 2024, Messrs. Kerby and Monaco agreed to increase their conversion to $1,750,000, or 61% of their November 30, 2024 outstanding principal balance of $2,879,624.

On December 31, 2024, the Company entered into debt conversion agreements (the “Related Party 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 $1.75 million in existing unsecured promissory notes owed to the Related Parties for monies advanced to the Company into an aggregate of 579,469 restricted shares of newly designated Series L Nonvoting Convertible Preferred Stock of the Company (the “Series L Preferred”), (the “Series L Offering”) at a purchase price of $3.02 per share.

The Series L Preferred shall be convertible into the Company’s common stock (the “Common Stock”) on such date that the Company obtains stockholder approval to remove the Exchange Cap, subject to beneficial ownership limitations.

December 2024 Alumni Capital LLC Promissory Note Repayment

On December 19, 2024, pursuant to the terms of the Alumni Capital LLC short-term promissory note, the Company repaid the entire amount of the outstanding principal, including the discount, plus accrued interest thereon.

December 2024 Series J Preferred Stock Offering

On December 31, 2024, the Company entered into a securities purchase agreement (the “Series J Purchase Agreement”) with certain accredited investors (the “Purchasers”), pursuant to which the Company issued and sold an aggregate of 297,788 restricted shares of newly designated Series J Nonvoting Convertible Preferred Stock of the Company (the “Series J Preferred”), (the “Series J Offering”) at a purchase price of $3.02 per share.

The Series J Preferred shall be convertible into the Company’s common stock (the “Common Stock”) on such date that the Company obtains stockholder approval to remove the Exchange Cap

December 2024 Promissory Note and Warrant

On December 3, 2024, the Company sold a short-term promissory note to an existing note holder for total consideration of $100,000. The note has an original issue discount of $15,000. The note is payable in full on May 29, 2025, and may be prepaid by the Company at any time without penalty. In the event of default, the entire unpaid balance is immediately due and payable. In connection with the sale of the note, the Company issued a warrant to the investor to purchase up to 40,000 shares of common stock with an exercise price of $3.25. The warrant has athree-year term and expires on December 3, 2027.

December 2024 Series K Preferred Stock, Warrant and Unsecured Promissory Note Offering

On December 31, 2024, the Company entered into a series of agreements whereby an investor agreed to loan the Company up to $1,000,000 against an unsecured promissory note (the “$1M Note”). The $1M Note is payable in full on the earlier date of one (1) year from issuance or the date the Company completes a financing of $5 million or greater, is unsecured and has no prepayment penalty.

In connection with the $1M Note, the investor received fifteen percent (15%) guaranteed prepaid interest issued in the form of Series K Nonvoting Convertible Preferred Stock of the Company (the “Series K Preferred Stock”) as well as 100% warrant coverage, as follows: (1) a warrant exercisable in cash to purchase up to 500,000 shares of Common Stock (the “Cash Warrant”) and (2) a cashless warrant (the “Cashless Warrant”) to purchase up to 500,000 shares of Common Stock, each at an exercise price of $4.00 per share for a period of three years which is exercisable six (6) months from the issuance date.

Concurrently, on December 31, 2024, the Company entered into a series of agreements whereby additional investors agreed to loan the Company $220,000 against an unsecured promissory note (the “$220k Note”). The $220k Note has a maturity date of one (1) year from the date thereof, is unsecured and has no prepayment penalty.

In connection with the $220k Note, the investors also received fifteen percent (15%) guaranteed prepaid interest issued in the form of Series K Preferred Stock as well as a warrant to purchase up to 220,000 shares of the Company’s common stock. The warrant has an exercise price of $4.00 per share and is exercisable for a period of three years, beginning on the issuance date. If at the time of any exercise of the warrant, there is no effective registration statement registering, or no current prospectus available for, the issuance or resale of the shares by the investor, then such investor may elect to exercise up to 50% of the warrant on a cashless basis. In connection with the $220k Note, the Company entered into a registration rights agreement with respect to the shares of Common Stock underlying the Series K Preferred Stock and Half Cashless Warrant (the “Registration Rights Agreement”).

Each Series K investor entered into a securities purchase agreement (the “Series K Purchase Agreement”) whereby an aggregate of 60,595 restricted shares of Series K Preferred, (the “Series K Offering”) at a purchase price of $3.02 per share.

The Series K Preferred shall be convertible into the Company’s common stock (the “Common Stock”) on such date that the Company obtains stockholder approval to remove the Exchange Cap.

Series M Preferred Stock Offering and Debt Conversion

On December 31, 2024, the Company entered into a securities purchase agreement (the “Series M Purchase Agreement,” and together with the Series J Purchase Agreement and Series K Purchase Agreement, the “Purchase Agreements”) with certain accredited investors (the “Purchasers”), pursuant to which the Company may issue and sell up to $500,000 of restricted shares of newly designated Series M Nonvoting Convertible Preferred Stock of the Company (the “Series M Preferred”), (the “Series M Offering,” and together with the Series J Offering, Series K Offering and Series L Offering, the “Offerings”) at a purchase price of $3.02 per share.

In addition, as part of the Series M Offering, on December 31, 2024, the Company entered into a debt conversion agreement (the “Debt Conversion Agreement,” and together with the Related Party Debt Conversion Agreements, the “Debt Conversion Agreements”) with an existing lender whereby the lender and the Company agreed to convert $350,000 in existing unsecured promissory notes plus $52,500 in guaranteed prepaid interest owed to the lender for monies advanced to the Company into Series M Preferred.

The Series M Preferred shall be convertible into the Company’s Common Stock on such date that the Company obtains stockholder approval to remove the Exchange Cap.