Item 7. Management’s Discussion and Analysis
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Business
Overview
NextTrip
is an innovative technology company that is building next generation solutions to power the travel industry. NextTrip through its subsidiaries,
provides travel technology solutions with sales originating in the United States, with a primary emphasis on accommodations, hotels,
flights, wellness, and all-inclusive travel packages. Its proprietary booking engine, branded as NXT2.0, provides travel distributors
access to a sizeable inventory. NextTrip’s NXT2.0 booking technology was built upon a platform acquired in June 2022, which previously
powered the Bookit.com business, a well-established online leisure travel agent generating over $400 million in annual sales as recently
as 2019 (pre-pandemic).
Since
2022, NextTrip has been focused on the holistic integration of the NXT2.0 technology platform, which will serve as a base for current
and future technology projects as well as proprietary system enhancements. Through this strategic offering, NextTrip will focus on key
areas of opportunity in the travel sector and drive enhanced booking conversion rates. NextTrip’s proprietary technology, when
combined with media, product offerings and customer service, provides a unique lane to serve mid- to luxury travelers.
The
spread of the COVID-19 virus globally beginning in January 2020, severely impacted NextTrip’s business. Beginning in March 2020,
many U.S. states and foreign countries began issuing “stay-at-home” orders and closed their borders to interstate and international
travel. Such restrictions on travel, together with other measures implemented by governments around the world, severely restricted the
level of economic activity around the world and had an unprecedented effect on the global travel industry. The public’s ability
to travel was severely curtailed through border closures, mandated travel restrictions and limited operations of hotels, airlines, and
additional voluntary or mandated closures of travel-related businesses from December 2019 through the beginning of 2022 (and beyond in
some jurisdictions). Measures implemented during the COVID-19 pandemic led to unprecedented levels of temporary and permanent business
closures, cancellations and limited new travel bookings, having a severe negatively impacted on NextTrip’s business, financial
condition and results of operations.
26
Due
to the significant decrease in demand for the travel related services provided by NextTrip during the peak of the COVID-19 pandemic,
NextTrip shifted its focus to developing and enhancing its program offerings. For example, it enhanced the functionality of its booking
engines, including developing a booking engine platform that allows customers to book packaged vacations and cruises along with a platform
to arrange and manage business travel.
Prior
to the reverse acquisition of Sigma, NextTrip Holdings, Inc. (“NextTrip”) was a wholly owned subsidiary of NextTrip
Group, LLC (“Group”), which in turn, was a wholly owned subsidiary of NextPlay Technologies, Inc.
(“NextPlay”). All of the business operations of Group were conducted through its subsidiaries. On January 25, 2023,
NextPlay and Group entered into an Amended and Restated Separation Agreement (“Separation Agreement”), Amended and
Restated Operating Agreement (“Operating Agreement”), and Exchange Agreement (“Exchange Agreement”),
together the Agreements (“Agreements”), whereby NextPlay transferred their interest in the travel business to Group.
Pursuant to the Exchange Agreement, NextPlay exchanged 1,000,000 Membership Units of Group for 400,000 Preferred Units of Group,
with a value of $10 per unit. Prior to the exchange for Preferred Units, Group had a payable due to NextPlay of $17,295,873,
representing cash advances and payment of expenses by NextPlay on behalf of Group, while NextPlay had obligations to provide ongoing
support to NextTrip. Such liability was settled by the issuance of the Preferred Units and the waiver of all of NextPlay’s
ongoing support obligations except for a $1.5 million advance remaining under a promissory note and as such NextTrip recorded the
payable as contributed capital.
NextTrip
completed the reverse acquisition of Sigma on December 29, 2023. Sigma traded on Nasdaq as SASI which has had a name change to NextTrip,
Inc. and now trades as NTRP on Nasdaq.
As
per the acquisition with Sigma as noted above, the 400,000 Preferred shares will be exchanged for common shares in NextTrip, Inc. 13,001
Closing Shares were issued to NextPlay on December 29, 2023, and 486,999 Contingent Shares will be issued when and if the business milestones
are achieved.
NextTrip
has accounted for the reverse merger as NextTrip being the accounting acquirer and will report the financial results as such on a going
forward basis. The capital section reflected in the financial statements are that of NextTrip, Inc. and the operating results are that
of the accounting acquirer’s financials. All assets, liabilities and results of operations assumed in the transaction are the basis
of the financial information discussed in this Management’s Discussion and Analysis of Financial Conditions and Results of Operations,
as well as the financial statements of NextTrip included elsewhere in this Report.
Critical
Accounting Policies and Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported assets, liabilities, sales and expenses in the accompanying financial statements.
Critical accounting policies are those that require the most subjective and complex judgments, often employing the use of estimates about
the effect of matters that are inherently uncertain. By their nature, changes in these assumptions and estimates could significantly
affect our financial position or results of operations. Significant accounting estimates that may materially change in the near future
are revenue recognition, impairment of long-lived assets, values of stock compensation awards and stock equivalents granted as offering
costs, and allowance for bad debts. Such critical accounting policies, including the assumptions and judgments underlying them, are disclosed
in Note 1 to the Financial Statements included in this Annual Report. However, we do not believe that there are any alternative methods
of accounting for our operations that would have a material effect on our financial statements.
The
critical accounting policies and estimates addressed below reflect our most significant judgements and estimates used in the preparation
of our financial statements.
Basis
of Presentation and Principles of Consolidation
NextTrip’s
financial statements and related disclosures are prepared pursuant to the rules and regulations of the SEC for annual financial statements,
as applicable. The Financial Statements have been prepared using the accrual basis of accounting in accordance with GAAP.
The
financial statements of NextTrip have been prepared on a consolidated basis with those of its wholly owned subsidiaries. All intercompany
transactions and balances have been eliminated in consolidation.
27
Use
of Estimates
The
preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated
financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates. These differences could have a material effect on NextTrip’s future results of operations and financial position.
Significant items subject to estimates and assumptions include the carrying amounts of intangible assets, depreciation and amortization.
Information
about key assumptions and estimation uncertainty that has a significant risk of resulting in a material adjustment to the carrying amounts
of NextTrip’s assets and liabilities within the next financial year are referenced in the notes to the financial statements as
follows:
●
The
assessment of NextTrip’s ability to continue as a going concern;
●
The
measurement and useful life of intangible assets and property and equipment; and
●
Recoverability
of long-lived assets
Receivables
Trade
accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s
best estimate of the amount of probable credit losses in its existing accounts receivable.
The
Company considers trade accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts is required. If
amounts become uncollectible, they will be charged to operations when that determination is made.
Trade
accounts receivable balances as of February 29, 2024 and February 28, 2023, were $34,082 and $0, respectively.
Receivables
from NextPlay under the promissory note as described in NOTE 1 – Business Description and Going Concern were $2,567,665
and $1,933,908 respectively. Management has determined that, since NextPlay is in default under the terms of the promissory note, collectability
of the entire related party receivable as of February 29, 2024 is uncertain, and has therefore established an allowance for doubtful
accounts of $1,567,665. As of February 28, 2023, no allowance for doubtful accounts was established.
Intangible
Assets
NextTrip
measures separately acquired intangible assets at cost less accumulated amortization and impairment losses. NextTrip recognizes internally
developed intangible assets when it has determined that the completion of such is technically feasible, and it has sufficient resources
to complete the development. Subsequent expenditures are capitalized when they increase the future economic benefits of the associated
asset. All other expenditures are recorded in profit or loss as incurred.
NextTrip
assesses whether the life of intangible assets is finite or indefinite. NextTrip reviews the amortization method and period of use of
its intangible assets at least annually. Changes in the expected useful life or period of consumption of future economic benefits associated
with the asset are accounted for prospectively by changing the amortization method or period as a change in accounting estimates in profit
or loss. NextTrip has assessed the useful life of its trademarks as indefinite.
The
estimated useful lives for NextTrip’s finite life intangible assets are as follows:
Category
Method
Estimated
useful life
Software
Straight
line
3
years
Software
licenses
Straight
line
0.5
- 4 years
Software
Development Costs
NextTrip
capitalizes internal software development costs subsequent to establishing technological feasibility of a software application in accordance
with guidelines established by “ASC 985-20-25” Accounting for the Costs of Software to Be Sold, Leased, or Otherwise Marketed,
requiring certain software development costs to be capitalized upon the establishment of technological feasibility. The establishment
of technological feasibility and the ongoing assessment of the recoverability of these costs require considerable judgment by management
with respect to certain external factors such as anticipated future revenue, estimated economic life, and changes in software and hardware
technologies. Amortization of the capitalized software development costs begins when the product is available for general release to
customers. Capitalized costs are amortized based on the straight-line method over the remaining estimated economic life of the product.
28
Impairment
of Intangible Assets
In
accordance with ASC 350-30-65 “Goodwill and Other Intangible Assets”, NextTrip assesses the impairment of identifiable intangible
assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors it considers important,
which could trigger an impairment review include the following:
1.
Significant underperformance compared to historical or projected future operating results;
2.
Significant changes in the manner or use of the acquired assets or the strategy for the overall business; and
3.
Significant negative industry or economic trends.
When
NextTrip determines that the carrying value of an intangible asset may not be recoverable based upon the existence of one or more of
the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, NextTrip
records an impairment charge. NextTrip measures any impairment based on a projected discounted cash flow method using a discount
rate determined by management to be commensurate with the risk inherent to the current business model. Significant management judgment
is required in determining whether an indicator of impairment exists and in projecting cash flows. Intangible assets that have finite
useful lives are amortized over their useful lives.
Leases
NextTrip
adopted ASU 2016-02 (Topic ASC 842) Leases, which requires a lessee to recognize a lease asset and a leases liability for operating leases
arrangements greater than twelve months.
We
determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”)
assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. Finance leases are
included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets.
ROU
assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease
payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present
value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental
borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement
date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include
options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments
is recognized on a straight-line basis over the lease term.
Revenue
Recognition
NextTrip
recognizes revenue in accordance with ASC 606 which involves identifying the contracts with customers, identifying performance obligations
in the contracts, determining transactions price, allocating transaction price to the performance obligation, and recognizing revenue
when the performance obligation is satisfied.
NextTrip
recognizes revenue when the customer has purchased the product, the occurrence of the earlier of date of travel or the date of cancellation
has expired, as satisfaction of the performance obligation, the sales price is fixed or determinable and collectability is reasonably
assured. Revenue for customer travel packages purchased directly from NextTrip are recorded gross (the amount paid to NextTrip by the customer is shown as revenue and the cost of providing the respective travel package is recorded to cost of revenues).
NextTrip
generates revenues from sales directly to customers as well as through other distribution channels of tours and activities at destinations
throughout the world.
NextTrip
controls the specified travel product before it is transferred to the customer and is therefore a principal, including but not limited
to, the following:
●
NextTrip
is primarily responsible for fulling the promise to provide such travel product.
●
NextTrip
has inventory risk before the specified travel product has been transferred to a customer or after transfer of control to a customer.
●
NextTrip
has discretion in establishing the price for the specified travel product.
Payments
for tours or activities received in advance of services being rendered are recorded as deferred revenue and recognized as revenue at
the earlier of the date of travel or the last date of cancellation (i.e., the customer’s refund privileges lapse).
From
time to time, payments are made to suppliers in advance of customer bookings as required by hotels. These payments are recognized as
costs of goods at the earlier of the date of travel or the last date of cancellation.
29
Stock-Based
Compensation
We
measure the compensation costs of stock-based compensation arrangements based on the grant-date fair value and recognize the costs in
the financial statements over the period during which employees are required to provide services. Stock-based compensation arrangements
may include stock options, grants of shares of common stock with and without restrictions, performance-based awards, share appreciation
rights and employee share purchase plans. Stock-based compensation is measured on the date of grant at its fair value.
Equity
instruments issued to non-employees are recorded on the basis of the grant date fair value of the instruments. In general, the measurement
date is either (a) when a performance commitment, as defined, is reached or (b) the earlier of the date that (i) the non-employee performance
requirement is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period
based on the facts and circumstances of each particular grant.
The
grant date fair value of stock-based compensation and other equity instruments is calculated using the Black Scholes valuation model,
and requires estimates of several inputs to the model, including risk-free interest rates, dividends, and expected volatility of our
stock price.
Results
of Operations
Year
Ended February 29, 2024 Compared to the Year Ended February 28, 2023
Revenue
During
the year ended February 29, 2024, NextTrip recognized revenue of $458,752 as compared to $382,832 in the same period in 2023, an increase
of $75,920, or 19.8%. The increase was a result of the continued implementation of the company’s booking engine.
Cost
of Revenue
Cost
of revenue for the year ended February 29, 2024, was $397,532 as compared to $354,921 for the same period in 2023, an increase of $42,611,
or 12%. The increase was attributable to the increase in revenue in the year ended February 29, 2024, as compared to the same period
in 2023.
Operating
Expenses
Operating expenses totaled $5,740,577 for the year ended February 29, 2024,
versus $4,979,766 for the year ended February 28, 2023. The increase of $760,811, or 15.3% was due to an increase in professional service
fees of $806,076, an increase in depreciation and amortization of $761,524, an increase in other operating expenses of $91,838, stock
based compensation of $116,512, and organization costs of $25,000. Partially offsetting these increases were a decrease in salaries and
benefits of $519,809, a decrease in general and administrative expenses of $57,455, a decrease in sales and marketing expenses of $222,887,
and a decrease in technology expenses of $239,988.
Salaries
and Benefits
Salaries
& Stock based compensation expenses were $1,604,487 for the year ended February 29, 2024, as compared to $2,124,296 for the same
period in 2023. The decrease of $519,809 or 24.5% was the result of a reduction in the number of employees which was offset by the increase
in professional contracted staff.
Stock
Based Compensation
Stock
based compensation totaled $116,512 for the year ended February 29, 2024, versus $0 for the year ended February 28, 2023. The increase
was attributable to expense associated with the assumption of Sigma’s outstanding stock options upon completion of the reverse
merger transaction.
Loss
on Promissory Note Receivable .
The
loss of $1,567,665 on the promissory note receivable for the year ended February 29, 2024 is attributable to the establishment of a reserve
taken on the total outstanding balance due from NextPlay of $2,567,665. Management has determined that, since NextPlay is in default
under the terms of its promissory note, collectability of the entire related party receivable as of February 29, 2024 is uncertain. As
of February 28, 2023, no allowance for doubtful accounts was established.
General
and Administrative Expense
General
and administrative expense for the year ended February 29, 2024 was $152,106, versus $209,561, a decrease of $57,455. The decrease was
primarily attributable to a reduction in rent expense of $28,000 and a decrease in medical insurance premiums due to fewer employees
in fiscal 2024 as compared to fiscal 2023.
Sales
and Marketing Expense
Sales
and marketing expenses were $484,250 for the year ended February 29, 2024, as compared to $707,137 for the same period in 2023. The decrease
of $222,887 or 31.5% was primarily related to reduced marketing costs during the booking engine enhancement upgrade.
Professional
Service Fees
Professional
Service Fees were $1,421,508 for the year ended February 29, 2024, as compared to $615,432 for the same period in 2023. The increase
of $806,076 or 131% was the result of an increase in the number of professional contracted staff and an increase in legal costs associated
with various public company filings.
Technology
Technology
expenses for the year ended February 29, 2024 were $311,430, as compared to $551,418 for the year ended February 28, 2023. The
decrease of $239,988, or 43.5% was primarily attributable to a decrease in website maintenance and bug fixes of $137,258, a decrease
in software licensing expenses of $41,215 due to renegotiation of licensing agreements and adoption of more cost-effective
solutions, a decrease of $13,420 in cloud database and networking expenses related to optimization of our cloud infrastructure, and
a decrease in software hosting expenses of $83,109 due to consolidation of services. Partially offsetting these decreases was an
increase in dues and subscriptions of $7,888 in new services to support the Company’s operations, and an increase of $29,341
in expenses associated with maintenance and support of the Company’s technology infrastructure.
Organization
Costs
Organization
costs were $25,000 for the year ended February 29, 2024, as compared to $0 for 2023. The increase is attributable to compensation expense
for our directors subsequent to the reverse acquisition of Sigma on December 29, 2023.
Depreciation
and Amortization
Depreciation
and amortization expense for the year ended February 29, 2024, was $1,468,762 as compared to $707,238 for the same period in 2023, an
increase of $761,524 or 107.6%. The increase was primarily the result of amortization of software additions during the year as well as
amortizing certain software purchases, in particular the BookIt.com asset, over a shorter period due to its estimated useful life.
Other
Expenses
Other
expenses totaled $156,522 for the year ended February 29, 2024, as compared to $64,684 for the year ended February 28, 2023. The increase
of $91,838, or 142.0% was primarily due to an increase in D&O insurance premiums.
30
Other
Income (Expense)
Other
expense was $977,480 for the year ended February 29, 2024, as compared to other expense of $81,641 for the same period in 2023. The
increase of $895,839 was primarily due to the loss on the promissory note receivable of $1,567,665, partially offset by other income
in the amount of $486,633 of which $479,460 was due to the reversal of accrued expenses. Such reversal was offset by the allocation
of expenses to the appropriate expense accounts. Additionally, the gain on the extinguishment of liability in the amount of $166,889
resulted from the exchange of a consulting expense for the issuance of common shares.
The
net loss of $14,718 on the disposal of assets was due to a reduction in goodwill of $52,310, partially offset by a gain of $37,592
on the sale of assets to Divergent, and the decrease in interest expense of $23,251 was due
to the conversion of convertible notes to common shares on December 29, 2023.
Net
Loss From Continuing Operations
In
the year ended February 29, 2024, the net loss from continuing operations totaled $6,656,837 as compared to a net loss from
continuing operations of $5,033,496 for the year ended February 28, 2023. The operating loss component increased by $727,502 in
2024, and the other loss component increased by $895,839.
Net
Loss From Discontinued Operations
The
net loss from discontinued operations of $675,314 for the year ended February 29, 2024 consisted primarily of expenses incurred attributable
to the legacy business operations of Sigma, and were comprised of $528,930 in retention bonuses paid to former Sigma employees, salaries
and benefits of $28,475, severance of $62,500 and organization and other expenses of $60,415. Partially offsetting these expenses was
$5,006 in revenue related to a maintenance contract.
Net
Loss Applicable to Common Shareholders
The
net loss applicable to common shareholders totaled $7,339.276 for the year ended February 29, 2024, as compared to $5,033,496 for the
year ended February 28, 2023. Preferred dividends were $7,125 in 2024 and $0 in 2023.
Liquidity
and Capital Resources
Due
to uncertainties regarding our ability to meet our current and future operating and capital expenses, there is substantial doubt about
our ability to continue as a going concern for 12 months from the date of the filing of this Annual Report, and the report of our registered
independent public accounting firm on our financial statements as of and for the year ended February 29, 2024 included in Item 15 of
this Annual Report contains a going concern qualification.
As
of February 29, 2024, NextTrip had $323,805 in cash, an accumulated deficit of $24,151,139 and a working capital deficit of $245,005
compared to $282,475 in cash, an accumulated deficit of $16,811,863 and a working capital deficit of $2,310,654 as of February 28, 2023.
To
date, NextTrip has financed its operations primarily through revenue generated from operations, the issuance of convertible debt, advances from related parties,
and private placements of its securities.
On
March 15, 2024, the Company’s Board of Directors approved the Company to enter into an unsecured promissory note for a line of
credit with Messrs. Monaco and Kerby, the Company’s Chairman of the Board of Directors and Chief Executive Officer, respectively,
for the aggregate principal amount of $500,000. Under the terms of the note, advances under the line of credit may be made at the Company’s
request until May 31, 2024. The note bears an annual interest rate of 7.5% and matures on February 28, 2025, and may be prepaid by the
Company at any time prior to maturity without penalty. As of April 19, 2024, the full principal amount of the note had been advanced
to the Company and remains outstanding.
On
April 25, 2024, the Company’s Board of Directors approved the Company to enter into a series of unsecured promissory notes with
certain related parties, including investors, directors, officers and employees, who shall individually provide funds for the aggregate
principal amount of $1,000,000. The notes bear an annual interest rate of 7.5% and shall mature one year from the date of each note’s
execution and may be prepaid by the Company at any time prior to maturity without penalty. As of July 10, 2024, the full principal amount
of $1,000,000 had been advanced to the Company and remains outstanding.
NextTrip
will need to raise additional funds through equity or debt financings or other means to support its on-going operations, increase market
penetration of its products, expand the marketing and development of its travel and technology driven products, provide capital expenditures
for additional equipment and development costs, payment obligations, and systems for managing the business including covering other operating
costs and maintaining compliance with NASDAQ listing requirements until planned revenue streams are fully implemented and begin to offset
the Company’s operating costs. The Company estimates that it will require a minimum of $5.5 million to continue operations for the next twelve months.
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
and operations. To the extent that funds are not available to us, we may be required to delay, limit, or terminate our business and operations
and lose our NASDAQ listing.
31
Net
Cash Used in Operating Activities
Net
cash used in operating activities from continuing operations during the year ended February 29, 2024, was $5,056,095 as compared to $3,792,600
during the same period in 2023, an increase of $1,263,495 or 33.3%.
During
the year ended February 29, 2024, the net cash used in operating activities from continuing operations was the result of a net loss
of $6,656,837, partially offset by changes in working capital of $1,400,025 and non-cash expenses of $3,000,767. The non-cash
expenses were primarily comprised of depreciation and amortization of $1,468,762 and the loss of $1,567,665 on the related party
receivable. Changes in working capital were driven by an increase in accounts receivable of $662,939, an increase in prepaid expenses of $281,506, an increase in security
deposits of $27,167, and a decrease in accounts payable and accrued expenses of $531,367, partially offset by an increase in deferred
revenue of $102,954.
Net
cash used in operating activities from discontinued operations during the year ended February 29, 2024, was $675,314 as compared to $0
during the same period in 2023, and was related to wind down expenses associated with the legacy Sigma business.
As
a result, total net cash used in operating activities increased by $1,938,809 during the year ended February 29, 2024, to $5,731,409
as compared to $3,792,600 during the same period in 2023, an increase of 51.1%.
During
the year ended February 28, 2023, the net cash used in operating activities was the result of a net loss of $5,033,496, partially offset
by changes in working capital of $521,490 and non-cash expenses of $719,406, primarily related to depreciation and amortization. Changes in working
capital were driven by a decrease in accounts receivable of $5,503, a decrease in prepaid expenses of $48,796, an increase in accounts
payable and accrued expenses of $533,193, a decrease in deferred revenue of $46,855 and an increase in right of use asset in the amount
of $18,697.
Net
Cash Provided (Used) in Investing Activities
Net
cash provided by investing activities during the year ended February 29, 2024, was $980,936, which compares to net cash used by
investing activities of $4,290,930 during the same period of 2023, an increase of $5,271,865. The primary causes for the increase
resulted from the reverse acquisition of Sigma, which provided cash of $417,122, and the subsequent sale of Sigma’s legacy
assets to a third party, which generated an additional $1,589,241 in cash. Further contributing to the increase were decreases in
capitalized software development costs of $1,337,919 and a decrease in the related party promissory note of $1,933,908. These increases were partially offset by an increase in the purchases of equipment of
$6,325.
Net
Cash Provided by Financing Activities
NextTrip
raised $4,791,804 in net proceeds during the year ended February 29, 2024, consisting of $735,037 from the issuance of convertible
notes, $1,905,970 from the issuance of common shares, $1,603,500 from the issuance of preferred shares, and $547,277 from related
party advances. For the year ended February 28, 2023, the Company raised $8,134,955 in net proceeds consisting of advances to the
company by related parties of $4,901,452 and proceeds from the issuance of convertible notes of $3,233,503.
Inflation,
changing prices and rising interest rates have had no material effect on NextTrip’s continuing operations over our two most recent
fiscal years.
We
have no off-balance sheet arrangements as defined in Item 303(a) of Regulation S-K.
32
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not
applicable.
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The
financial statements included in Item 15 are incorporated herein by reference.
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.