Item 1. Business
ITEM
1. BUSINESS.
The
Company:
NextTrip,
Inc. (the “Company,” “NextTrip,” “we,” “us” and “our”) is an innovative technology
company that is building next generation solutions to power the travel industry. NextTrip, through its subsidiaries, provides travel
technology solutions with sales originating in the United States, leisure travel, business travel, groups travel, media and tech. We
connect people to new places and discoveries by utilizing digital media engagement, seasoned planning expertise, and unique inventory
to curate custom vacations and business travel across the globe. Our proprietary booking engine, branded as NXT2.0, provides travel distributors
and consumers access to a sizeable inventory.
Our
vision is to drive the evolution of the travel industry by merging advanced digital solutions with personalized travel services. Our
core technology – a fully integrated travel booking platform – focuses on untapped and underserved sectors of the travel
industry, intending to capture new markets. We expect that our future growth will be accelerated by interactive technology, immersive
media and unparalleled travel industry expertise.
We
believe NextTrip will revolutionize the travel industry by combining advanced digital technologies with personalized travel services.
Our mission is to become the premier travel, media, and lifestyle brand, inspiring and empowering individuals to explore the world. Through
our brands, including NextTrip Vacations, Travel Magazine, and Compass.TV, we aim to create a unique ecosystem that reduces dependency
on traditional marketing methods, where major travel companies spend billions to attract customers.
Our
strategy focuses on both the Media and Travel divisions working together to draw users into our ecosystem by offering the following benefits:
●
Access
to a wealth of highly relevant travel videos and articles for research.
●
The
ability to plan and save future travel destinations and activities on personalized profiles.
●
Options
to share travel ideas and communicate with others.
●
Assistance
from our concierge help desk and AI-powered solutions.
●
The
convenience of booking travel online or through a call center.
●
Access
to customer support before, during, and after travel.
●
The
opportunity to earn rewards that encourage repeat bookings.
Our
ecosystem is built on four key pillars:
1.
NextTrip :
A comprehensive travel booking platform that offers curated, personalized, and seamless travel experiences for every budget and interest.
Powered by the NXT2.0 booking platform, NextTrip serves as our direct-to-consumer hub, providing users with detailed scheduling,
pricing, and availability information for airlines, hotels, rental cars, and other travel products. We also offer dynamically assembled
travel packages and provide valuable content, including destination information, maps, and travel details, all supported by our customer
call center .
2.
Travel
Magazine : A trusted source of captivating travel inspiration, offering authentic stories, practical advice, and diverse perspectives
to fuel wanderlust and create lasting vacation memories. Travel Magazine will soon launch MyBucketList, a platform designed for travelers
to build and share their travel bucket lists with personalized suggestions, booking support, and local insights.
3.
Compass.TV :
Our Free Ad-supported Streaming TV (FAST) channel, slated for launch in fall 2024. Compass.TV will offer over 1,000 hours of travel
shows and long-form travel content at launch. To draw users into the NextTrip ecosystem, the launch will be supported by travel influencers,
promoted to our 6 million-strong email list, and marketed to major streaming platforms like Roku and YouTube. Compass.TV plans to
use artificial intelligence to personalize content, convert blogs and articles to video, and enable users to create custom videos.
This platform will allow users to create fully customized FAST channels featuring vacation opportunities that can be explored and
booked directly through the NextTrip booking engine.
4.
PrometheanTV :
A unique influencer-led platform that drives advertising revenue and content-to-commerce. We recently secured a perpetual license
with Promethean TV, Inc., the developer of the Ignite TV interactive video platform. This technology will power Compass.TV and video
content on Travel Magazine/MyBucketList, allowing for targeted advertising via video overlays, enabling viewers to purchase travel
directly from their screens. This integration is designed to enhance customer engagement, drive ad-supported revenue, and increase
travel transactions.
By
integrating the NextTrip booking platform across all our media platforms, we will enable users to research and book travel seamlessly
from any of our offerings. Our ecosystem will encompass leisure travel, wellness travel, business travel, alternative lodging, and innovative
technology and media solutions. We will engage with consumers throughout the entire travel planning journey, from initial research to
post-travel, offering robust product options and preferred rates in top global destinations. We believe that NextTrip stands apart from
other travel companies, providing users with the tools to create personalized vacation packages and travel solutions, resulting in a
more rewarding experience than traditional pre-packaged offerings. This ensures a thriving and growing ecosystem that drives both travel
transactions and targeted advertising revenue while supporting consumers on their travel journeys—truly a next-generation travel
company.
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Organizational
History
Historical
Monaker Group Business
NextTrip’s
travel business was the principal business of NextPlay NextPlay Technologies, Inc. (“NextPlay”) (then, Monaker Group, Inc.
(“Monaker”)) until June 30, 2020, when Monaker entered into a share exchange transaction with HotPlay Enterprise Limited
(“HotPlay”), resulting in HotPlay becoming a wholly owned subsidiary of Monaker and HotPlay’s business becoming the
principal business of Monaker. Prior to this share exchange, the primary focus of Monaker had been its travel business, which included
the sale of vacation rentals, and in particular, ALRs, to consumers through its proprietary booking engine. To support its travel offerings,
Monaker introduced travelmagazine.com, featuring travel and lifestyle content to appeal to travelers researching destinations and planning
future vacations. In January 2023, NextPlay spun the NextTrip business out to its founders to separate it from NextPlay’s primary
business.
COVID-era
Transition and Technology Development
The
spread of the COVID-19 virus globally beginning in January 2020 severely impacted our 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 negative impact on our business, financial condition and results of operations.
Due
to the significant decrease in demand for the travel related services provided by us during the peak of the COVID-19 pandemic, we shifted
our focus to developing and enhancing our program offerings. For example, we began to develop our online media platform -TravelMagazine.com
allowing consumers to research future travel options as well as enhancing the functionality of our booking engines, including developing
a booking engine platform that allows customers to book packaged vacations and wellness programs along with the development of a platform
to arrange and manage business travel.
Acquisition
of Bookit.com Asset
Following
NextTrip’s separation from NextPlay, our team focused on the continued technological development of its booking platform. As part
of this development, we acquired a travel platform in June 2022 to help power our proprietary NXT2.0 booking technology. Previously,
this technology powered the Bookit.com business, a well-established online leisure tour operator generating over $400 million in annual
sales as recently as 2019 (pre-pandemic). As part of the acquisition of the assets of Bookit.com, we were not only able to acquire a
proven technology platform that could be integrated with our core travel sectors, but we were also able to secure the database with millions
of past travelers and opt-in consumers.
Since
2022, and the acquisition of the Bookit.com business, we have been focused on the holistic development and integration of the NXT2.0
technology platform, which serves as a base for current and future technology projects as well as proprietary system enhancements. This
integration includes re-engaging with and re-negotiating more than 250 contracts with hotel, airline, and cruise suppliers, and securing
unique product inventory of more than 3 million lodging, air and tour product suppliers at exceptional rates to over 2,100 destinations
in 200+ countries worldwide.
Through
this strategic offering, we will focus on key areas of opportunity in the travel sector and drive enhanced booking conversion rates.
Our proprietary technology, when combined with media, product offerings and customer service, provides a unique lane to serve mid-to
luxury travelers.
Recent
Developments
Acquisition
by Sigma Additive Solutions, Inc.; Name Change
In
December 2023, Sigma Additive Solutions, Inc. (“Sigma”) acquired 100% of the outstanding equity interests in NextTrip,
which resulted in NextTrip becoming a wholly-owned subsidiary of a public company and the principal business of the Company moving
forward. To align the new business with NextTrip’s travel-focused business model, the Company recently changed its name to
“NextTrip, Inc.”
Acquisition
of Promethean FAST TV Exclusive License
We
recently entered into a perpetual license agreement with Promethean TV, Inc. (“Promethean”), the owner and developer of the
Ignite TV interactive video platform used for driving engagement and commerce. This license will form the basis for our Free Ad-supported
streaming TV (FAST) channel – Compasss.TV allowing for targeted advertising via video overlays, allowing the viewer to purchase
travel from their screen. This integrated technology is intended to boost engagement with customers driving ad-supported revenue and
travel transactions.
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Our
Fully Integrated Travel Booking Platform
We
have established a direct-to-consumer presence though a number of websites, powered by the NXT2.0 booking platform. Today, the primary
leisure platform is hosted on nexttrip.com and the media platform is hosted on travelmagazine.com.
NextTrip
sells travel services to leisure and corporate customers across these websites. Our primary focus is our current offerings of scheduling,
pricing and availability information for booking reservations for airlines, hotels, rental cars, as well as other travel products such
as transfers, sightseeing tours, shows and event tickets. NextTrip sells these travel services both individually and as components of
dynamically assembled packaged travel vacations and trips. In addition, we provide content that presents travelers with information about
travel destinations, maps and other travel details.
Our
online travel publication, travelmagazine.com, provides travelers around the world with inspiration for future vacation destinations
and trips. The publication offers written articles, videos, and podcasts. The website is expected to be supported by advertising and
allow for research and booking of vacation products.
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Travel
Products and Services
We
are building an ecosystem with technology and product offerings that will include leisure travel, wellness travel, business travel, alternative
lodging, technology and media solutions. We engage with consumers and distributors throughout the travel planning journey from initial
research through post-travel. Through direct relationships, we have established robust product offerings and preferred rates across the
top destinations world-wide. Our primary product offerings are as follows:
●
NextTrip
Travel brings travel solutions and a proprietary booking engine that allows customers to book customized travel, including vacation
packages, airline tickets, hotel reservations, tours and activities, curated journeys, wellness, business and group travel. Additionally,
we are developing a travel agent portal to drive bookings and travel agent brand loyalty across the leisure space.
●
NextTrip
Solutions offers technology solutions for product and inventory management as well as white label offerings including NextTrip products
under their brand, and technology solutions.
●
NextTrip
Media includes Travel Magazine and the Compass.TV experience, which is currently in development. These digital solutions engage consumers
at the initial phases of travel planning, offering relevant content, destination information and immersive online experiences as
well as solutions for travel suppliers. This ecosystem, once fully developed, is expected to allow users to create their own fully
customized FAST channel featuring vacation journey opportunities that customers can explore prior to booking the actual vacation.
Products
and Services for Travelers
Search
Tools and Ability to Compare . Our online marketplace nexttrip.com provides travelers with the tools to search for and filter several
travel products including air, accommodations, activities, and transportation based on various criteria, such as destination, travel
dates, type of property, number of travelers, amenities, price, or keywords.
Traveler
Login. Travelers are able to create accounts on our website(s) that give them access to their booking activity through the website.
Members will also have access to special rates and discounts on the NextTrip product.
Travel
Blog. Travel guides, videos and pictures as well as travel articles can be accessed through travelmagazine.com.
Security.
We use a combination of technology and human review to evaluate the content of listings and to screen for inaccuracies or fraud with
the goal of providing only accurate and trustworthy information to travelers. NextTrip is Payment Card Industry compliant to ensure the
safety and security of its customer credit card data.
Communication.
Travelers who create an account on our websites will receive regular communications, including notices about places of interest,
special offers, new listings, and an email newsletter. The newsletter will be available to any traveler who agrees to receive it and
offers introductions to new destinations and properties, as well as tips and useful information when traveling.
Since
the COVID-19 pandemic arose, we have primarily focused on developing our booking engine and establishing relationships with suppliers
to increase the size of our instantly bookable inventory. The booking engine has produced little revenue to date because of, among other
reasons, the efforts that have been taken to integrate the NextTrip travel platforms with the Bookit.com technology since its acquisition
in the summer of 2022. The new platform was launched in beta in May 2023 with a limited number of hotel properties in Mexico and the
Caribbean. We have expanded our distribution since launch to include over one million hotel properties worldwide and have completed a
full launch of the leisure travel website in May 2024.
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Key
Revenue Drivers
NextTrip’s
fully integrated travel booking platform serves as the foundation of our revenue-generating business. The platform contains a robust
booking engine with merchandising capabilities that drive increased conversions and higher per revenue transactions. We plan to leverage
the bookit.com foundational travel database consisting of 6 million customers to further drive revenues. Those revenues consist primarily
of commissions and bookings but are expanding to include affiliate commerce, advertising and sponsored content (via Compass.TV and Travel
Magazine).
In
addition, as the booking platform expands, it establishes an opportunity for product expansion and revenue from technology licensing,
including white-labeling key technology. A monthly software-as-a-service (SaaS) model is being established around key technology developments
and innovative platforms, including turn-key booking solutions, product management and targeted audience offerings.
Advancing
Travel: Future Research & Development Driving Growth
As
we expand the reach of our booking platforms, including to different underserved areas of the travel industry, we plan to focus on future
technologies to drive growth by investing in research and development.
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Compass.TV
As
Free Ad-Supported Streaming TV (FAST) gains momentum globally, we are in the process of developing Compass.TV, with a targeted launch
in the fall of 2024. Our innovative travel channel is being developed in conjunction with our perpetual license with Promethean discussed
above. With over 200 hours of relevant travel content secured, Compass.TV intends to utilize artificial intelligence (AI) to personalize
content, convert blogs and articles to video, and empower users to create custom travel channels. Integration with the NextTrip Concierge
desk will enable seamless booking and assistance.
NextTrip
recognizes the pivotal role of video in promoting travel sales and engagement, hence our focus on incorporating video across platforms.
To maximize effectiveness, NextTrip has entered into the license with Promethean enabling targeted advertising and transactional capabilities
without interrupting content. The Company has also established strategic partnerships for content, distribution and technology with key
players in the FAST space. This will enhance and accelerate the growth of our user base and enhance the opportunity for revenue generation
from the platform.
Travel
Magazine
We
are transforming our Travel Magazine website into a social media platform catering to all things travel. The site was re-launched mid-2024,
and features enhanced media capabilities and targeted advertising using the Promethean solution. A private consumer section called “MyBucketList,”
is targeted for release in the fall of 2024 and will feature connectivity to booking engines, AI travel planner assist and AI-driven
content creation.
My
Bucket List
With
My Bucket List, NextTrip is building a technology solution catered to travelers to build and share their own travel bucket list with
personalized suggestions, booking support and local insights.
Technology
and Infrastructure
Our
websites are hosted using cloud services distributed globally across multiple regions. Our systems architecture has been designed to
manage increases in traffic through additional computing power without making software changes. Our cloud services provide our online
marketplace with scalable and redundant Internet connectivity and redundant power and cooling to our hosting environments. We use security
methods to ensure the integrity of our networks and protection of confidential data collected and stored on our servers, and we have
developed and use internal policies and procedures to protect the personal information of travel suppliers and customers
using our websites that we collect and use as part of our normal operations. Access to our networks, and the servers and databases, on
which confidential data is stored, is protected by industry standard firewall and encryption technology. Physical access to our servers
and related equipment is secured by limiting access to the data center to operations personnel only.
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Competition
The
U.S. travel market is highly competitive and rapidly evolving. The markets are dominated by a few key distributors, which has caused
suppliers to look for viable alternatives that would diversify their business mix.
Our
competition, which is strong and increasing, includes online and offline travel companies that target leisure and corporate travelers,
including travel agencies, tour operators, travel supplier direct websites and their call centers, consolidators and wholesalers of travel
products and services, large online portals and search websites, certain travel metasearch websites, mobile travel applications, social
media websites, as well as traditional consumer eCommerce and group buying websites. These companies include Expedia, Booking.com, TripAdvisor,
Sabre Corp., and TravelZoo. In some cases, competitors are offering more favorable terms and improved interfaces to suppliers and travelers,
which make competition increasingly difficult. We also face competition for customer traffic on internet search engines and metasearch
websites, which impacts our customer acquisition and marketing costs.
Seasonality
We
experience seasonal fluctuations in the demand for our travel products and services. For example, traditional leisure travel bookings
are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. The
number of bookings typically decreases in the fourth quarter. Because revenue for most of our travel products is recognized when the
travel takes place rather than when it is booked, revenue typically lags bookings by several weeks to several months. As a result, although
travel bookings through NextTrip’s platforms tend to be highest from the period from January to June, moderate from July through
September and low from October through December, the majority of revenue is recognized in the summer months (June, July, and August),
and during the winter holidays (November and December).
Intellectual
Property
Our
intellectual property includes the content of our websites, registered domain names, registered and unregistered trademarks, business
plan, business strategies and trade secrets, proprietary and acquired software platforms and related assets, licensed software platforms,
and customer and third-party supplier lists. We believe that our intellectual property is an essential asset of our business and that
our registered domain names and our technology infrastructure will give us a competitive advantage in the online market and arrangements
with attractions and tour operators. We rely on a combination of trademark, copyright and trade secret laws in the United States, as
well as contractual provisions, to protect our proprietary technology and our brands. We also rely on copyright laws to protect the appearance
and design of our sites and applications. We have registered numerous Internet domain names related to our business in order to protect
our proprietary interests.
Regulation
Our
ability to provide our services and any future services is affected by legal regulations of governments and regulatory authorities around
the world, many of which are evolving and subject to revised interpretations. Violations of any laws or regulations could result in fines,
penalties, and criminal sanctions against us, our officers or employees, and prohibitions on how or where we conduct our business, which
could damage our reputation, brands, global expansion efforts, ability to attract and retain employees and business partners, business,
and operating results. Even if we comply with these laws and regulations, doing business in certain jurisdictions or violations of these
laws and regulations by the parties with which we conduct business runs the risk of harming our reputation and our brands. Regulations
that impact our business or our industry include:
●
Data Protection and Privacy : We have policies and a global governance framework to comply with privacy laws that apply to our
business, meet evolving stakeholder expectations, and support business innovation and growth. In the European Union, the General Data
Protection Regulation (the “GDPR”) imposes significant compliance obligations and costs. In the United States, the California
Consumer Privacy Act (the “CCPA”) and the California Privacy Rights Act (“CPRA”) impose privacy requirements
and rights for consumers in California that will result in additional compliance complexity, risks, and costs. Other U.S. states and
jurisdictions globally have adopted or may adopt similar data protection regulations. Some data protection and privacy laws afford consumers
a private right of action against companies like ours for certain statutory violations.
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●
Regulation of the Travel Industry : Our business is impacted by travel-related regulations such as local regulation of the use
of alternative accommodations. Local jurisdictions around the world have instituted a variety of measures to address the issues of “overtourism”
and the impact of tourism on the climate. As our business evolves, we expect to become subject to existing and new regulations. For example,
some parts of our business are already subject to certain requirements of the US Department of Transportation (DOT),
and as our offerings continue to diversify and expand, we may become subject to additional requirements of regulatory agencies across the world.
●
Payments : As we expand our payments services to consumers and business partners, we are subject to additional regulations, such
as financial services regulations and license requirements, which has resulted in increased compliance costs and complexities, including
those associated with the implementation of new or advanced internal controls. We are also subject to payment card association rules
and obligations under our contracts with payment card processors, including the Payment Card Industry Data Security Standard, compliance
with which is complex and costly.
Facilities
Our
principal executive offices are located at 3900 Paseo del Sol, Santa Fe, New Mexico 87507. The lease has a 6-month term which ends
on December 31, 2024. The landlord can terminate the lease upon 30 days written notice and NextTrip can terminate the lease upon 45
days written notice.
Human
Capital Resources
As
of August 31, 2024, we had 14 full-time employees and 13 independent contractors, We use independent contractors and temporary personnel
to supplement our workforce, particularly in the software development and technology tasks. Our employees are not represented by a labor
union, and we consider our employee relations to be very good. Competition for qualified personnel in its industry has historically been
intense, particularly for software engineers, developers, and other technical staff. Our human capital resources objectives include,
as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. We strive to
provide competitive compensation and benefits to our employees. Our benefit programs include bonuses, stock-based compensation awards,
a 401(k) plan with employer matching, healthcare and insurance benefits, flexible paid time off and other employee assistance programs.
The
principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through
the granting of stock-based compensation awards and cash-based performance bonus awards.
All
employees are responsible for upholding the NextTrip Code of Ethics and Business Conduct, which is important in delivering on our strategy.
We maintain a compliance hotline for the confidential reporting of any suspected policy violations or unethical business conduct on the
part of our businesses, employees, officers, directors, suppliers, or customers.
Global Conflicts
Current conflicts throughout the world, including
the Russia-Ukraine war and the Israel-Hamas war, could further impact the global economy, financial markets, and inflation. Due to the
uncertainty around the duration or outcome of the conflicts, we cannot predict the effect on our business.
We have no sales to Russia, Ukraine, or Israel, nor
do we have any assets, employees or third-party contractors in those countries.
Corporate
Information
Sigma was initially incorporated as Messidor Limited in Nevada on December 23, 1985, and changed its name to Framewaves Inc. in 2001. On September 27,
2010, the name was changed to Sigma Labs, Inc. On May 17, 2022, Sigma Labs, Inc. began doing business as Sigma Additive Solutions, and on August 9,
2022, changed its name to Sigma Additive Solutions, Inc. On March 13, 2024, we changed our name to NextTrip, Inc.
Our
principal executive offices are located at 3900 Paseo del Sol, Santa Fe, New Mexico 87507, and our current telephone number at that address
is (954) 526-9688. Our website address is www.nexttrip.com. The Company’s annual reports, quarterly reports, current reports on
Form 8-K and amendments to such reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and other information related to the Company, are available, free of charge, on that website
as soon as we electronically file those documents with, or otherwise furnish them to, the SEC. The Company’s website and the information
contained therein, or connected thereto, are not and are not intended to be incorporated into this Report.
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