NextTrip Inc
For the period ended Feb 28, 2025. Filed May 29, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed May 29, 2025
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-K
Period ended 2024-02-29; filed 2024-09-04.
0001493152-24-035017
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-02-28; filed 2025-05-29.
0001641172-25-012889
Item 7. 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 108 previous paragraphs and 122 current paragraphs.
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Tables are not compared: 3 previous and 4 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 (42)
Current report
You should read the following discussion of our financial condition and results of operations in conjunction with the “Risk Factors” included in Part I, Item 1A, “Risk Factors” of this Report and our Consolidated Financial Statements and related Notes thereto included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Report. See also the discussion of “Forward-Looking Statements” immediately preceding Part I of this Report.
Current report
NextTrip is an early-stage, technology-driven travel company developing an integrated travel booking and media platform designed to connect leisure, group and business travelers to the world. Our travel booking platform is powered by our proprietary NXT2.0 booking engine, which offers extensive inventory, supporting both travelers and distributors with a platform for curating personalized experiences and efficient trip planning and booking. We market our travel services through several core brands including NextTrip Vacations (direct-to-consumer leisure travel), Five Star Alliance (luxury and cruise bookings) and NextTrip Business (small-to-mid-sized corporate travel) and differentiate our platform through specialty features, including specialized widgets for our Groups Platform and Travel Agent Platform, as well PayDlay, a delayed payment booking option. Complementing our booking engine are our media properties, including Journy.tv, Compass.tv and Travel Magazine, which provide destination content that we believe will drive high-intention traffic into our booking funnel and, over time, constitute a separate high-margin advertising revenue stream.
Current report
Our offerings include a mixture of direct contracts and third-party API content which span leisure and business travel, alternative lodging, wellness travel, and media solutions, engaging customers throughout their travel journey with both individual and packaged options. One of the key pillars of the NextTrip ecosystem is NextTrip Vacations, which is our core platform, powered by NXT2.0, delivering seamless booking and customizable travel options across airlines, hotels, cruise, ground activities, and more. We have enhanced our offerings to include luxury travel products and services with our recent acquisition of Five Star Alliance, providing travelers with curated packages and detailed trip planning information through an intuitive booking system and/or its concierge help desk. Such additional product offering highlights include:
Current report
Our ambition is to build a next-generation travel solution for consumers, allowing them to better research and explore desired travel destinations.
Current report
Our revenue strategy and business model focuses on integrating our Media and Travel divisions, offering users a comprehensive ecosystem designed to guide and support them throughout the travel experience. Presently, we generate revenue through two core methods: travel bookings and advertising revenue. Leisure travel bookings currently generate the majority of our nominal revenues. This includes the sale of travel products such as airline tickets, hotel rooms, and cruises as well as travel services such as travel insurance and ground activities. We also currently generate nominal advertising revenues through our media and advertising ecosystem. Our advertising revenue strategy is two-pronged: (1) as the number of viewers/users of Travel Magazine, Journy.tv and Compass.tv grows, it drives the advertising rates we can charge third-parties to promote travel products and services to our audience and (2) outside of the direct advertising dollars generated from our media platforms, which are expected to become a key driver of higher margin revenue than those earned from travel product sales, growth in our audience will provide additional opportunities for us to promote our own travel offerings to highly targeted viewers, thus lessening the need for spending significant marketing dollars through other mediums to attract consumers.
Current report
We are in the early stages of development and roll out of our comprehensive travel and media model. While the products we have introduced to date (See above “NXT2.0 Platform Features – Existing Features”) are now functional and responsible for the current, nominal revenue generation of the Company, the corresponding revenue streams are currently both small and unpredictable relative to the established travel industry leaders. Our ability to capitalize on our existing travel technology platforms is severely restricted due to the lack of funding to drive marketing programs. Enhancements to the existing platforms along with the introduction of new programs under development (See above “NXT2.0 Platform Features – Features in Development”) are needed to complete the model.
Current report
Because we are at an early stage of commercial development and have only nominal revenues to date, our ability to implement our business plan depends on our ability to successfully expand our supplier relationships, attract customers, and secure adequate capital to fund marketing and future product development. There can be no assurance that we will be able to do so.
Current report
Investments in Equity Method Investees
Current report
The Company holds investments in certain entities that are accounted for under the equity method of accounting, as well as investments that are accounted for under the fair value method pursuant to ASC 321, “Investments - Equity Securities.” Under the equity method, investments in entities in which the Company has significant influence, but not control, are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the investees’ earnings or losses and other comprehensive income.
Current report
The Company determines the existence of significant influence based on various factors, including representation on the investees’ board of directors, participation in policy-making processes, and material intercompany transactions.
Current report
The Company’s equity method investments are evaluated periodically for impairment by assessing whether events or changes in circumstances indicate that the carrying value of the investment may not be recoverable. When such indicators exist, the Company performs an impairment test and recognizes an impairment loss to the extent that the carrying amount of the investment exceeds its fair value.
Current report
Distributions received from equity method investees that exceed cumulative earnings recognized by the Company are considered a return of investment and are recorded as a reduction in the carrying amount of the investment.
Current report
Adjustments resulting from changes in the Company’s ownership interest in equity method investees that do not result in a loss of significant influence are accounted for prospectively.
Current report
Basis Difference
Current report
In accordance with ASC 323, “Investments - Equity Method and Joint Ventures,” the Company records a basis difference when the carrying value of its equity method investment differs from its share of the investee’s fair value of net assets at the acquisition date. This basis difference is allocated to the investee’s identifiable assets and liabilities based on their fair values. The amortization of any basis difference related to depreciable assets, such as property, plant, and equipment, is recognized in the Company’s share of the investee’s earnings or losses. Any basis difference related to non-depreciable assets, including goodwill, is generally not amortized, but is subject to impairment testing as necessary.
Current report
The Company assesses the impact of any basis differences on its earnings and the carrying value of its equity method investments. If a basis difference is determined to exist, the appropriate adjustments are made to reflect the amortization of such differences in the consolidated financial statements.
Current report
Investments in Equity Securities without Readily Determinable Fair Value
Current report
In accordance with ASC 321-10-35-2, the Company holds certain investments in equity securities in which the Company does not have significant influence or control, and for which fair value is not readily determinable. These investments are primarily accounted for at cost, less any impairment. The carrying amount is periodically evaluated for impairment, and if necessary, an impairment loss is recognized in the statement of operations. These investments are not adjusted for unrealized gains or losses unless an impairment is identified.
Current report
For investments in non-public entities where fair value is not determinable, the Company does not adjust the carrying value for changes in fair value, except for impairment losses. The fair value of these investments is disclosed when it is practicable to determine.
Current report
Equity in Earnings of Equity Method Investees
Current report
The Company’s share of earnings or losses from equity method investees is recognized in the consolidated statement of operations within “Equity in earnings of equity method investees,” net of any related income taxes.
Current report
Fair Value Measurements
Current report
The fair value of equity method investments is disclosed when available and practical to determine. However, for investments that are not readily marketable, such as non-public entities, fair value is not typically recognized in the financial statements unless the investment is impaired.
Current report
Salaries and benefits expenses were $2,630,663 for the year ended February 28, 2025, as compared to $1,604,487 for the same period in 2024. The increase of $1,026,176 or 64% was the result of an increase in salary expense of $762,052 and payroll taxes of $138,669 due to an increase in headcount, and increased benefits costs of $82,125 due to higher insurance premiums and an increase in the employer contribution toward employee health plans, an increase in bonus expense of $40,000, and an increase in severance expense of $38,141. Partially offsetting these increases was a decrease in SARs compensation of $34,926.
Current report
Stock based compensation totaled $67,874 for the year ended February 28, 2025, versus $116,512 for the year ended February 29, 2024, a decrease of 48,638, or 42%. The decrease of $75,368 was attributable to the accelerated vesting of employee stock options in connection with the reverse acquisition in fiscal 2024; partially offset by $26,760 in stock granted to a former employee as part of a separation agreement.
Current report
General and administrative expense for the year ended February 28, 2025 was $95,341, as compared to $152,106 for the year ended February 29, 2024, a decrease of $56,765. The decrease was primarily attributable to a reduction in travel expenses of $10,141, a decrease in rent and utilities expenses of $4,257, a decrease in payroll expense of $24,925, and a decrease in office and other general expenses of $21,878. Partially offsetting the decrease was an increase in license fees of $4,436.
Current report
Sales and marketing expenses were $307,166 for the year ended February 28, 2025, as compared to $484,250 for the same period in 2024. The decrease of $177,084, or 37%, was primarily due to cost-cutting measures, including the absence of a Black Friday campaign in fiscal year 2025
Current report
Professional service fees were $2,228,481 for the year ended February 28, 2025, as compared to $1,421,508 for the same period in 2024. The increase of $806,973, or 57%, was the result of an increase in investor relations expenses of $343,655, an increase in legal fees of $130,463, an increase in accounting and audit fees of $158,744, and an increase in financial advisory fees of $299,289. Partially offsetting these increases was a decrease in consulting fees of $125,178 due to the capitalization of development work related to Compass.tv.
Current report
Technology expenses for the year ended February 28, 2025 were $843,296, as compared to $311,430 for the year ended February 29, 2024. The increase of $531,866, or 171%, was primarily attributable to an increase in dues and subscription expenses of $37,598 for external travel services used in connection with our booking engine, an increase of $207,333 in cloud database and networking expenses related to hosting our booking engine, an increase in Compass.tv expenses of $281,500 due to third party contracted services related to hosting and maintenance, and an increase in information technology expenses of $5,435.
Current report
Organization costs were $213,613 for the year ended February 28, 2025, as compared to $25,000 for the year ended February 29, 2024. The increase was primarily attributable to directors’ compensation and shareholder services expenses, including transfer agent fees.
Current report
Depreciation and amortization expense for the year ended February 28, 2025, was $713,236 as compared to $1,468,762 for the same period in 2024, a decrease of $755,526, or 51%. The decrease was primarily the result of no new equipment purchases and an increase in fully amortized intangible assets as compared to the same period in 2024.
Current report
Other Expense
Current report
Other expense was $2,707,609 for the year ended February 28, 2025, as compared to other expense of $977,480 for the same period in 2024. The increase of $1,730,129 was primarily due to an increase of loss on extinguishment of debt related to equity conversions of $1,301,469, an increase in interest expense, primarily associated with bridge loans and the amortization of the debt discount of $540,419, and a decrease in other income of $470,534, partially offset by a decrease in loss on disposal of assets of $14,628, and a decrease in the loss on related party receivable of $567,665.
Current report
Net Gain from Discontinued Operations
Current report
The net gain from discontinued operations of $8,344 for the year ended February 28, 2025 consisted primarily of the collection of an outstanding receivable that was written off in the prior year and the reversal of an outstanding payable that was settled for a lower amount.
Current report
On April 1, 2025, we entered into a securities purchase agreement (the “Alumni Purchase Agreement”) with Alumni for the sale of a short-term promissory note (the “Alumni Note”) and warrants to purchase 80,000 shares of common stock to Alumni for total consideration of $300,000.
Current report
The Alumni Note is in the principal amount of $360,000 with an original issue discount of $60,000 and guaranteed interest on the principal amount of ten percent (10%) per annum, which shall be due and payable on July 1, 2025. In the event of a failure to re-pay the Alumni Note on or before the maturity date, the interest rate 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.
Current report
The Alumni Note is convertible into shares of common stock of the Company only upon an event of default.
Current report
On April 9, 2025, we entered into two promissory notes (together, the “Trust Notes”) with Donald P. Monaco Insurance Trust (the “Trust”) under our $2.0 million line of credit. Donald Monaco, chairman of our Board, is the trustee of the Trust. The first note had a principal balance of $500,000 and was issued in exchange for a new cash payment provided my Mr. Monaco. The second note had a principal balance of $145,000 and was issued in exchange for cash advances previously made by Mr. Monaco to the Company.
Current report
On May 6, 2025, we entered into a Line of Credit Agreement (the “MIP Line of Credit”) with Monaco Investment Partners II, LP (“MIP”) providing the Company with a $3,000,000 revolving line of credit. The MIP Line of Credit allows the Company to request advances thereunder from time to time until May 31, 2027, the maturity date. Advances made under the MIP Line of Credit bear simple interest at a rate of 12% per annum, calculated from the date of each respective advance. Accrued interest shall be payable on a monthly basis, no later than the 10th day of the subsequent month. The full outstanding principal balance, together with any accrued and unpaid interest, shall be due and payable in full by the Company on the maturity date. The Company may, at its option, prepay any borrowings under the MIP Line of Credit, in whole or in part, at any time prior to the maturity date, without penalty. Mr. Monaco controls MIP.
Showing the first 40 of 42 passages. Open the source sections for the rest.
Removed paragraphs (28)
Previous report
NextTrip 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, with a primary emphasis on accommodations, hotels, flights, wellness, and all-inclusive travel packages. Its proprietary booking engine, branded as NXT2.0, provides travel distributors access to a sizeable inventory. NextTrip’s NXT2.0 booking technology was built upon a platform acquired in June 2022, which previously 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).
Previous report
Since 2022, NextTrip has been focused on the holistic integration of the NXT2.0 technology platform, which will serve as a base for current and future technology projects as well as proprietary system enhancements. Through this strategic offering, NextTrip will focus on key areas of opportunity in the travel sector and drive enhanced booking conversion rates. NextTrip’s proprietary technology, when combined with media, product offerings and customer service, provides a unique lane to serve mid- to luxury travelers.
Previous report
The spread of the COVID-19 virus globally beginning in January 2020, severely impacted NextTrip’s business. Beginning in March 2020, many U.S. states and foreign countries began issuing “stay-at-home” orders and closed their borders to interstate and international travel. Such restrictions on travel, together with other measures implemented by governments around the world, severely restricted the level of economic activity around the world and had an unprecedented effect on the global travel industry. The public’s ability to travel was severely curtailed through border closures, mandated travel restrictions and limited operations of hotels, airlines, and additional voluntary or mandated closures of travel-related businesses from December 2019 through the beginning of 2022 (and beyond in some jurisdictions). Measures implemented during the COVID-19 pandemic led to unprecedented levels of temporary and permanent business closures, cancellations and limited new travel bookings, having a severe negatively impacted on NextTrip’s business, financial condition and results of operations.
Previous report
Due to the significant decrease in demand for the travel related services provided by NextTrip during the peak of the COVID-19 pandemic, NextTrip shifted its focus to developing and enhancing its program offerings. For example, it enhanced the functionality of its booking engines, including developing a booking engine platform that allows customers to book packaged vacations and cruises along with a platform to arrange and manage business travel.
Previous report
Prior to the reverse acquisition of Sigma, 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”), together the Agreements (“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 report
NextTrip completed the reverse acquisition of Sigma on December 29, 2023. Sigma traded on Nasdaq as SASI which has had a name change to NextTrip, Inc. and now trades as NTRP on Nasdaq.
Previous report
As per the acquisition with Sigma as noted above, the 400,000 Preferred shares will be exchanged for common shares in NextTrip, Inc. 13,001 Closing Shares were issued to NextPlay on December 29, 2023, and 486,999 Contingent Shares will be issued when and if the business milestones are achieved.
Previous report
NextTrip has accounted for the reverse merger as NextTrip being the accounting acquirer and will report the financial results as such on a going forward basis. The capital section reflected in the financial statements are that of NextTrip, Inc. and the operating results are that of the accounting acquirer’s financials. All assets, liabilities and results of operations assumed in the transaction are the basis of the financial information discussed in this Management’s Discussion and Analysis of Financial Conditions and Results of Operations, as well as the financial statements of NextTrip included elsewhere in this Report.
Previous report
Leases
Previous report
NextTrip 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 months.
Previous report
We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets.
Previous report
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Previous report
Salaries & Stock based compensation expenses were $1,604,487 for the year ended February 29, 2024, as compared to $2,124,296 for the same period in 2023. The decrease of $519,809 or 24.5% was the result of a reduction in the number of employees which was offset by the increase in professional contracted staff.
Previous report
Stock based compensation totaled $116,512 for the year ended February 29, 2024, versus $0 for the year ended February 28, 2023. The increase was attributable to expense associated with the assumption of Sigma’s outstanding stock options upon completion of the reverse merger transaction.
Previous report
General and administrative expense for the year ended February 29, 2024 was $152,106, versus $209,561, a decrease of $57,455. The decrease was primarily attributable to a reduction in rent expense of $28,000 and a decrease in medical insurance premiums due to fewer employees in fiscal 2024 as compared to fiscal 2023.
Previous report
Sales and marketing expenses were $484,250 for the year ended February 29, 2024, as compared to $707,137 for the same period in 2023. The decrease of $222,887 or 31.5% was primarily related to reduced marketing costs during the booking engine enhancement upgrade.
Previous report
Professional Service Fees were $1,421,508 for the year ended February 29, 2024, as compared to $615,432 for the same period in 2023. The increase of $806,076 or 131% was the result of an increase in the number of professional contracted staff and an increase in legal costs associated with various public company filings.
Previous report
Technology expenses for the year ended February 29, 2024 were $311,430, as compared to $551,418 for the year ended February 28, 2023. The decrease of $239,988, or 43.5% was primarily attributable to a decrease in website maintenance and bug fixes of $137,258, a decrease in software licensing expenses of $41,215 due to renegotiation of licensing agreements and adoption of more cost-effective solutions, a decrease of $13,420 in cloud database and networking expenses related to optimization of our cloud infrastructure, and a decrease in software hosting expenses of $83,109 due to consolidation of services. Partially offsetting these decreases was an increase in dues and subscriptions of $7,888 in new services to support the Company’s operations, and an increase of $29,341 in expenses associated with maintenance and support of the Company’s technology infrastructure.
Previous report
Organization costs were $25,000 for the year ended February 29, 2024, as compared to $0 for 2023. The increase is attributable to compensation expense for our directors subsequent to the reverse acquisition of Sigma on December 29, 2023.
Previous report
Depreciation and amortization expense for the year ended February 29, 2024, was $1,468,762 as compared to $707,238 for the same period in 2023, an increase of $761,524 or 107.6%. The increase was primarily the result of amortization of software additions during the year as well as amortizing certain software purchases, in particular the BookIt.com asset, over a shorter period due to its estimated useful life.
Previous report
Other Income (Expense)
Previous report
Other expense was $977,480 for the year ended February 29, 2024, as compared to other expense of $81,641 for the same period in 2023. The increase of $895,839 was primarily due to the loss on the promissory note receivable of $1,567,665, partially offset by other income in the amount of $486,633 of which $479,460 was due to the reversal of accrued expenses. Such reversal was offset by the allocation of expenses to the appropriate expense accounts. Additionally, the gain on the extinguishment of liability in the amount of $166,889 resulted from the exchange of a consulting expense for the issuance of common shares.
Previous report
The net loss of $14,718 on the disposal of assets was due to a reduction in goodwill of $52,310, partially offset by a gain of $37,592 on the sale of assets to Divergent, and the decrease in interest expense of $23,251 was due to the conversion of convertible notes to common shares on December 29, 2023.
Previous report
Net Loss From Discontinued Operations
Previous report
The net loss from discontinued operations of $675,314 for the year ended February 29, 2024 consisted primarily of expenses incurred attributable to the legacy business operations of Sigma, and were comprised of $528,930 in retention bonuses paid to former Sigma employees, salaries and benefits of $28,475, severance of $62,500 and organization and other expenses of $60,415. Partially offsetting these expenses was $5,006 in revenue related to a maintenance contract.
Previous report
On March 15, 2024, the Company’s Board of Directors approved the Company to enter into an unsecured promissory note for a line of credit with Messrs. Monaco and Kerby, the Company’s Chairman of the Board of Directors and Chief Executive Officer, respectively, for the aggregate principal amount of $500,000. Under the terms of the note, advances under the line of credit may be made at the Company’s request until May 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 April 19, 2024, the full principal amount of the note had been advanced to the Company and remains outstanding.
Previous report
On April 25, 2024, the Company’s Board of Directors approved the Company to enter into a series of unsecured promissory notes with certain related parties, including investors, directors, officers and employees, who shall 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. As of July 10, 2024, the full principal amount of $1,000,000 had been advanced to the Company and remains outstanding.
Previous report
Net cash used in operating activities from discontinued operations during the year ended February 29, 2024, was $675,314 as compared to $0 during the same period in 2023, and was related to wind down expenses associated with the legacy Sigma business.
Reworded paragraphs (37)
Previous wording
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported assets, liabilities, sales and expenses in the accompanying financial statements. Critical accounting policies are those that require the most subjective and complex judgments, often employing the use of estimates about the effect of matters that are inherently uncertain. By their nature, changes in these assumptions and estimates could significantly affect our financial position or results of operations. Significant accounting estimates that may materially change in the near future are revenue recognition, impairment of long-lived assets, values of stock compensation awards and stock equivalents granted as offering costs, and allowance for bad debts. Such critical accounting policies, including the assumptions and judgments underlying them, are disclosed in Note 1 to the Financial Statements included in this Annual Report. However, we do not believe that there are any alternative methods of accounting for our operations that would have a material effect on our financial statements.
Current wording
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported assets, liabilities, sales and expenses in the accompanying financial statements. Critical accounting policies are those that require the most subjective and complex judgments, often employing the use of estimates about the effect of matters that are inherently uncertain. By their nature, changes in these assumptions and estimates could significantly affect our financial position or results of operations. Significant accounting estimates that may materially change in the near future are revenue recognition, impairment of long-lived assets, values of stock compensation awards and stock equivalents granted as offering costs, and allowance for bad debts. Such critical accounting policies, including the assumptions and judgments underlying them, are disclosed in Note 1 – Business Description and Going Concern in the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Report. However, we do not believe that there are any alternative methods of accounting for our operations that would have a material effect on our financial statements.
Previous wording
NextTrip’s financial statements and related disclosures are prepared pursuant to the rules and regulations of the SEC for annual financial statements, as applicable. The Financial Statements have been prepared using the accrual basis of accounting in accordance with GAAP.
Current wording
The Company’s financial statements and related disclosures are prepared pursuant to the rules and regulations of the SEC for annual financial statements, as applicable. The Financial Statements have been prepared using the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”).
Previous wording
The financial statements of NextTrip have been prepared on a consolidated basis with those of its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Current wording
The financial statements of the Company have been prepared on a consolidated basis with those of its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Previous wording
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These differences could have a material effect on NextTrip’s future results of operations and financial position. Significant items subject to estimates and assumptions include the carrying amounts of intangible assets, depreciation and amortization.
Current wording
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These differences could have a material effect on our future results of operations and financial position. Significant items subject to estimates and assumptions include the carrying amounts of intangible assets, depreciation and amortization.
Previous wording
Information about key assumptions and estimation uncertainty that has a significant risk of resulting in a material adjustment to the carrying amounts of NextTrip’s assets and liabilities within the next financial year are referenced in the notes to the financial statements as follows:
Current wording
Information about key assumptions and estimation uncertainty that has a significant risk of resulting in a material adjustment to the carrying amounts of our assets and liabilities within the next financial year is referenced in the notes to the financial statements as follows:
Previous wording
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable.
Current wording
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for credit losses is the Company’s best estimate of the amount of probable losses in its existing accounts receivable.
Previous wording
The Company considers trade accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when that determination is made.
Current wording
The Company considers trade accounts receivable to be fully collectible; accordingly, no allowance for credit losses is required. If amounts become uncollectible, they will be charged to operations when that determination is made.
Previous wording
Trade accounts receivable balances as of February 29, 2024 and February 28, 2023, were $34,082 and $0, respectively.
Current wording
Trade accounts receivable balances as of February 28, 2025 and February 29, 2024, were $22,567 and $34,082, respectively.
Previous wording
Receivables from NextPlay under the promissory note as described inNOTE 1 – Business Description and Going Concern were $2,567,665 and $1,933,908 respectively. Management has determined that, since NextPlay is in default under the terms of the promissory note, collectability of the entire related party receivable as of February 29, 2024 is uncertain, and has therefore established an allowance for doubtful accounts of $1,567,665. As of February 28, 2023, no allowance for doubtful accounts was established.
Current wording
Receivables from NextPlay under the promissory note, as described in Note 1 – Business Description and Going Concern in the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Report, were $0 and $1,000,000 at February 28, 2025 and February 29, 2024, respectively. Management has determined that, since NextPlay is in involuntary bankruptcy proceedings and is in default under the terms of the promissory note, collectability of the entire related party receivable as of February 28, 2025 is uncertain, and has therefore established an allowance for credit losses of $2,567,665.
Previous wording
NextTrip measures separately acquired intangible assets at cost less accumulated amortization and impairment losses. NextTrip recognizes internally developed intangible assets when it has determined that the completion of such is technically feasible, and it has sufficient resources to complete the development. Subsequent expenditures are capitalized when they increase the future economic benefits of the associated asset. All other expenditures are recorded in profit or loss as incurred.
Current wording
The Company measures separately acquired intangible assets at cost less accumulated amortization and impairment losses. The Company recognizes internally developed intangible assets when it has determined that the completion of such is technically feasible, and it has sufficient resources to complete the development. Subsequent expenditures are capitalized when they increase the future economic benefits of the associated asset. All other expenditures are recorded in profit or loss as incurred.
Previous wording
NextTrip assesses whether the life of intangible assets is finite or indefinite. NextTrip reviews the amortization method and period of use of its intangible assets at least annually. Changes in the expected useful life or period of consumption of future economic benefits associated with the asset are accounted for prospectively by changing the amortization method or period as a change in accounting estimates in profit or loss. NextTrip has assessed the useful life of its trademarks as indefinite.
Current wording
The Company assesses whether the life of intangible assets is finite or indefinite. The Company reviews the amortization method and period of use of its intangible assets at least annually. Changes in the expected useful life or period of consumption of future economic benefits associated with the asset are accounted for prospectively by changing the amortization method or period as a change in accounting estimates in profit or loss. The Company has assessed the useful life of its trademarks as indefinite.
Previous wording
The estimated useful lives for NextTrip’s finite life intangible assets are as follows:
Current wording
The estimated useful lives for the Company’s finite life intangible assets are as follows:
Previous wording
NextTrip capitalizes internal software development costs subsequent to establishing technological feasibility of a software application in accordance with guidelines established by “ASC 985-20-25” Accounting for the Costs of Software to Be Sold, Leased, or Otherwise Marketed, requiring certain software development costs to be capitalized upon the establishment of technological feasibility. The establishment of technological feasibility and the ongoing assessment of the recoverability of these costs require considerable judgment by management with respect to certain external factors such as anticipated future revenue, estimated economic life, and changes in software and hardware technologies. Amortization of the capitalized software development costs begins when the product is available for general release to customers. Capitalized costs are amortized based on the straight-line method over the remaining estimated economic life of the product.
Current wording
The Company capitalizes internal software development costs subsequent to establishing technological feasibility of a software application in accordance with guidelines established by “ASC 985-20-25” Accounting for the Costs of Software to Be Sold, Leased, or Otherwise Marketed, requiring certain software development costs to be capitalized upon the establishment of technological feasibility. The establishment of technological feasibility and the ongoing assessment of the recoverability of these costs require considerable judgment by management with respect to certain external factors such as anticipated future revenue, estimated economic life, and changes in software and hardware technologies. Amortization of the capitalized software development costs begins when the product is available for general release to customers. Capitalized costs are amortized based on the straight-line method over the remaining estimated economic life of the product.
Previous wording
In accordance with ASC 350-30-65 “Goodwill and Other Intangible Assets”, NextTrip assesses the impairment of identifiable intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors it considers important, which could trigger an impairment review include the following:
Current wording
In accordance with ASC 350-30-65 “Goodwill and Other Intangible Assets”, the Company assesses the impairment of identifiable intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors it considers important, which could trigger an impairment review include the following:
Previous wording
When NextTrip determines that the carrying value of an intangible asset may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, NextTrip records an impairment charge. NextTrip measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent to the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. Intangible assets that have finite useful lives are amortized over their useful lives.
Current wording
When the Company determines that the carrying value of an intangible asset may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent to the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. Intangible assets that have finite useful lives are amortized over their useful lives.
Previous wording
NextTrip recognizes revenue in accordance with ASC 606 which involves identifying the contracts with customers, identifying performance obligations in the contracts, determining transactions price, allocating transaction price to the performance obligation, and recognizing revenue when the performance obligation is satisfied.
Current wording
The Company recognizes revenue in accordance with ASC 606 “Revenue from Contracts with Customers,” which involves identifying the contracts with customers, identifying performance obligations in the contracts, determining transactions price, allocating transaction price to the performance obligation, and recognizing revenue when the performance obligation is satisfied.
Previous wording
NextTrip 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 NextTrip are recorded gross (the amount paid to NextTrip by the customer is shown as revenue and the cost of providing the respective travel package is recorded to cost of revenues).
Current wording
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).
Previous wording
NextTrip generates revenues from sales directly to customers as well as through other distribution channels of tours and activities at destinations throughout the world.
Current wording
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.
Previous wording
NextTrip controls the specified travel product before it is transferred to the customer and is therefore a principal, including but not limited to, the following:
Current wording
The Company controls the specified travel product before it is transferred to the customer and is therefore a principal, including but not limited to, the following:
Previous wording
During the year ended February 29, 2024, NextTrip recognized revenue of $458,752 as compared to $382,832 in the same period in 2023, an increase of $75,920, or 19.8%. The increase was a result of the continued implementation of the company’s booking engine.
Current wording
During the year ended February 28, 2025, we recognized revenue of $501,423 as compared to $458,752 in the same period in 2024, an increase of $42,671, or 9%. The increase was a result of the continued implementation of our booking engine and expanded product offerings.
Previous wording
Cost of revenue for the year ended February 29, 2024, was $397,532 as compared to $354,921 for the same period in 2023, an increase of $42,611, or 12%. The increase was attributable to the increase in revenue in the year ended February 29, 2024, as compared to the same period in 2023.
Current wording
Cost of revenue for the year ended February 28, 2025, was $498,121 as compared to $397,532 for the same period in 2024, an increase of $100,589, or 25%. The increase was attributable to the increase in revenue in the year ended February 28, 2025, as compared to the same period in 2024.
Previous wording
Operating expenses totaled $5,740,577 for the year ended February 29, 2024, versus $4,979,766 for the year ended February 28, 2023. The increase of $760,811, or 15.3% was due to an increase in professional service fees of $806,076, an increase in depreciation and amortization of $761,524, an increase in other operating expenses of $91,838, stock based compensation of $116,512, and organization costs of $25,000. Partially offsetting these increases were a decrease in salaries and benefits of $519,809, a decrease in general and administrative expenses of $57,455, a decrease in sales and marketing expenses of $222,887, and a decrease in technology expenses of $239,988.
Current wording
Operating expenses totaled $7,416,731 for the year ended February 28, 2025, versus $5,740,577 for the year ended February 29, 2024. The increase of $1,676,154, or 29%, was due to an increase in Salaries and Benefits of $1,026,176, an increase in technology expenses of $531,866, an increase in professional service fees of $809,973, an increase in organization costs of $188,613, and an increase in other operating expenses of $160,539. Partially offsetting these increases were a decrease in stock based compensation expenses of $48,638, a decrease in general and administrative expenses of $56,765, a decrease in sales and marketing expenses of $177,084, and a decrease in depreciation and amortization of $755,526.
Previous wording
The loss of $1,567,665 on the promissory note receivable for the year ended February 29, 2024 is attributable to the establishment of a reserve taken on the total outstanding balance due from NextPlay of $2,567,665. Management has determined that, since NextPlay is in default under the terms of its promissory note, collectability of the entire related party receivable as of February 29, 2024 is uncertain. As of February 28, 2023, no allowance for doubtful accounts was established.
Current wording
The loss of $1,000,000 on the NextPlay promissory note receivable for the year ended February 28, 2025 is attributable to reserving the remaining balance on the outstanding promissory note receivable from NextPlay. Management has determined that, since NextPlay is in involuntary bankruptcy proceedings and is also in default on the note repayment, collectability of the related party receivable as of February 28, 2025 is uncertain.
Previous wording
Other expenses totaled $156,522 for the year ended February 29, 2024, as compared to $64,684 for the year ended February 28, 2023. The increase of $91,838, or 142.0% was primarily due to an increase in D&O insurance premiums.
Current wording
Other expenses totaled $317,061 for the year ended February 28, 2025, as compared to $156,522 for the year ended February 29, 2024. The increase of $160,539, or 103%, was primarily due to an increase in D&O insurance premiums of $170,924, partially offset by a $10,386 decrease in bank service charges as a result of a change in our merchant processor and lower processing rates.
Previous wording
In the year ended February 29, 2024, the net loss from continuing operations totaled $6,656,837 as compared to a net loss from continuing operations of $5,033,496 for the year ended February 28, 2023. The operating loss component increased by $727,502 in 2024, and the other loss component increased by $895,839.
Current wording
During the year ended February 28, 2025, the net loss from continuing operations totaled $10,121,038 as compared to a net loss from continuing operations of $6,656,837 for the year ended February 29, 2024. The operating loss component increased by $1,734,072 in 2025, and the other loss component increased by $1,730,129.
Previous wording
The net loss applicable to common shareholders totaled $7,339.276 for the year ended February 29, 2024, as compared to $5,033,496 for the year ended February 28, 2023. Preferred dividends were $7,125 in 2024 and $0 in 2023.
Current wording
The net loss applicable to common shareholders totaled $10,198,684 for the year ended February 28, 2025, as compared to $7,339,276 for the year ended February 29, 2024. Preferred dividends were $78,600 in 2025 and $7,125 in 2024.
Previous wording
Due to uncertainties regarding our ability to meet our current and future operating and capital expenses, there is substantial doubt about our ability to continue as a going concern for 12 months from the date of the filing of this Annual Report, and the report of our registered independent public accounting firm on our financial statements as of and for the year ended February 29, 2024 included in Item 15 of this Annual Report contains a going concern qualification.
Current wording
Due to uncertainties regarding our ability to meet our current and future operating and capital expenses, there is substantial doubt about our ability to continue as a going concern for 12 months from the date of filing of Annual Report, and the report of our registered independent public accounting firm on our financial statements as of and for the year ended February 28, 2025 included in Item 15 of this Report contains a going concern qualification.
Previous wording
As of February 29, 2024, NextTrip had $323,805 in cash, an accumulated deficit of $24,151,139 and a working capital deficit of $245,005 compared to $282,475 in cash, an accumulated deficit of $16,811,863 and a working capital deficit of $2,310,654 as of February 28, 2023.
Current wording
As of February 28, 2025, we had $1,062,367 in cash, an accumulated deficit of $34,349,823 and a working capital deficit of $105,577, compared to $323,805 in cash, an accumulated deficit of $24,151,139 and a working capital deficit of $262,005 as of February 29, 2024.
Previous wording
To date, NextTrip has financed its operations primarily through revenue generated from operations, the issuance of convertible debt, advances from related parties, and private placements of its securities.
Current wording
Given the lack of significant revenue since inception, NextTrip has financed its operations primarily through the issuance of short-term promissory notes, advances from related parties, and private placements of its securities.
Previous wording
NextTrip will need to raise additional funds through equity or debt financings or other means to support its on-going operations, increase market penetration of its products, expand the marketing and development of its travel and technology driven products, provide capital expenditures for additional equipment and development costs, payment obligations, and systems for managing the business including covering other operating costs and maintaining compliance with NASDAQ listing requirements until planned revenue streams are fully implemented and begin to offset the Company’s operating costs. The Company estimates that it will require a minimum of $5.5 million to continue operations for the next twelve months.
Current wording
We will need to raise additional funds through equity or debt financings or other means to support our on-going operations, increase market penetration of our products, expand the marketing and development of our travel and technology driven products, provide capital expenditures for additional equipment and development costs, payment obligations, and systems for managing the business including covering other operating costs and maintaining compliance with Nasdaq listing requirements until planned revenue streams are fully implemented and begin to offset the our operating costs. The Company estimates that it will require a minimum of $5.5 million to continue operations for the next twelve months.
Previous wording
Net cash used in operating activities from continuing operations during the year ended February 29, 2024, was $5,056,095 as compared to $3,792,600 during the same period in 2023, an increase of $1,263,495 or 33.3%.
Current wording
Net cash used in operating activities from continuing operations during the year ended February 28, 2025, was $5,088,498 as compared to $5,056,095 during the same period in 2024, an increase of $32,403, or 0.6%.
Previous wording
During the year ended February 28, 2023, the net cash used in operating activities was the result of a net loss of $5,033,496, partially offset by changes in working capital of $521,490 and non-cash expenses of $719,406, primarily related to depreciation and amortization. Changes in working capital were driven by a decrease in accounts receivable of $5,503, a decrease in prepaid expenses of $48,796, an increase in accounts payable and accrued expenses of $533,193, a decrease in deferred revenue of $46,855 and an increase in right of use asset in the amount of $18,697.
Current wording
During the year ended February 28, 2025, the net cash used in operating activities from continuing operations was the result of a net loss of $10,128,428, partially offset by changes in working capital of $1,537,714 and non-cash expenses of $3,502,216. The non-cash expenses were primarily comprised of depreciation and amortization of $713,236, stock-based compensation of $67,874, amortization of prepaid expenses of $236,112, amortization of debt discount of $342,935, a loss on debt extinguishment of $1,134,579, and the loss of $1,000,000 on the NextPlay promissory note receivable. Changes in working capital were driven by a decrease in accounts receivable of $11,515, a decrease in prepaid expenses of $159,343, a decrease in security deposits of $12,000, and an increase in accounts payable and accrued expenses of $1,397,007, partially offset by a decrease in deferred revenue of $42,151.
Previous wording
As a result, total net cash used in operating activities increased by $1,938,809 during the year ended February 29, 2024, to $5,731,409 as compared to $3,792,600 during the same period in 2023, an increase of 51.1%.
Current wording
As a result, total net cash used in operating activities decreased by $651,255 during the year ended February 28, 2025, to $5,080,154 as compared to $5,731,409 during the same period in 2024, a decrease of 11.4%.
Previous wording
During the year ended February 29, 2024, the net cash used in operating activities from continuing operations was the result of a net loss of $6,656,837, partially offset by changes in working capital of $1,400,025 and non-cash expenses of $3,000,767. The non-cash expenses were primarily comprised of depreciation and amortization of $1,468,762 and the loss of $1,567,665 on the related party receivable. Changes in working capital were driven by an increase in accounts receivable of $662,939, an increase in prepaid expenses of $281,506, an increase in security deposits of $27,167, and a decrease in accounts payable and accrued expenses of $531,367, partially offset by an increase in deferred revenue of $102,954.
Current wording
During the year ended February 29, 2024, the net cash used in operating activities from continuing operations was the result of a net loss of $6,656,837, partially offset by changes in working capital of $1,400,025 and non-cash expenses of $3,000,767. The non-cash expenses were primarily comprised of depreciation and amortization of $1,468,762 and the loss of $1,567,665 on the NextPlay promissory note receivable. Changes in working capital were driven by an increase in accounts receivable of $662,939, an increase in prepaid expenses of $281,506, an increase in security deposits of $27,167, and a decrease in accounts payable and accrued expenses of $531,367, partially offset by an increase in deferred revenue of $102,954.
Previous wording
Net Cash Provided (Used) in Investing Activities
Current wording
Net Cash Provided by/(Used in) Investing Activities
Previous wording
Net cash provided by investing activities during the year ended February 29, 2024, was $980,936, which compares to net cash used by investing activities of $4,290,930 during the same period of 2023, an increase of $5,271,865. The primary causes for the increase resulted from the reverse acquisition of Sigma, which provided cash of $417,122, and the subsequent sale of Sigma’s legacy assets to a third party, which generated an additional $1,589,241 in cash. Further contributing to the increase were decreases in capitalized software development costs of $1,337,919 and a decrease in the related party promissory note of $1,933,908. These increases were partially offset by an increase in the purchases of equipment of $6,325.
Current wording
Net cash used in investing activities during the year ended February 28, 2025, was $(1,033,751), which compares to net cash provided by investing activities of $980,936 during the same period of 2024, an increase of $2,014,687. The primary uses of cash in investing activities for the twelve months ended February 28, 2025 were $500,000 used to purchase the 49% interest in FSA, and capitalized software development costs of $534,751. For the twelve months ended February 29, 2024, cash provided by investing activities was primarily a result of the reverse acquisition, which provided cash of $417,122, and the subsequent sale of Sigma’s legacy assets to a third party, which generated an additional $1,589,241 in cash, partially offset by capitalized software development costs of $1,016,175.
Previous wording
NextTrip raised $4,791,804 in net proceeds during the year ended February 29, 2024, consisting of $735,037 from the issuance of convertible notes, $1,905,970 from the issuance of common shares, $1,603,500 from the issuance of preferred shares, and $547,277 from related party advances. For the year ended February 28, 2023, the Company raised $8,134,955 in net proceeds consisting of advances to the company by related parties of $4,901,452 and proceeds from the issuance of convertible notes of $3,233,503.
Current wording
We raised $6,852,467 in net proceeds during the year ended February 28, 2025, consisting of $1,967,224 from the issuance of short-term promissory notes, $2,450,000 from the issuance of preferred shares, $2,118,249 from related party advances, and $316,994 from the exercise of warrants. We raised$4,791,804 in net proceeds during the year ended February 29, 2024, consisting of $735,057 from the issuance of convertible notes, $1,905,970 from the issuance of common shares, $1,603,500 from the issuance of preferred shares, and $547,277 from related party advances.