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Item 1A. Risk Factors

2024-09-04 compared with 2023-03-30 · 568 added, 283 removed, 158 unchanged (84% of the section changed)

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with investors and others.

Any or all of our statements in this Report and in any other public statements we make may turn out

Any or all of our statements in this Report and in any other public statements we make may turn out to be

They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.

The factors mentioned in

the discussion below will be important in determining future results.

Consequently, actual future results may vary materially from those

anticipated in this Report or our other public statements.

The occurrence of any of the events or developments described below

could harm our financial condition, results of operations, business and prospects.

In such an event, the market price of our securities

could decline.

Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may have similar

adverse effects on us.

The factors mentioned in the discussion

below will be important in determining future results.

Consequently, actual future results may vary materially from those anticipated

in this Report or our other public statements.

The occurrence of any of the events or developments described below could harm our financial

condition, results of operations, business and prospects.

In such an event, the market price of our securities could decline.

risks and uncertainties not presently known to us or that we currently deem immaterial also may have similar adverse effects on us.

Related to Our Business

We will require additional financing to continue

our operations, and there is substantial doubt regarding our ability to continue as a going concern.

As of December 31, 2022, we had

cash of $2,845,931.

Our existing cash on hand and anticipated revenues are sufficient to fund our remaining anticipated operating costs and capital expenditure

requirements only through May 2023.

We will need to raise additional financings to fund our operations, maintain compliance with the NASDAQ

listing requirements and implement our business plan.

There is no assurance as to the amount and availability of any required future financing

or the terms thereof.

Such financing, if in the form of equity, may be highly dilutive to our existing stockholders and may otherwise

include onerous terms.

If in the form of debt, such financing may include covenants and repayment obligations which may be difficult to

meet and that could adversely affect our business operations.

We have no current understanding or arrangement to obtain any additional

To the extent that funds are not available to us, we may be required to delay, limit, or terminate our business operations

and may lose our NASDAQ listing.

In light of the foregoing,

there is substantial doubt our ability to continue as a going concern, and the report of our registered independent public accounting firm on our financial statements as of and for the year ended December 31, 2022 contains a going concern

qualification.

revenue is derived from the global travel industry, and a prolonged or substantial decrease in global travel, particularly air travel,

could adversely affect our operating results.

revenue is derived from the global travel industry and would be significantly impacted by declines in, or disruptions to, travel activity,

particularly air travel.

Global factors over which we have no control, but which could impact our clients’ willingness to travel

and, depending on the scope and duration, cause a significant decline in travel volumes include, among other things:

widespread health concerns, epidemics or pandemics, such as the COVID-19 pandemic, the Zika virus, H1N1 influenza, the Ebola virus, avian

flu, SARS or any other serious contagious diseases;

global security concerns caused by terrorist attacks, the threat of terrorist attacks, or the precautions taken in anticipation of such

attacks, including elevated threat warnings or selective cancellation or redirection of travel;

cyber-terrorism, political unrest, the outbreak of hostilities or escalation or worsening of existing hostilities or war, such as Russia’s

invasion of Ukraine and the military conflict in Israel, resulting sanctions imposed by the U.S.

and other countries and retaliatory

actions taken by sanctioned countries in response to such sanctions;

natural disasters or severe weather conditions, such as hurricanes, flooding and earthquakes;

climate change-related impact to travel destinations, such as extreme weather, natural disasters and disruptions, and actions taken by

governments, businesses and supplier partners to combat climate change;

the occurrence of travel-related accidents or the grounding of aircraft due to safety concerns;

the impact of macroeconomic conditions (including inflation) and labor shortages on the cost and availability of airline travel;

adverse changes in visa and immigration policies or the imposition of travel restrictions or more restrictive security procedures.

decrease in demand for consumer or business travel could materially and adversely affect our business, financial condition and results

of operations.

need additional capital, which may not be available on commercially acceptable terms, if at all, which raises questions about our ability

to continue as a going concern.

of February 29, 2024, we had $5,088,842 in total assets, $1,960,813 in total liabilities, negative working capital of $245,005 and a

total accumulated deficit of $24,151,139.

We had a net loss of $7,339,276 for the fiscal year ended February 29, 2024 and $5,033,496

for the fiscal year ended February 28, 2023.

are subject to all the substantial risks inherent in the development of a new business enterprise within an extremely competitive industry.

Due to the absence of a long-standing operating history and the emerging nature of the markets in which it competes, we anticipate operating

losses until we can successfully implement our business strategy, which includes all associated revenue streams.

Our revenue model is

new and evolving, and we cannot be certain that it will be successful.

The potential profitability of this business model is unproven.

We may never achieve profitable operations or generate significant revenues.

Our future operating results depend on many factors, including

demand for our products, the level of competition, and the ability of our officers to manage our business and growth.

Additional development

expenses may delay or negatively impact our ability to generate profits.

Accordingly, we cannot assure you that our business model will

be successful or that we can sustain revenue growth, achieve or sustain profitability, or continue as a going concern.

Company believes that, in the aggregate, it could require several millions of dollars to support and expand the marketing and development

of its products, repay debt obligations, provide capital expenditures for additional equipment and development costs, payment obligations,

office space and systems for managing the business, and cover other operating costs until its planned revenue streams from all products

are fully implemented and begin to offset its operating costs.

We estimate that we will need to raise a minimum of $5.5 million in net proceeds to continue operations for the next

twelve months.

the event the Company is unable to raise adequate funding in the future for its operations and to pay its outstanding debt obligations,

the Company may be forced to scale back its business plan and/or liquidate some or all of its assets or may be forced to seek bankruptcy

light of the foregoing, there is substantial doubt our ability to continue as a going concern, and the report of our registered independent

public accounting firm on our financial statements as of and for the year ended February 29, 2024 contains a going concern qualification.

are not profitable and may never become profitable.

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losses for the foreseeable future.

Our net loss applicable to common stockholders for the years ended December 31, 2022 and 2021 was

$8,749,304 and $7,488,172, respectively.

As of December 31, 2022, our accumulated deficit was $49,342,484.

There is no assurance that

any revenues we generate will be sufficient for us to become profitable or to maintain profitability.

Our revenues for the years ended

December 31, 2022 and December 31, 2021 were $630,428 and $1,651,765, respectively, and our operating expenses for those periods were

$9,029,502 and $9,571,185, respectively.

Our net loss applicable to common stockholders for the years ended February 29, 2024 and February

28, 2023 was $7,339,276 and $5,033,496, respectively.

As of February 29, 2024, our accumulated deficit was $24,151,139.

There is no assurance

that any revenues we generate will be sufficient for us to become profitable or to maintain profitability.

Our revenues for the years

ended February 29, 2024 and February 28, 2023 were $458,752 and $382,832, respectively, and our operating expenses for those periods

were $5,740,577 and $4,979,766, respectively.

Our current revenues are not sufficient to fund our operations.

We cannot predict when, if ever,

we might achieve profitability and we are not certain that we will be able to sustain profitability, if achieved.

If we fail to achieve

or maintain profitability, the market price of our securities is likely to be adversely affected.

operating history makes evaluation of our business difficult.

We are continuing to develop our

technologies and to implement our business plan.

Our ability to implement a successful business plan remains unproven, and there is no

assurance that we will ever generate sufficient revenues to sustain our business.

Our operating history, together with the other risks

discussed in this “Risk Factors” section, may make it difficult for prospective investors and others to evaluate our business.

face the risks normally associated with a new business.

face all of the risks inherent in a business based upon emerging technologies, including the expenses, difficulties, complications and delays frequently

encountered in connection with conducting new operations and efforts to develop and commercialize technologies.

These uncertainties

include developing our technologies and our brand name, raising capital to meet our working capital requirements, and expanding our

customer base, among others.

If we are not effective in addressing these risks, we will not be able to achieve profitability in the

future, and we may not have adequate working capital to meet our obligations as they become due.

business may be adversely affected by a global economic downturn.

economic downturn generally could cause a drop in government spending and business investment, which could have a material adverse effect

on our business.

Further, as a result of the current global economic and geopolitical situation, there may be a disruption or delay in

performance by our third-party contractors and suppliers.

If such third parties are unable to adequately satisfy their contractual commitments

to us in a timely manner, our business could be adversely affected.

could incur significant damages if we are unable to adequately discharge our contractual obligations.

failure to comply with contract requirements or to meet our clients’ performance expectations on a contract could materially and

adversely affect our financial performance and our reputation.

This, in turn, would impact our ability to compete for new clients and

Our failure to meet contractual obligations could also result in substantial actual and consequential damages under the terms

of such contracts.

In addition, some of our contracts require us to indemnify clients for our failure to meet performance standards and/or

contain liquidated damages provisions and financial penalties related to performance failures.

Although we maintain liability insurance,

the policy limits may not be adequate to provide protection against all such potential liabilities.

of our clients may terminate our contracts prior to completion, which could result in revenue shortfalls and reduce profitability or

cause losses on contracts.

of our contracts with clients contain initial or base periods of one or more years, as well as option periods typically covering more

than one-half of the contract’s initial duration.

However, such clients are under no obligation to exercise the option to extend

the contract term.

The profitability of some of our contracts could be adversely impacted if such options are not exercised and the contract

term is not extended accordingly.

Additionally, our contracts contain provisions permitting a client to terminate the contract on short

notice, with or without cause.

The unexpected termination of significant contracts could result in significant revenue shortfalls.

revenue shortfalls occur and are not offset by corresponding reductions in expenses, our business could be adversely affected.

anticipate if, when or to what extent a client might terminate its contracts with us.

may not be able to effectively control and manage our growth, which would negatively impact our operations.

have operated our current line of business for approximately eleven years, and we expect to grow in the future as our business develops

and becomes further established.

If our business grows as we anticipate, it will be necessary for us to manage our expansion in an orderly

Any significant growth in our activities or in the market for our services will require extension of our managerial, operational,

marketing and other resources.

Future growth will also impose significant additional responsibilities upon the members of management

to identify, recruit, maintain, integrate, and motivate new employees.

Our failure to manage growth effectively may lead to operational

inefficiencies that will have a negative effect on our profitability.

Additionally, if our growth comes at the expense of providing quality

service and generating reasonable profits, our ability to successfully bid for contracts and our profitability will be adversely affected.

We cannot assure investors that we will be able to effectively manage any future growth we may experience.

We cannot predict when,

if ever, we might achieve profitability and we are not certain that we will be able to sustain profitability, if achieved.

to achieve or maintain profitability, the market price of our securities is likely to be adversely affected.

have outstanding indebtedness, which could adversely affect our business and financial condition.

relating to its indebtedness include:

our vulnerability to general adverse economic and industry conditions;

us to dedicate a portion of our cash flow from operations to principal and interest payments on our indebtedness, thereby reducing

the availability of cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate

it more difficult for us to optimally capitalize and manage the cash flow for our businesses;

our flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate;

placing us at a competitive disadvantage compared to our competitors that have less debt;

our ability to borrow additional funds or to borrow funds at rates or on other terms that we find acceptable.

distributors are unable to drive customers to our websites and/or we are unable to drive visitors to our websites, from search engines

or otherwise, this could negatively impact transactions on the websites of our distributors as well as our own websites and consequently

cause our travel revenue to decrease.

visitors find the distributors and NextTrip’s websites by searching for vacation information through Internet search engines.

critical factor in attracting visitors to NextTrip’s websites, and those of our distributors, is how prominently our distributors

and NextTrip are displayed in response to search queries.

Accordingly, we utilize search engine marketing, or SEM, as a means to provide

a significant portion of our visitor acquisition.

SEM includes both paid visitor acquisition (on a cost-per-click basis) and unpaid visitor

acquisition, which is often referred to as organic search.

plan to employ search engine optimization, or SEO, to acquire visitors.

SEO involves developing NextTrip’s websites in order to

rank highly in relevant search queries.

In addition to SEM and SEO, we may also utilize other forms of marketing to drive visitors to

our websites, including branded search, display advertising and email marketing.

various search engine providers, such as Google and Bing, employ proprietary algorithms and other methods for determining which websites

are displayed for a given search query and how highly websites rank.

Search engine providers may change these methods in a way that may

negatively affect the number of visitors to our distributors’ websites as well as our own websites and may do so without public

announcement or detailed explanation.

Therefore, the success of our SEO and SEM strategy depends, in part, on our ability to anticipate

and respond to such changes in a timely and effective manner.

addition, websites must comply with search engine guidelines and policies.

These guidelines and policies are complex and may change at

If we or our distributors fail to follow such guidelines and policies properly, the search engine may cause our content to

rank lower in search results or could remove the content altogether.

If we or our distributors fail to understand and comply with these

guidelines and policies and ensure their websites’ compliance, our SEO and SEM strategy may not be successful.

changes in, or interpretations of, government regulations or taxation of the evolving product offerings, Internet and e-commerce industries

could harm our travel division operating results.

have contracted for products in markets throughout the world, in jurisdictions which have various regulatory and taxation requirements

that can affect our travel division operations or regulate the activity of travel suppliers.

with laws and regulations of different jurisdictions imposing different standards and requirements is very burdensome because each region

has different regulations with respect to licensing and other requirements.

Our online marketplaces are accessible by travelers in many

states and foreign jurisdictions.

Compliance requirements that vary significantly from jurisdiction to jurisdiction impose added costs

and increased liabilities for compliance deficiencies.

In addition, laws or regulations that may harm our business could be adopted,

or interpreted in a manner that affects our activities, including but not limited to the regulation of personal and consumer information

and real estate licensing requirements.

Violations or new interpretations of these laws or regulations may result in penalties, negatively

impact our operations and damage our reputation and business.

addition, many of the fundamental statutes and regulations that impose taxes or other obligations on travel and lodging companies were

established before the growth of the Internet and e-commerce, which creates a risk of these laws being used, in ways not originally intended,

that could burden travel suppliers or otherwise harm our business.

These and other similar new and newly interpreted regulations

could increase costs for, or otherwise discourage, suppliers from partnering with NextTrip, which could harm its

business and operating results.

as we expand or change the products and services that we offer or the methods by which we offer them, we may become subject to additional

legal regulations, tax requirements or other risks.

Regulators may seek to impose regulations and requirements on us even if we utilize

third parties to offer the products or services.

These regulations and requirements may apply to payment processing, insurance products

or the various other products and services we may now or in the future offer or facilitate through our marketplace.

Whether we comply

with or challenge these additional regulations, our costs may increase, and our business may otherwise be harmed.

we are not able to maintain and enhance our NextTrip brand and the brands associated with each of our websites, our reputation and business

is important for NextTrip to maintain and enhance its brand identity in order to attract and retain travel suppliers and customers.

The successful promotion of our brands will depend largely on our marketing and public relations efforts.

We expect that

the promotion of our brands will require us to make substantial investments, and, as its market becomes more competitive, these branding

initiatives may become increasingly difficult and expensive.

In addition, we may not be able to successfully build our NextTrip brand

identity without losing value associated with, or decreasing the effectiveness of, our other brand identities.

If we do not successfully

maintain and enhance our brands, we could lose traveler traffic, which could, in turn, cause suppliers to discontinue their distribution with us.

In addition, our brand promotion activities may not be successful or may not yield revenue

sufficient to offset their cost, which could adversely affect our reputation and business.

long-term success depends, in part, on our ability to expand traveler bases outside of the United States and, as a result, our business

is susceptible to risks associated with international operations.

have limited operating and e-commerce experience in many foreign jurisdictions and are making significant investments to build our international

We plan to continue our efforts to expand globally, including potentially acquiring international businesses and conducting

business in jurisdictions where we do not currently operate.

Managing a global organization is difficult, time-consuming and expensive

and any international expansion efforts that we undertake may not be profitable in the near or long term or otherwise be successful.

In addition, conducting international operations subjects the Company to risks that include:

cost and resources required to localize its services, which requires the translation of our websites and their adaptation for local

practices and legal and regulatory requirements;

the products and services we provide in foreign jurisdictions, as needed, to better address the needs of local owners, managers,

distributors and travelers, and the threats of local competitors;

subject to foreign laws and regulations, including those laws governing Internet activities,

email messaging, collection and use of personal information, ownership of intellectual property,

taxation and other activities important to our online business practices, which may be less

developed, less predictable, more restrictive, and less familiar, and which may adversely

affect financial results in certain regions;

with companies that understand the local market better than we do or who have pre-existing relationships with suppliers,

distributors and travelers in those markets;

uncertainty regarding our liability for the transactions and content on our websites, including online bookings, property listings

and other content provided by suppliers, including uncertainty resulting from unique local laws or a lack of clear

precedent of applicable law;

of familiarity with and the burden of complying with a wide variety of other foreign laws, legal standards and foreign regulatory

requirements, including invoicing, data collection and storage, financial reporting and tax compliance requirements, which are subject

to unexpected changes;

and business practices that favor local competitors or prohibit or limit foreign ownership of certain businesses;

associated with joint venture relationships and minority investments;

to variations in foreign payment forms;

in managing and staffing international operations and establishing or maintaining operational efficiencies;

in establishing and maintaining adequate internal controls and security over our data and systems;

exchange restrictions and fluctuations in currency exchange rates;

adverse tax consequences, which may be difficult to predict, including the complexities of foreign value added tax systems and restrictions

on the repatriation of earnings;

social and economic instability abroad, war, terrorist attacks and security concerns in general;

potential failure of financial institutions internationally;

or varied protection for intellectual property rights in some countries;

telecommunications and Internet service provider costs.

in international markets also requires significant management attention and financial resources.

We cannot guarantee that our international

expansion efforts in any or multiple territories will be successful.

The investment and additional resources required to establish operations

and manage growth in other countries may not produce desired levels of revenue or profitability and could instead result in increased

market in which we participate is highly competitive, and we may be unable to compete successfully with our current or future competitors.

market to provide listing, search and marketing services for the travel industry is very competitive and dominated by key players, such

as Expedia and Booking.com.

In addition, the barriers to entry are low and new competitors may enter.

All of the services that we plan

to provide to travelers are provided separately or in combination by current or potential competitors.

Our competitors may adopt aspects

of our business model, which could reduce our ability to differentiate our services.

Additionally, current or new competitors may introduce

new business models or services that we may need to adopt or otherwise adapt to in order to compete, which could reduce our ability to

differentiate our business or services from those of our competitors.

addition, most of our current or potential competitors are larger and have more resources than we do.

Many of our current and potential

competitors enjoy substantial competitive advantages, such as greater name recognition in their markets, longer operating histories and

larger marketing budgets, as well as substantially greater financial, technical and other resources.

In addition, our current or potential

competitors may have access to larger traveler bases.

As a result, our competitors may be able to respond more quickly and effectively

than we can to new or changing opportunities, technologies, standards or distribution or traveler requirements.

For all of these reasons,

the Company may not be able to compete successfully against its current and future competitors.

we are unable to introduce new or upgraded products, services or features that distributors, travelers or agents recognize as valuable,

we may fail to:

(i) drive additional travelers to our websites, (ii) retain existing distributors, and/or (iii) attract new distributors.

Our efforts to develop new and upgraded services and products could require us to incur significant costs.

order to attract travelers to our distributors, as well as our own online marketplace while retaining, and attracting new suppliers, we will need to continue to invest in the development of new products, services and features that both

add value for travelers and suppliers and differentiate us from our competitors.

The success of new products, services and features depends

on several factors, including the timely completion, introduction and market acceptance of the product, service or feature.

If travelers,

or suppliers do not recognize the value of our new services or features, they may choose not to utilize our products or make their inventory

available through our channels.

to develop and deliver these new or upgraded products, services or features involves inherent hazards and difficulties, and is costly.

Efforts to enhance and improve the ease of use, responsiveness, functionality and features of our existing websites have inherent risks,

and we may not be able to manage these product developments and enhancements successfully.

We may not succeed in developing new or upgraded

products, services or features or new or upgraded products, services or features may not work as intended or provide value.

some new or upgraded products, services or features may be difficult for us to market and may also involve unfavorable pricing.

if we succeed, we cannot guarantee that our suppliers will respond favorably.

addition to developing our own improvements, we may choose to license or otherwise integrate applications, content and data from third

The introduction of these improvements imposes costs on the Company and creates a risk that it may be unable to continue to

access these technologies and content on commercially reasonable terms, or at all.

In the event we fail to develop new or upgraded products,

services or features, the demand for our services and ultimately our results of operations may be adversely affected.

are exposed to fluctuations in currency exchange rates.

we plan to conduct a significant portion of our business outside the United States, but report our results in U.S.

dollars, we face exposure

to adverse movements in currency exchange rates, which may cause our revenue and operating results to differ materially from expectations.

In addition, fluctuation in our mix of U.S.

and foreign currency denominated transactions may contribute to this effect as exchange rates

Moreover, as a result of these exchange rate fluctuations, revenue, cost of revenue, operating expenses and other operating results

may differ materially from expectations when translated from the local currency into U.S.

dollars upon consolidation.

For example, if

dollar strengthens relative to foreign currencies our non-U.S.

revenue would be adversely affected when translated into U.S.

Conversely, a decline in the U.S.

dollar relative to foreign currencies would increase our non-U.S.

revenue when translated

We may enter into hedging arrangements in order to manage foreign currency exposure, but such activity may not completely

eliminate fluctuations in our operating results, and there are costs associated with such hedging activities.

we fail to protect confidential information against security breaches, or if distributors or travelers are reluctant to use our online

marketplace because of privacy or security concerns, we might face additional costs, and activity on our websites could decline .

collect and use personally identifiable information of distributors and travelers in the operation of our business.

Our systems may be

vulnerable to computer viruses or physical or electronic break-ins that our security measures may not detect.

Anyone that is able to

circumvent our security measures could misappropriate confidential or proprietary information, cause an interruption in our operations,

damage our computers or those of our users, or otherwise damage our reputation and business.

We may need to expend significant resources

to protect against security breaches or to address problems caused by breaches.

Security breaches of our systems, or the systems of third

parties we rely upon, such as credit card processors, could damage our reputation and expose us to litigation and possible liability

under various laws and regulations.

Concern among distributors and travelers regarding our use of personal information collected on our

websites could keep them from using, or continuing to use, our online marketplace.

are risks of security breaches both on our systems and on third party systems which store our information as we increase the types of

technology that we use to operate our marketplace, such as mobile applications.

New and evolving technology systems and platforms may

involve security risks that are difficult to predict and adequately guard against.

In addition, third parties that process credit card

transactions between NextTrip and travelers maintain personal information collected from them.

Such information could be stolen or misappropriated,

and we could be subject to liability as a result.

Our distributors and travelers may be harmed by such breaches, and we may in turn be

subject to costly litigation or regulatory compliance costs, and harm to our reputation and brand.

Moreover, some distributors and travelers

may cease using our marketplace altogether.

laws of some states and countries require businesses that maintain personal information about their residents in electronic databases

to implement reasonable measures to keep that information secure.

Our practice is to encrypt all sensitive information, but we do not

know whether our current practice will be challenged under these laws.

In addition, under certain of these laws, if there is a breach

of our computer systems and we know or suspect that unencrypted personal data has been stolen, we are required to inform any user whose

data was stolen, which could harm our reputation and business.

Complying with the applicable notice requirements in the event of a security

breach could result in significant costs.

We may also be subject to contractual claims, investigation and penalties by regulatory authorities,

and claims by persons whose information was disclosed.

these legal risks, many states and countries have enacted different and often contradictory requirements for protecting personal information

collected and maintained electronically.

Compliance with these numerous and contradictory requirements is particularly difficult for

us because we collect personal information from users in multiple jurisdictions.

While we intend to comply fully with these laws, failure

to comply could result in legal liability, cause the Company to suffer adverse publicity and lose business, traffic and revenue.

were required to pay any significant amount of money in satisfaction of claims under these or similar laws, or if we were forced to cease

our business operations for any length of time as a result of our inability to comply fully, our business, operating results and financial

condition could be adversely affected.

Cyber-attacks

and system vulnerabilities could lead to sustained service outages, data loss, reduced revenue, increased costs, liability claims, or

harm to our competitive position.

may experience targeted and organized malware, phishing, and account takeover attacks and other forms of attack such as ransomware, SQL

injection (where a third-party attempts to insert malicious code into its software through data entry fields in its websites in order

to gain control of the system) and attempts to use our websites as a platform to launch a denial-of-service attack on another party.

Our existing security measures may not be successful in preventing attacks on our systems.

Our existing IT business continuity and disaster

recovery practices are less effective against certain types of attacks such as ransomware, which could result in our services being unavailable

for an extended period of time, nullify our data, expose our payment card and personal data, or expose the Company to an extortion attempt.

in the availability and response time of our online services could cause loss of substantial business volumes during the occurrence of

a cyber-attack on our systems and measures we may take to divert suspect traffic in the event of such an attack could result in the diversion

of bona fide customers.

These issues are more difficult to manage during any expansion of the number of places where we operate and the

variety of services we offer, and as the tools and techniques used in such attacks become more advanced.

We use sophisticated technology

to identify cybersecurity threats;

however, a cyberattack may go undetected for a period of time resulting in harm to our computer systems

and the loss of data.

This could result in financial penalties being imposed by the regulators and reputational harm.

Our insurance policies

have coverage limits and may not be adequate to reimburse us for all losses caused by security breaches.

Successful attacks could result

in significant interruptions in our operations, severe damage to our information technology infrastructure, negative publicity, damage

our reputation, and prevent consumers from using our services during the attack, any of which could cause consumers to use the services

of our competitors, which would have a negative effect on the value of our brands, market share, business, and results of operations.

our systems cannot cope with the level of demand required to service our consumers and accommodations, we could experience unanticipated

disruptions in service, slower response times, decreased customer service and customer satisfaction, and delays in the introduction of

new services.

an online business, we are dependent on the Internet and maintaining connectivity between itself and consumers, sources of Internet traffic,

such as Google, and our travel service providers and restaurants.

As consumers increasingly turn to mobile and other smart devices, we

also depend on consumers’ access to the Internet through mobile carriers and their systems.

Disruptions in internet access, especially

if widespread or prolonged, could materially adversely affect our business and results of operations.

While we maintain redundant systems

and hosting services, it is possible that we could experience an interruption in our business, and we do not carry business interruption

insurance sufficient to compensate us for all losses that may occur.

We have computer hardware for operating our services located in

hosting facilities around the world.

We do not have a comprehensive disaster recovery plan in every geographic region in which we conduct

business, and these systems and operations are vulnerable to damage or interruption from human error, misconduct, or catastrophic events.

In the event of any disruption of service at such facilities or the failure by such facilities to provide our required data communications

capacity, we may not be able to switch to back-up systems immediately and it could result in lengthy interruptions or delays in our services.

We have taken and continue to take steps to increase the reliability and redundancy of our systems.

These steps are expensive, may reduce

our margins, and may not be successful in reducing the frequency or duration of unscheduled downtime.

or material modification of our credit card acceptance privileges could have a material adverse effect on our business and operating

loss of our credit card acceptance privileges could significantly limit the availability and desirability of our products and services.

Moreover, if we fail to fully perform our contractual obligations, we could be obligated to reimburse credit card companies for refunded

payments that have been contested by the cardholders.

In addition, even when we are in compliance with these obligations, we bear other

expenses including those related to the acceptance of fraudulent credit cards.

As a result of all of these risks, credit card companies

may require us to set aside additional cash reserves, may increase the transaction fees they charge us, or may even refuse to renew our

acceptance privileges.

addition, credit card networks, such as Visa, MasterCard and American Express, have adopted rules and regulations that apply to all merchants

who process and accept credit cards and include the Payment Card Industry Data Security Standards, or the PCI DSS.

Under these rules,

we are required to adopt and implement internal controls over the use, storage and security of card data.

We assess our compliance with

the PCI DSS rules on a periodic basis and makes necessary improvements to our internal controls.

Failure to comply may subject us to

fines, penalties, damages and civil liability and could prevent us from processing or accepting credit cards.

However, we cannot guarantee

that compliance with these rules will prevent illegal or improper use of our payment systems or the theft, loss or misuse of the credit

loss of, or the significant modification of, the terms under which we obtain credit card acceptance privileges could have a material

adverse effect on our business, revenue and operating results.

currently rely on a small number of third-party service providers to host and deliver a significant portion of our services, and any

interruptions or delays in services from these third parties could impair the delivery of our services and harm our business.

rely on third-party service providers for numerous products and services, including payment processing services, data center services,

web hosting services, insurance products for customers and travelers and some customer service functions.

We rely on these companies

to provide uninterrupted services and to provide their services in accordance with all applicable laws, rules and regulations.

use a combination of third-party data centers to host our websites and core services.

We do not control the operation of any of the third-party

data center facilities we use.

These facilities may be subject to break-ins, computer viruses, denial-of-service attacks, sabotage, acts

of vandalism and other misconduct.

They are also vulnerable to damage or interruption from power loss, telecommunications failures, fires,

floods, earthquakes, hurricanes, tornadoes and similar events.

We currently do not have a comprehensive disaster recovery plan in place

nor do our systems provide complete redundancy of data storage or processing.

As a result, the occurrence of any of these events, a decision

by our third-party service providers to close their data center facilities without adequate notice or other unanticipated problems could

result in loss of data as well as a significant interruption in our services and harm to our reputation and brand.

our third-party service providers experience difficulties and are not able to provide services in a reliable and secure manner, if they

do not operate in compliance with applicable laws, rules and regulations and, with respect to payment and card processing companies,

if they are unable to effectively combat the use of fraudulent payments on our websites, our results of operations and financial positions

could be materially and adversely affected.

In addition, if such third-party service providers were to cease operations or face other

business disruption either temporarily or permanently, or otherwise face serious performance problems, we could suffer increased costs

and delays until we find or develop an equivalent replacement, any of which could have an adverse impact on our business and financial

we do not adequately protect our intellectual property, our ability to compete could be impaired.

intellectual property includes the content of our websites, registered domain names, as well as registered and unregistered trademarks.

we believe that our intellectual property is an essential asset of our business and that our domain names and our technology infrastructure

currently give us a competitive advantage in the online market for travel.

If we do not adequately protect our intellectual property,

our brand, reputation and perceived content value could be harmed, resulting in an impaired ability to compete effectively.

protect our intellectual property, we rely on a combination of copyright, trademark, patent and trade secret laws, contractual provisions

and our user policy and restrictions on disclosure.

Upon discovery of potential infringement of our intellectual property, we promptly

take action we deem appropriate to protect our rights.

We also enter into confidentiality agreements with our employees and consultants

and seek to control access to and distribution of our proprietary information in a commercially prudent manner.

The efforts we have taken

to protect our intellectual property may not be sufficient or effective, and, despite these precautions, it may be possible for other

parties to copy or otherwise obtain and use the content of our websites without authorization.

We may be unable to prevent competitors

from acquiring domain names or trademarks that are similar to, infringe upon or diminish the value of our domain names, service marks

and our other proprietary rights.

Even if we do detect violations and decide to enforce our intellectual property rights, litigation

may be necessary to enforce our rights, and any enforcement efforts we undertake could be time-consuming, expensive, distracting and

result in unfavorable outcomes.

A failure to protect our intellectual property in a cost-effective and meaningful manner could have a

material adverse effect on our ability to compete.

trademark, copyright and trade secret protection may not be available in every country in which our offerings are available over the

In addition, the legal standards relating to the validity, enforceability and scope of protection of intellectual property

rights are uncertain and still evolving.

may be subject to claims that we violated intellectual property rights of others, which are extremely costly to defend and could require

us to pay significant damages and limit our ability to operate.

in the Internet and technology industries, and other patent and trademark holders seeking to profit from royalties in connection with

grants of licenses, own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based

on allegations of infringement or other violations of intellectual property rights.

There may be intellectual property rights held by

others, including issued or pending patents and trademarks, that cover significant aspects of our technologies, content, branding or

business methods.

Any intellectual property claims against us, regardless of merit, could be time-consuming and expensive to settle or

litigate and could divert management’s attention and other resources.

These claims also could subject us to significant liability

for damages and could result in the Company having to stop using technology, content, branding or business methods found to be in violation

of another party’s rights.

We might be required or may opt to seek a license for rights to intellectual property held by others,

which may not be available on commercially reasonable terms, or at all.

If we cannot license or develop technology, content, branding

or business methods for any allegedly infringing aspect of our business, we may be unable to compete effectively.

Even if a license is

available, we could be required to pay significant royalties, which could increase our operating expenses.

We may also be required to

develop alternative non-infringing technology, content, branding or business methods, which could require significant effort and expense

and be inferior.

Any of these results could harm our operating results.

the businesses and/or assets that we have acquired or invested in do not perform as expected or we are unable to effectively integrate

acquired businesses, our operating results and prospects could be harmed .

future mergers and acquisitions, if any, will involve numerous risks, including the following:

in integrating and managing the combined operations, technologies, technology platforms and products of the acquired companies and

realizing the anticipated economic, operational and other benefits in a timely manner, which could result in substantial costs and

delays or other operational, technical or financial problems;

or regulatory challenges or post-acquisition litigation, which could result in significant costs or require changes to the businesses

or unwinding of the transaction;

of the acquired company or assets to achieve anticipated revenue, earnings or cash flow;

of management’s attention or other resources from our existing business;

inability to maintain key distributors and business relationships, and the reputations of acquired businesses;

resulting from entering markets in which we have limited or no prior experience or in which competitors have stronger market positions;

dependence on unfamiliar affiliates and partners of acquired businesses;

unanticipated

costs associated with pursuing acquisitions;

of acquired businesses, which may not be disclosed to us or which may exceed our estimates, including liabilities relating to non-compliance

with applicable laws and regulations, such as data protection and privacy controls;

in assigning or transferring to us or our subsidiaries intellectual property licensed to companies we acquired;

loss of key employees of the acquired companies;

in complying with antitrust and other government regulations;

in integrating and auditing the financial statements of acquired companies that have not historically prepared financial statements

in accordance with U.S.

generally accepted accounting principles;

accounting charges to the extent intangibles recorded in connection with an acquisition, such as goodwill, trademarks, customer relationships

or intellectual property, are later determined to be impaired and written down in value.

we rely heavily on the representations and warranties provided to us by the sellers of acquired companies and assets, including as they

relate to creation, ownership and rights in intellectual property, existence of open-source software and compliance with laws and contractual

requirements.

If any of these representations and warranties are inaccurate or breached, such inaccuracy or breach could result in costly

litigation and assessment of liability for which there may not be adequate recourse against such sellers, in part due to contractual

time limitations and limitations of liability.

to obtain adequate insurance coverage could put us at risk for uninsured losses.

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are dependent on key personnel, and the loss of any of these individuals could harm our business.

depend on key scientific and other personnel.

The loss of any of these individuals could harm our business and significantly delay or

prevent the achievement of our business objectives.

depend on key industry and other personnel.

The loss of any of these individuals could harm our business and significantly delay or prevent

the achievement of our business objectives.

In addition, our delivery of services will be labor-intensive:

when we are awarded

a contract, we may need to quickly hire project leaders and project management personnel.

The additional staff may also create a concurrent

demand for increased administrative personnel.

when we are awarded a contract,

we may need to quickly hire project leaders and project management personnel.

The additional staff may also create a concurrent demand

for increased administrative personnel.

The success of our business will require that we attract, develop, motivate and retain:

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our business.

may be dependent on cash flow and payments from customers in order to meet our expense obligations.

number of factors may cause our revenues, cash flow and operating results to vary from quarter to quarter, including the following:

progression of contracts;

rate of customer adoption of our new subscription pricing program;

commencement, completion or termination of contracts during any particular quarter;

schedules of government agencies and large multinational corporations for awarding contracts;

failure of our customers to fulfill their obligations under contracts with us;

term of awarded contracts and potential acquisitions.

in the volume of activity and the number of contracts commenced, completed or terminated during any quarter may cause significant variations

in our cash flow from operations because a significant portion of our expenses are fixed.

Fixed expenses include, rent, payroll, insurance,

employee benefits, taxes and other administrative costs and overhead.

Moreover, we expect to incur significant operating expenses during

the start-up and early stages of large contracts and typically do not receive corresponding payments in that same quarter.

may make acquisitions in the future that we are unable to effectively manage given our limited resources.

may choose to grow our business by acquiring other entities.

We may be unable to manage businesses that we acquire or to integrate

them successfully without incurring substantial expenses, delays or other problems that could negatively impact our results of operations.

Moreover, business combinations involve additional risks, including:

of management’s attention;

of key personnel;

becoming significantly leveraged as a result of the incurrence of debt to finance an acquisition;

of unanticipated legal or financial liabilities;

unanticipated

operating, accounting or management difficulties in connection with the acquired entities;

of acquired intangible assets, including goodwill;

to existing stockholders and our earnings per share.

client dissatisfaction or performance problems with an acquired firm could materially and adversely affect our reputation as a whole.

Further, the acquired businesses may not achieve the revenues and earnings that we anticipated.

may be unable to develop or commercialize new and rapidly evolving technologies.

of our activities involve developing products or processes that are based upon new, rapidly evolving technologies.

The ability to commercialize

or further develop these technologies could fail for a variety of reasons, both within and outside of our control.

may be unable to protect our intellectual property rights.

success in part depends on the ability to protect our intellectual property and proprietary technology.

To do so, we will be required

to prosecute patent applications and maintain patents, obtain new patents and pursue trade secret and other intellectual property protection.

There can be no assurance that our program for protection of intellectual property and proprietary technology will be sufficient to protect

our intellectual property and proprietary technology from competitors.

Our business is also subject to the risk that our issued patents

will not provide us with significant competitive advantages if, for example, a competitor was to independently develop or obtain similar

or superior technologies.

In addition, our issued patents may be challenged or infringed upon by third parties.

The enforcement of intellectual

property rights is subject to considerable uncertainty and can be expensive and time-consuming.

Patent reform laws and court decisions

interpreting such laws, may create additional uncertainty around our ability to obtain and enforce patent protection.

Any significant

impairment of our intellectual property rights could harm our business and our ability to compete.

The unauthorized use of our intellectual

property could make it more expensive to do business and harm our operating results.

Proprietary trade secrets and unpatented know-how

are also very important to our business;

however, trade secrets are difficult to protect.

Our employees, consultants, contractors, outside

scientific collaborators and other advisors may unintentionally or willfully disclose our confidential information to competitors, and

confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential or proprietary

may be sued by third parties who claim that we have infringed their intellectual property rights.

may be exposed to future litigation by third parties based on claims that our research, development and commercialization activities

infringe the intellectual property rights of third parties to which we do not hold licenses or other rights, or that we have misappropriated

the trade secrets of others.

Any litigation or claims against us, whether or not valid, could result in substantial costs, and could

place a significant strain on our financial and human resources.

In addition, if successful, such claims could cause us to pay substantial

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there

is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

bylaws contain provisions for indemnifying our officers and directors.

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and implementation costs could adversely affect us due to numerous factors, many of which are beyond our control.

cyber incident could result in information theft, data corruption, operational disruption and/or financial loss.

have become increasingly dependent on digital technologies to conduct day-to-day operations.

At the same time, cyber incidents, including

deliberate attacks or unintentional events, have increased.

A cyber-attack could include gaining unauthorized access to digital systems

for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption or result in denial

of service on websites.

We depend on digital technology, including information systems and related infrastructure, to process and record

financial and operating data, and communicate with our employees and business partners.

Our technologies, systems, networks, and those

of our business partners may become the target of cyber-attacks or information security breaches that could result in the unauthorized

release, gathering, monitoring, misuse, loss or destruction of proprietary and other information, or other disruption of our business

The consequences of such loss, possible misuse of our proprietary and confidential information, or operational disruptions

could include, among other things, unfavorable publicity, damage to our reputation, difficulty marketing our products, customer allegations

of breach-of-contract, claims and litigation by affected parties, investigations by and other proceedings involving governmental authorities

and possible financial liabilities for damages, any of which could materially adversely affect our business, financial condition, reputation

and relationships with customers and partners.

We also rely on a number of third-party service providers to host, store or otherwise

process information for us, or to provide other facilities or infrastructure that we make use of, including “cloud-based”

providers of corporate infrastructure services relating to, among other things, human resources, electronic communication services and

some financial functions, and we are therefore dependent on the security systems of these providers.

Any security breaches or incidents

or other unauthorized access to, or disruptions of, our service-providers’ systems or viruses, loggers, ransomware or other malfeasant

code in their data or software, or unauthorized access to or acquisition of any data they process or otherwise maintain for us could

expose us to information loss, corruption and unavailability, operational disruptions, and misappropriation of confidential information,

and could have similar consequences to us as any incidents affecting our own systems or the data we process or maintain.

We and our third

parties face these threats from a variety of sources, including attacks from hackers, phishing and other forms of social engineering,

and human error or employee or contractor malfeasance.

Because the techniques used to obtain unauthorized access to or sabotage security

systems change frequently and are often not recognized until after an attack, we and our third-party service providers may be unable

to anticipate the techniques or implement adequate preventative measures, thereby exposing us to material adverse effects on our business,

financial condition, results of operations and growth prospects.

A security breach or other security incident impacting us or our third-party

service providers could require a substantial level of financial resources to rectify and otherwise respond to, may be difficult to identify

or address in a timely manner, and could result in claims, investigations, and inquires by private parties or governmental entities that

may divert management’s attention and require the expenditure of significant time and resources, and which may cause us to incur

substantial fines, penalties, or other liability and related legal and other costs.

Any actual or perceived security breach or other

security incident may also harm our reputation and market position.

Any of the foregoing matters could harm our operating results and

financial condition.

Although to-date we have not experienced any losses relating to cyber-attacks, there is no assurance that we will

not suffer such losses in the future.

As cyber threats continue to evolve, we may be required to expend significant additional resources

to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.

results of operations may be negatively impacted by the COVID-19 epidemic.

potential reemergence of the coronavirus, which has caused a broad impact globally, including restrictions on travel and quarantine policies

put in place by businesses and governments, may have a material economic effect on our business.

Additionally, the coronavirus may result

in disruption of financial markets, which may reduce our ability to access capital on favorable terms or at all.

Related to Our Securities

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our stockholders.

January 1, 2022 and December 31, 2022, the trading price of our common stock has ranged from a low of $0.40 to a high of $2.42 and could

March 1, 2023 and February 29, 2024, the trading price of our common stock has ranged from a low of $2.42 to a high of $12.40 and could

be subject to wide fluctuations in the future in response to various factors, some of which are beyond our control.

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is no assurance that we will satisfy the continued listing requirements of The Nasdaq Capital Market.

October 14, 2022, Nasdaq notified us that the closing bid price for our common stock had been below $1.00 per share for 30 consecutive

business days, and that the Company therefore is not in compliance with the minimum bid price requirement for continued inclusion on

The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2).

The notice indicates that the Company has 180 calendar days, or until

April 12, 2023, to regain compliance with this requirement.

The Company can regain compliance with the $1.00 minimum bid price requirement

if the closing bid price of the Company’s common stock is at least $1.00 for a minimum of ten consecutive business days during

the 180-day compliance period.

If the Company does not regain compliance during the initial compliance period, the Company may be eligible

for additional time to regain compliance.

To qualify, the Company will be required to meet the continued listing requirement for market

value of its publicly held shares and all other Nasdaq initial listing standards, except the bid price requirement, and will need to

provide written notice to Nasdaq of the Company’s intention to cure the deficiency during the second compliance period by effecting

a reverse stock split, if necessary.

If the Company meets these requirements, we expect that Nasdaq will grant the Company the additional

180 calendar days to regain compliance with the minimum bid price requirement.

August 17, 2023, the Company received a letter from Nasdaq notifying the Company that it no longer complied with Nasdaq Listing Rule

5550(b)(1), which requires companies listed on the Nasdaq Capital Market to maintain minimum stockholders’ equity of $2,500,000

(the “Minimum Stockholder Equity Requirement”), and did not meet the alternatives of market value of listed securities or

net income from continuing operations.

On October 2, 2023, the Company submitted its plan to regain compliance to Nasdaq and requested

an extension to February 13, 2024 to regain compliance with the Minimum Stockholder Equity Requirement.

On October 23, 2023, Nasdaq granted

the requested extension and provided the Company until February 13, 2024 to demonstrate compliance.

Nasdaq further informed the Company

that if the Company fails to show compliance upon filing its next periodic report with the SEC and Nasdaq, the Company may be subject

to delisting.

submitting its plan to Nasdaq, the Company has completed the following transactions, which the Company believes has resulted in the Company

regaining compliance with the Minimum Stockholder Equity Requirement:

December 29, 2023, the Company acquired 100% of the outstanding equity interests of NextTrip pursuant to a share exchange agreement by and among the Company, NextTrip and certain other parties (the “Acquisition”).

As consideration for the Acquisition, at closing the Company issued 156,007 restricted shares of its common stock, constituting 19.99%

of its issued and outstanding shares of common stock immediately prior to execution of the share exchange agreement, and agreed to

issue up to an aggregate of 5,843,993 shares as further consideration upon NextTrip’s achievement of certain milestones set

forth in the exchange agreement.

January 16, 2024, the Company completed the sale of certain assets, consisting primarily of patents, software code and other intellectual

property, to Divergent Technologies, Inc.

for a purchase price of $1,626,242, resulting in net proceeds to the Company of $1,533,563.

October 2023, the Company sold an aggregate of 128,887 shares of its common stock under its existing at-the-market agreement, resulting

in net proceeds to the Company of approximately $772,468.

unaudited condensed combined pro-forma balance sheet of the Company as of September 30, 2023, which presents the combination of the financial

information of the Company and NextTrip adjusted to give effect to completion of the Acquisition and the Asset Sale, is filed as Exhibit

99.3 of a Current Report on Form 8-K filed by the Company with the SEC on January 10, 2024, and reflects total stockholders’ equity

of approximately $5.4 million.

February 12, 2024, the Company filed a Current Report on Form 8-K with the SEC disclosing that the Company believes it had regained compliance

with the Minimum Stockholder Equity Requirement based upon the specific transactions and events referenced above.

Nasdaq will continue

to monitor the Company’s ongoing compliance with Minimum Stockholder Equity Requirement and, if at the time of its next periodic

report the Company does not show compliance, the Company may be subject to delisting.

On June 17, 2024, the Company received a notification

letter (the “Initial Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”)

advising the Company that it was not in compliance with Nasdaq’s continued listing requirements under Nasdaq Listing Rule 5250(c)(1)

(the “Rule”) as a result of its failure to timely file its Annual Report on Form 10-K for the fiscal year ended February 29,

2024 (the “Form 10-K”).

On July 17, 2024, the Company received an additional

notification letter (the “Additional Notice,” and together with the Initial Notice, the “Notices”) from Nasdaq

stating that, because the Company has not filed its Quarterly Report on Form 10-Q for the quarter ended May 31, 2024 (the “Form

10-Q”), and because the Company remains delinquent in filing the Form 10-K, the Company remains noncompliant with the Rule.

Neither of the Notices have an immediate effect on

the listing of the Company’s common stock on the Nasdaq Capital Market, and, therefore, the Company’s listing remains fully

The Notices require the Company to either file the

delinquent Form 10-K and Form 10-Q with the Commission or submit a plan to regain compliance with the Rule by August 16, 2024.

accepts the Company’s plan, then Nasdaq may grant an exception of up to 180 calendar days from the Form 10-K’s due date, or

until December 10, 2024, to regain compliance.

If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity

to appeal that decision to a Nasdaq Hearings Panel under Nasdaq Listing Rule 5815.

On August 16, 2024, the Company submitted a plan to Nasdaq regain compliance with the Rule, including the steps the

Company will take to promptly file the Form 10-Q and regain compliance.

The Company has requested an extension until September 30, 2024.

There can be no assurance that the Company will regain compliance with the Rule, secure an exception until September 30, 2024 to regain

compliance, or maintain compliance with other Nasdaq listing requirements.

we fail to satisfy a Nasdaq requirement for continued listing, Nasdaq could provide notice that our common stock will become subject

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to fund our operations.

See also “ Nasdaq Compliance ” on page 6.

may experience additional dilution as a result of future equity offerings.

order to raise additional capital, we may sell additional shares of our common stock or other securities convertible into

or exchangeable for our common stock.

The price per share at which we sell additional shares of our common stock, or securities convertible

or exchangeable into common stock, in future transactions may be lower than the price per share that you paid for our common stock.

order to raise additional capital, we may sell additional shares of our common stock or other securities convertible into or exchangeable

for our common stock.

The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable

into common stock, in future transactions may be lower than the price per share that you paid for our common stock.

have broad discretion in the use of the net proceeds of our securities offerings and may not use them effectively.

intend to use our cash for the development of our products and services, and to pursue a possible strategic investment or other transaction.

Our management has broad discretion in the use of cash and will

have the right to use our cash in ways that differ substantially from our current plans.

Management may spend our cash in ways that do

not improve our results of operations or enhance the value of our securities.

The failure by management to apply funds effectively could

result in financial losses that could have a material and adverse effect on our business and cause the market price of our securities

Our management has broad discretion in the use of cash and will have the right to use our cash in ways that differ substantially from

our current plans.

Management may spend our cash in ways that do not improve our results of operations or enhance the value of our securities.

The failure by management to apply funds effectively could result in financial losses that could have a material and adverse effect on

our business and cause the market price of our securities to decline.

outstanding warrants may result in further dilution to our stockholders.

of our outstanding warrants to purchase a total of up to approximately 898,806 shares of our common stock contain so-called

full-ratchet anti-dilution adjustments in the event we sell or issue shares of common stock or common stock equivalents at an

effective price less than the exercise price of such warrants, subject to certain exceptions.

Of these warrants, warrants with an

aggregate exercise price of $956,015 also provide for a ratable increase in the number of shares purchasable upon exercise of the

warrants in the event the exercise price per share of the warrants is reduced.

These anti-dilution adjustments resulted in a reduction in the exercise price of such warrants to $0.58 per share and an increase of 1,265,896 shares in the number of underlying warrant

shares due to the grant of stock options to our directors and officers in January 2023.

The anti-dilution adjustments of our outstanding

warrants would be triggered by future issuances of shares of our common stock at a price per share below the then-exercise price of

such warrants, which adjustments would have a further dilutive effect on our stockholders.

of our outstanding warrants to purchase a total of up to approximately 486,165 shares of our common stock contain so-called full-ratchet

anti-dilution adjustments in the event we sell or issue shares of common stock or common stock equivalents at an effective price less

than the exercise price of such warrants, subject to certain exceptions.

Of these warrants, warrants with an aggregate exercise price

of $956,015 also provide for a ratable increase in the number of shares purchasable upon exercise of the warrants in the event the exercise

price per share of the warrants is reduced.

The anti-dilution adjustments of our outstanding warrants would be triggered by future issuances

of shares of our common stock at a price per share below the then-exercise price of such warrants, which adjustments would have a further

dilutive effect on our stockholders.

do not intend to pay dividends on our common stock, and your ability to achieve a return on your investment will depend on appreciation

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of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

As of December 31, 2022, we had

10,498,802 outstanding shares of common stock.

Future sales of a large number of our shares or shares issuable upon exercise of our outstanding

warrants and stock options, or the perception that a large number of shares may be sold, could have a material adverse effect on the trading

price of our common stock.

of February 29, 2024, we had 936,430 outstanding shares of common stock.

Future sales of a large number of our shares or shares issuable

upon exercise of our outstanding warrants and stock options, or the perception that a large number of shares may be sold, could have

a material adverse effect on the trading price of our common stock.

will incur significant costs to ensure compliance with U.S.

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incur significant costs associated with compliance with our SEC public company reporting requirements and with applicable U.S.

Nasdaq corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002.

These rules and regulations

may also make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required

to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

result, it may be difficult for us to attract and retain qualified individuals to serve on our Board of Directors or as executive

corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002.

These rules and regulations may also

make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept

reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

As a result, it may be

difficult for us to attract and retain qualified individuals to serve on our Board of Directors or as executive officers.

we fail to maintain effective internal control over financial reporting, the market price of our securities may be adversely affected.

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exclusive right of our Board of Directors to elect a director to fill a vacancy created by the expansion of the Board of Directors

or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors;

or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of

ability of our Board of Directors to alter our bylaws without obtaining stockholder approval;

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to merge with or sell our assets to a third party.

As of December 31, 2022, 465 shares of our preferred stock are outstanding, consisting

of 132 shares of Series D Preferred Stock and 333 shares of Series E Preferred Stock.

In addition to the possible negative effect on

the market price of our common shares resulting from the public sale or perceived sale of common shares issuable upon conversion or exercise

of these securities, the Certificate of Designations for the Series D Preferred Stock provides that upon occurrence of certain triggering

events described in the Certificate, including but not limited to, payment defaults, breaches of the transaction documents pertaining

to the Series D Preferred Stock and failure to maintain listing on The Nasdaq Capital Market, the Series D Preferred Shares would become

subject to redemption, at the option of the holder, at a 125% premium to the underlying value of the Series D Shares being redeemed.

UNRESOLVED STAFF COMMENTS.

As of August 31, 2024, 63,494 shares of our preferred stock are outstanding, consisting

of 316 shares of Series E Preferred Stock, 33,000 shares of Series H Preferred Stock and 30,178 shares of Series I Preferred Stock.

a result, there is a possible negative effect on the market price of our common shares resulting from the public sale or perceived sale

of common shares issuable upon conversion or exercise of these securities.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors