NTRP filing — read by section

Item 2. Management’s Discussion and Analysis

ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 

 Forward-looking
statements 

 This
Quarterly Report on Form 10-Q for the quarter ended August 31, 2025 (this “Quarterly Report”) contains “Forward-Looking
Statements.” All statements other than statements of historical fact are “Forward-Looking Statements” including but
not limited to, statements regarding our expectations about development and commercialization of our technology, any projections of revenues
or statements regarding our anticipated revenues or other financial items, any statements of the plans and objectives of management for
future operations, any statements concerning proposed new products or services, any statements regarding future economic conditions or
performance, and any statements of assumptions underlying any of the foregoing. All Forward-Looking Statements included in this Quarterly
Report are made as of the date hereof and are based on information available to us as of such date. We assume no obligation to update
any Forward-Looking Statement. In some cases, Forward-Looking Statements can be identified by the use of terminology such as “may,”
“will,” “expects,” “plans,” “anticipates,” “intends,” “believes,”
“estimates,” “potential,” or “continue,” or the negative thereof or other comparable terminology.
Although we believe that the expectations reflected in the Forward-Looking Statements contained herein are reasonable, there can be no
assurance that such expectations or any of the Forward-Looking Statements will prove to be correct, and actual results could differ materially
from those projected or assumed in the Forward-Looking Statements. Future financial condition and results of operations, as well as any
Forward-Looking Statements are subject to inherent risks and uncertainties, including factors referred to in our press releases and reports
filed with the Securities and Exchange Commission (the “SEC”). All subsequent Forward-Looking Statements attributable to
the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Additional factors
that may have a direct bearing on our operating results are described under the caption “Risk Factors” in our Annual Report
on Form 10-K for the year ended February 28, 2025 and elsewhere in this Quarterly Report. 

 Corporation
Information 

 Sigma
Additive Solutions, Inc. (“Sigma”), the legal acquiror of NextTrip, 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 11, 2024, Sigma filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation, as amended to date, with
the Secretary of State of the State of Nevada, pursuant to which, effective as of 12:01 a.m. Pacific time on March 13, 2024, among other
things, Sigma’s corporate name was changed from Sigma Additive Solutions, Inc. to “NextTrip, Inc.” 

 Our
principal executive offices are located at 3900 Paseo del Sol, Santa Fe, New Mexico 87507, and our telephone number 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 our website. The Company’s
website and the information contained therein, or connected thereto, are not and are not intended to be incorporated into this Quarterly
Report. 

 The
Company provides travel technology solutions with sales originating in the United States, with a primary emphasis on hotels, air, and
all-inclusive travel packages. Our proprietary booking engine, branded as NextTrip 2.0, provides travel distributors access to a sizeable
inventory. 

 The
Company owns 50% of Next Innovation LLC, a Joint Venture (“Next Innovation”), which is dormant. No activities nor operations
occurred through Next Innovation in fiscal years 2024 or 2025 for this entity, and the Company does not have control of Next Innovation
and therefore no minority interest was recorded. 

 36 

 Reverse
Acquisition 

 On
October 12, 2023, the Company (then known as Sigma) entered into a Share Exchange Agreement (the “Exchange Agreement”) with
NextTrip Holdings, Inc. (“NTH”), NextTrip Group, LLC (“NTG”), and William Kerby (the “NTH Representative”),
pursuant to which the Company acquired NTH (the “NextTrip Acquisition”) in exchange for shares of our common stock, which
we refer to as the Exchange Shares. The NextTrip Acquisition was consummated on December 29, 2023. As a result, NTH became a wholly-owned
subsidiary of the Company. 

 Upon
the closing of the NextTrip Acquisition, the shareholders of NTG (collectively, the “NTG Sellers”), were issued a number
of Exchange Shares equal to 19.99%, or 156,007 shares, of our issued and outstanding shares of common stock immediately prior to the
closing. Under the Exchange Agreement, the NTG Sellers were entitled to receive additional shares of our common stock, referred to as
the Contingent Shares, subject to NTH’s achievement of future business milestones (the “Milestone Events”) specified
in the Exchange Agreement as follows: 

 Milestone
 Event 
 
 Date
 Earned 
 
 Contingent
 Shares 
 
 Status
 as of the date of this Report 

 Launch
 of NTH’s leisure travel booking platform by either (i) achieving $1,000,000 in cumulative sales under its historical “phase
 1” business, or (ii) commencement of its marketing program under its enhanced “phase 2” business. 
 
 As
 of a date six months after the closing date 
 
 1,450,000
 Contingent Shares 
 
 Achieved.
 Marketing program under “phase 2” has commenced. 

 Launch
 of NTH’s group travel booking platform and signing of at least five (5) entities to use the Groups Platform. 
 
 As
 of a date nine months from the closing date (or earlier date six months after the closing date) 
 
 1,450,000
 Contingent Shares 
 
 Achieved.
 Five groups have been contracted to use the Groups Platform. 

 Launch
 of NTH’s Travel Agent Platform and signing up of at least 100 travel agents to the platform (which calculation includes individual
 agents of an agency that signs up on behalf of multiple agents). 
 
 As
 of a date 12 months from the closing date (or earlier date six months after the closing date) 
 
 1,450,000
 Contingent Shares 
 
 Achieved.
 The company has signed up more than 175 travel agents to its Travel Agent Platform. 

 Commercial
 launch of PayDlay technology in the NXT2.0 system. 
 
 As
 of a date 15 months after the closing date (or earlier date six months after the closing date) 
 
 1,650,000
 Contingent Shares, less the Exchange Shares issued at the closing of the Acquisition 
 
 Achieved.
 PayDlay has been commercially launched. 

 The
Contingent Shares, together with the shares of our common stock issued at the closing, was not to exceed 6,000,000 shares of our common
stock, or approximately 90.2% of our issued and outstanding shares of common stock immediately prior to closing. 

 37 

 The
Exchange Agreement provided that William Kerby, the Chief Executive Officer and co-founder of NTH, was appointed as Chief Executive Officer
of the Company and Donald P. Monaco was appointed as a director of the Company as of the closing of the NextTrip Acquisition. Additionally,
pursuant to the Exchange Agreement, the NTH Representative (Mr. Kerby) shall be entitled to designate a replacement for one additional
director of the Company upon achievement of each of the milestones under the Exchange Agreement (the “Board Appointment Rights”). 

 In
connection with the NextTrip Acquisition, the Company and Nasdaq determined that the issuance of Contingent Shares upon achievement of
any one of the Milestone Events would result in a change in control of the Company under Nasdaq Listing Rule 5635(a). Pursuant to Nasdaq
Listing Rule 5110(a), the Company was required to submit an initial listing application with Nasdaq and to obtain Nasdaq approval of
the initial listing application prior to the issuance of the Contingent Shares. 

 On
March 25, 2025, the Company received a letter from Nasdaq notifying the Company that it had approved the Company’s initial listing
application in connection with the issuance of the Contingent Shares. On March 26, 2025, the Company issued the NTG Sellers an aggregate
of 4,393,993 of the Contingent Shares in satisfaction of the Company’s obligations under the Exchange Agreement. As a result of
Nasdaq’s approval of our initial listing application, the issuance of the Contingent Shares was completed in compliance with Nasdaq
Listing Rule 5110(a) and the Company’s shares of common stock continue to trade on the Nasdaq Capital Market under the symbol “NTRP.” 

 On
May 5, 2025, as a result of the achievement of the fourth and final business milestone, the remaining 1,450,000 Contingent Shares were
issued to the NTG Sellers. No additional shares are issuable pursuant to the Exchange Agreement as of the date of this Quarterly Report. 

 In
July 2025, Mr. Kerby, in his capacity as the NTH Representative, informed the Company of his election to exercise the Board Appointment
Rights pursuant to the Exchange Agreement and designated Stephen Kircher, Jimmy Byrd, Carmen Diges and David Jiang (collectively, the
“NTH Appointees”) as the individuals to replace the continuing legacy Sigma directors. On July 14, 2025, the Company’s
Board of Directors appointed the NTH Appointees as directors of the Company, in each case effective July 28, 2025, at which time Salvatore
Battinelli, Jacob Brunsberg, Dennis Duitch and Kent Summers resigned as directors of the Company. Stephen Kircher shall serve as a Class
I director, with his initial term expiring at the Company’s 2028 Annual Meeting of Stockholders; Jimmy Byrd shall serve as a Class
II director, with his initial term expiring at the Company’s 2026 Annual Meeting of Stockholders; and Ms. Diges and Mr. Jiang shall
each serve as a Class III director, with their initial terms expiring at the Company’s 2027 Annual Meeting of Stockholders. Each
of NTH Appointees will serve as a director for the balance of their respective initial terms, and until his or her successor is elected
and qualified, subject to his or her earlier death, resignation or removal. 

 38 

 Critical
Accounting Policies and Estimates 

 The
preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”)
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 and inventory obsolescence. Such critical accounting policies, including the assumptions
and judgments underlying them, are disclosed in Note 1 of the Notes to Financial Statements included in this Quarterly 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. 

 Revenue
Recognition – The Company 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. 

 The
Company recognizes revenue when the customer has purchased the product, the occurrence of the earlier of date of travel or the date of
cancellation has expired, as satisfaction of the performance obligation, the sales price is fixed or determinable and collectability
is reasonably assured. Revenue for customer travel packages purchased directly from the Company are recorded gross (the amount paid to
the Company by the customer is shown as revenue and the cost of providing the respective travel package is recorded to cost of revenues). 

 The
Company generates revenues from sales directly to customers as well as through other distribution channels of tours and activities at
destinations throughout the world. 

 The
Company controls the specified travel product before it is transferred to the customer and is therefore a principal, based on but not
limited to, the following: 

 ●
 
 The
 Company is primarily responsible for fulling the promise to provide such travel product. 

 ●
 
 The
 Company has inventory risk before the specified travel product has been transferred to a customer or after transfer of control to
 a customer. 

 ●
 
 The
 Company 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). 

 Investments
in Equity Securities without Readily Determinable Fair Value 

 In
accordance with ASC 321-10-35-2, the Company holds certain investments in equity securities in which the Company does not have significant
influence or control, and for which fair value is not readily determinable. These investments are primarily accounted for at cost, less
any impairment. The carrying amount is periodically evaluated for impairment, and if necessary, an impairment loss is recognized in the
statement of operations. These investments are not adjusted for unrealized gains or losses unless an impairment is identified. 

 39 

 For
investments in non-public entities where fair value is not determinable, the Company does not adjust the carrying value for changes in
fair value, except for impairment losses. The fair value of these investments is disclosed when it is practicable to determine. 

 Promissory
Note Receivable 

 Pursuant
to the terms of the Promissory Note (the “NextPlay Note”) between NTH and NextPlay Technologies, Inc. (“NextPlay”),
the NextPlay Note was due and payable in full on the earlier of September 1, 2023 or the date the Company completed a financing of $10
million or more. No payments have been made by NextPlay, and as such NextPlay is in default under the terms of the NextPlay Note. 

 On
January 27, 2025, as creditors of NextPlay, Donald P. Monaco, the Company’s Chairman, William Kerby, the Company’s Chief
Executive Officer, and Ian Sharpe, the Chief Operating Officer of the Company’s Media division, filed a petition to force NextPlay
into involuntary bankruptcy as a result of unpaid fees. The proceedings are ongoing and the outcome at this time is uncertain and cannot
be predicted. As a result, management has determined that the collectability of the NextPlay Note is uncertain and has therefore established
an allowance for credit losses for the entire balance of $2,567,665. 

 Fair
Value Measurements 

 We
measure certain financial instruments at fair value, which requires management to make estimates and assumptions. For most items such
as cash, receivables, and payables, fair value is straightforward because of their short-term nature. However, two obligations we assumed
in connection with our acquisition of TA Pipeline LLC involve more judgment and could have a meaningful effect on our results. 

 ● 
 Put
 Option – The restricted shares issued in the acquisition give the sellers the right, under certain conditions, to require us
 to either repurchase the shares, issue additional shares, or make a cash payment if our stock trades below a set price. We record
 this obligation as a liability, and its value changes with movements in our stock price and related assumptions. 

 ● 
 TA
 Milestone Payment – We also agreed to make an additional payment to the sellers based on TA Pipeline revenue during the first
 year after closing. This payment, which will be made in both cash and stock, is also recorded as a liability and depends on our projections
 for TA Pipeline’s performance. 

 Because
the fair value of these obligations depends on factors outside of our control, such as our stock price and TA Pipeline’s revenues,
the amounts we record may change from period to period. For example, a change in our assumed stock price volatility could change the
value of the Put Option liability, while a similar change in projected revenues could affect the Milestone Payment liability. 

 Stock
Based Compensation 

 We
grant stock options, restricted stock, and other equity-based awards to employees, executives, directors, and consultants. The fair value
of these awards is measured on the grant date and recognized as compensation expense over the vesting period. 

 Determining
the fair value of stock options requires the use of valuation models, such as the Black-Scholes model, which involve assumptions about
stock price volatility, expected term of the option, risk-free interest rates, and dividend yields. These assumptions are based on historical
data and market conditions but involve judgment about future trends. 

 Because
changes in these assumptions can significantly affect the estimated fair value, our stock-based compensation expense could vary materially
from period to period. For instance, higher assumed volatility or longer expected option lives generally increase the fair value of options,
leading to higher compensation expense. 

 40 

 Goodwill
and Intangible Assets 

 We
record goodwill and intangible assets in connection with business acquisitions. Goodwill represents the excess of the purchase price
over the fair value of the net assets acquired. Intangible assets primarily include trade names, customer and supplier relationships,
and technology. 

 We
review goodwill and indefinite-lived intangible assets for impairment at least annually, or more frequently if events or changes in circumstances
indicate that the carrying value may not be recoverable. This process requires management to make assumptions and estimates which involve
significant judgment. Changes in assumptions could materially affect whether an impairment is recognized and the amount of any impairment
charge. 

 Business
Overview 

 NextTrip
is an early-stage, technology-driven travel company developing an integrated travel booking and media platform designed to connect
leisure, group and business travelers to the world. Our travel booking platform is powered by our proprietary NXT2.0 booking engine,
which offers extensive inventory, supporting both travelers and distributors with a platform for curating personalized experiences
and efficient trip planning and booking. We market our travel services through several core brands including NextTrip Vacations
(direct-to-consumer leisure travel), Five Star Alliance (luxury and cruise bookings) and NextTrip Business (small-to-mid-sized
corporate travel) and differentiate our platform through specialty features, including specialized widgets for groups (the
“Groups Platform”) and travel agents (the “Travel Agent Platform”), as well as PayDlay, a delayed payment
booking option. Complementing our booking engine are our media properties, including Journy.tv and Travel Magazine, which provide
destination content that we believe will drive high-intention traffic into our booking funnel and, over time, constitute a separate
high-margin advertising revenue stream. As part of streamlining our media assets, we merged Compass.tv into Journy.tv in July 2025
to create a unified offering of both FAST (Free Ad-Supported Streaming Television) and VOD (Video on Demand) assets. 

 By
integrating our media properties with our travel booking platform, our objective is to build a next-generation travel solution for
consumers, allowing them to better research and explore desired travel destinations. To accomplish this, we have and will be using
content from ours and others’ media platforms featuring travel videos, blogs and articles along with access to curated travel
products from our strategic partnerships, all supported by our technology and call center agents. Upon full integration of our
travel and media platforms, we believe our offers will both inspire and empower consumers to make informed choices when booking.
This contrasts with the existing online travel agency (“OTA”) model that focuses on volume bookings with little to no
service support. 

 Current
Scale and Going Concern 

 We
are in the earliest stages of commercial operations. 

 Due
to uncertainties regarding our ability to meet our current and future operating and capital expenses, there is substantial doubt about
our ability to continue as a going concern for 12 months from the date of filing of this Quarterly Report and the report of our registered
independent public accounting firm filed with our Annual Report on Form 10-K for our the fiscal year ended February 28, 2025 contains
a going concern qualification. 

 We
expect to continue to incur net losses and negative cash flows from operations for the foreseeable future as we invest in technology
enhancements, supplier relationships, and marketing initiatives. Throughout this report, whenever we discuss our operational achievements,
ecosystem, or growth plans, you should consider that we presently have nominal revenues, limited operating history, minimal brand awareness,
and will require significant additional capital to execute our business model. 

 NXT2.0
– Our Integrated Travel Booking Platform 

 At
the core of our business is our proprietary, direct-to-consumer NXT2.0 travel booking engine, which has been continually enhanced and
developed through a series of acquisitions of a variety of media and travel assets. NXT2.0 powers several websites, including our main
leisure site, nexttrip.com, and fivestaralliance.com, our widgets for The Groups and Travel Agent Platforms, as well as providing travel
booking solutions for our media hubs, Journy.tv and travelmagazine.com. We serve both leisure and business travelers by offering them
access to travel blogs, videos and concierge assistance to aid in planning travel, coupled with our proprietary booking platform for
the direct purchase of flights, hotels, vacation homes, cruise, tours, and other travel products. Our content includes destination guides,
maps and travel tips, designed to help travelers plan memorable trips and book those trips on our travel platform. 

 41 

 Travel
Products and Services 

 As
with many OTAs or booking engines in the travel industry, a travel booking platform is the technological foundation of our business.
Our travel-product strategy relies on the NXT2.0 booking engine, whose commercial viability depends on a mix of higher-margin direct
contracts and lower-margin, third-party application program interface (“API”) inventory which broadens the platform’s
reach. Our principal objective is to negotiate fixed-base-pricing agreements that confer pricing control and margin optimization; these
contracts permit us to deploy competitively priced promotions while preserving profitability. Early initiatives have concentrated on
hotel and vacation suppliers, including the April 3, 2025 agreement under which NextTrip became the exclusive booking engine for Intimate
Hotels of Barbados, a consortium of more than 35 independent properties. 

 This
flexibility affords us the opportunity to run specials on travel offerings that are highly competitive, but we will require additional
funding to support comprehensive marketing and awareness campaigns to attract new customers. Until this happens, we are working to target
customers with low dollar marketing campaigns in the leisure travel space, as well as pursuing strategic partnerships and specialized
travel offerings (e.g. Groups Platform), while maintaining competitiveness within our marketplace through adjustment of pricing. 

 To
supplement and scale our proprietary content, we have layered in third-party inventory through API integrations, thereby furnishing users
with comprehensive, one-stop access to more than four million hotels, vacation rentals, cruises, and activity products worldwide. This
phase commenced with the acquisition of BookIt.com and associated access to Expedia’s global hotel database and has since expanded
to encompass strategic alliances with Nuitée, Global Distribution Systems, Signature Vacations, and other third-party suppliers.
The Company has also strengthened its luxury and cruise offerings through the acquisition of Five Star Alliance, whose curated portfolio
of over 5,000 five-star properties and 400,000 monthly site visitors, resulting in an industry coveted 4.9-star Trustpilot rating, helps
enhance NextTrip’s technology-driven platform. Collectively, these integrations are intended to provide the inventory depth necessary
to activate NextTrip’s specialty features, facilitate cross-selling, and establish a scalable foundation for future direct-contract
growth. See “ Recent Developments – Acquisition of Five Star Alliance ” for more details on the transaction. 

 The
acquisition of TA Pipeline in August 2025 represents a significant milestone in NextTrip’s expansion of its Groups and MICE (Meetings,
Incentives, Conferences, Exhibitions) vertical, an area with strong growth potential and margin contribution. TA Pipeline has established
itself as a premier group-travel agency platform with deep expertise in delivering end-to-end solutions for conferences, conventions,
weddings, and affinity groups, often servicing groups ranging from 50 to 5,000 travelers. Its strong relationships with suppliers, planners,
and affinity partners align seamlessly with NextTrip’s vertically integrated “content-to-commerce” ecosystem, providing: 

 ● 
 High-Value
 Customer Base : The acquisition expands NextTrip’s reach into large group travel organizers, a segment characterized
 by high transaction values and repeat business. 

 ● 
 Technology
 & Synergies : By integrating TA Pipeline’s customer pipeline into NextTrip’s proprietary NXT2.0 booking
 technology, PayDlay financing tool, and concierge services, the Company is positioned to enhance conversion rates and drive incremental
 travel bookings. 

 ● 
 Cross-Media
 Leverage : TA’s group and event-based customers will be supported by NextTrip’s media brands (JOURNY.tv, and
 Travel Magazine 2.0), creating new marketing opportunities and accelerating NextTrip’s dual revenue model of advertising and
 travel bookings. 

 The
TA Acquisition exemplifies the Company’s “buy-and-build” strategy of acquiring complementary assets that are accretive
to revenues and synergistic with NextTrip’s broader vision of redefining how consumers and organizations discover, plan, and book
travel. See “ Recent Developments – Acquisition of TA Pipeline ” for more details on the transaction. 

 42 

 Our
offerings include a mixture of direct contracts and third-party API content which span leisure and business travel, alternative lodging,
wellness travel, and media solutions, engaging customers throughout their travel journey with both individual and packaged options. Such
product offering highlights include: 

 ● 
 NextTrip
 Leisure – A robust booking engine providing customized vacation packages, flights, hotels, tours, wellness vacations, cruise
 and group travel options. 

 ● 
 NextTrip
 Luxury & Business – Five Star Alliance provides access to over 5,000 luxury hotel properties worldwide featuring booking,
 expense reporting, concierge services, and 24/7 support. 

 ● 
 NextTrip
 Cruises – a fully integrated cruise booking engine providing access to over 10,000 sailings and 35 cruise partners. Travelers
 benefit from exclusive pricing, concierge service, and bundled packages that include transfers, pre- and post-cruise stays, and expert
 travel support. 

 ● 
 NextTrip
 Solutions – A suite for product management and white-label solutions, including property management, vacation rentals,
 and a portal to support travel agents – the Travel Agent Platform. 

 ● 
 NextTrip
 Media – Travel Magazine and Journy.tv, offering travelers inspiration and information through articles, videos, and immersive
 digital experiences. This will include personalized travel content for users to explore and share with friends and family. 

 NXT2.0
Platform Features 

 Our
NXT2.0 travel booking platform at nexttrip.com offers tools for browsing and comparing flights, hotels, tours, cruises and activities.
Additionally, we allow travelers to defer payments on select vacation packages with our proprietary PayDlay program. PayDlay allows travelers
to purchase travel with a small deposit and make subsequent payments between purchase and the week before travel. Registered NextTrip
travelers can manage bookings, receive updates on special offers, and subscribe to newsletters with travel tips and destination highlights.
Security is a priority, with rigorous content screening and Payment Card Industry compliance to safeguard customer information. The platform
further distinguishes itself through exclusive supplier partnerships that yield preferential rates, targeted promotions, and inventory
advantages, while its robust architecture supports complex group bookings—covering conferences, conventions, and destination weddings
via a specialized Groups Platform—and equips over 150 beta-testing professionals with a Travel Agent Platform that streamlines
multi-passenger reservations. 

 As
we execute our business model by increasing our inventory base and expanding key partnerships, we plan to launch a series of additional
features designed to benefit its users. We intend to further integrate our media features with our booking system, bringing together
travel content and itinerary management in one interface. The “My Journy” personalized travel-planning magazine is intended
to provide editorial features, destination information, and user-specific offers based on analysis of past searches and bookings. By
including this content in the booking process, NXT2.0 aims to turn browsing into bookings more efficiently and give suppliers better
opportunities to promote their products. We also plan to introduce a multi-level rewards program that gives benefits for repeat
bookings, using different channels, and social interactions within the platform. A planned group chat and sharing feature will let families,
friends, and corporate groups work together on itinerary changes in real time. These developmental features are designed to encourage
customer loyalty and keep users engaged with NXT2.0. An AI-powered travel assistant is in development which is intended to provide recommendations,
price alerts and support, offering services usually found in premium travel agencies in a digital format. Following the initial launch
of the Travel Agent Platform, we are continuing development of new tools for travel agents. With new product options like cruises, wellness
retreats, and extra experiences, NXT2.0 aims to attract more leisure and business travelers. These updates are intended to boost user
engagement, speed up bookings, and increase customer value, while giving NextTrip a competitive edge through technology and personalized
data. 

 NextTrip
Integrated Media Solutions 

 In
addition to the key features, robust inventory, and focus on underserved market opportunities like groups and travel agent bookings,
a key differentiator benefiting the growth and development of our NXT2.0 booking engine is our media strategy which, when fully integrated
with NXT2.0, is intended to offer a comprehensive travel and media ecosystem designed to guide and support consumers throughout their
travel experience from inspiration to booking, to travel to sharing the journey on social media. 

 43 

 We
leverage our media brands—TravelMagazine.com and Journy.tv—as strategic tools to generate travel bookings by integrating
content, marketing, and booking technology as well as to generate advertising revenues for third-party content. The strategy includes
generating content marketing and inspiration, integrating booking opportunities into that content and generating feedback from such advertising
data to better target and identify travel interests and intent, which is intended to lead to growing brand trust and authority and future
partnerships and opportunities for sponsored advertising content. 

 By
combining engaging travel content with seamless booking technology and targeted marketing, our media brands serve as both inspiration
engines and direct booking channels. This holistic approach helps capture travelers at every stage of the decision-making process, ultimately
driving more bookings through the NXT2.0 platform and independent advertising revenue. 

 Key
media brands and partnerships include: 

 ● 
 Travel
 Magazine – TravelMagazine.com is our media hub. It is an online travel publication that provides articles, guides, tips,
 and inspiration for travelers. Coming soon is “My Bucket List,” a platform where travelers can create and share personalized
 travel lists, supported by booking features and local insights. 

 ● 
 Journy.tv 
 – In April 2025, we acquired Journy.tv, a Free Ad-Supported Streaming TV (“FAST”) Channel that specializes in travel,
 adventure, and culture-focused content. In July 2025, we merged Compass.tv, our AVOD (Advertising-based Video on Demand) platform
 designed to provide streaming television content, into Journy.tv to create a unified offering of both FAST and VOD assets. 

 ● 
 Promethean
 – Promethean is our proprietary interactive video overlay platform which is intended to drive ad revenue and facilitate
 content-to-commerce integration. 

 ● 
 Leap
 Media – In December 2024, we announced our collaboration with Leap Media Group, a respected leader with over 35 years in
 TV advertising, media planning and buying, to support the launch of advertising on Journy.tv by delivering branded entertainment
 content and advertising seamlessly across its platform. 

 ● 
 Blue
 Fysh – In February 2025, the Company and Blue Fysh Holdings Inc. (“Blue Fysh”) entered into a share exchange
 agreement creating minority ownership positions between the entities, as part of their mutual efforts to work together to expand
 each company’s business opportunities. See “ Recent Developments – Blue Fysh Share Exchange ” for more
 details on the transaction. 

 The
strategic partnership between NextTrip and Blue Fysh is intended to focus on: 

 ● 
 Expanded
 audience reach integrating Journy.tv, TravelMagazine.com, and travel products platform, NextTrip.com, with Blue Fysh’s expertise
 in digital OOH solutions throughout North America; 

 ● 
 Increased
 advertising revenue by leveraging their combined media assets, to enhance their ability to broaden reach, deployment, and higher
 expected advertising fees, providing greater value to advertisers and stakeholders; 

 ● 
 Enhanced
 sales efforts with NextTrip utilizing Blue Fysh’s strategic sales relationships to contribute advertising sales across NextTrip’s
 media platforms; and 

 ● 
 Increased
 Brand Awareness as a result of Blue Fysh’s media relationships and digital displays to help create flash marketing campaigns
 to raise awareness of NextTrip and highlight NextTrip’s travel products and services as well as its media properties, Journy.tv
 and Travel Magazine. 

 Revenue
Strategy and Development of an Integrated Travel and Media Ecosystem 

 Our
revenue strategy and business model focuses on integrating our Media and Travel divisions, offering users a comprehensive ecosystem designed
to guide and support them throughout the travel experience. Presently, we generate revenue through two core methods: travel bookings
and advertising revenue. 

 44 

 Travel
Bookings and Related Service s 

 NextTrip,
like many OTAs and travel platforms, can generate revenue through a variety of channels. The specific mix depends on the continued development
of our platform, execution of our business model, partnerships, and the types of services we offer at any given time. 

 Product
sales are generally structured either: (1) as a set commission on the sale of a travel product whereby the supplier or wholesaler controls
the pricing (as is the case with the majority of Five Star Alliance products), or (2) through a direct, negotiated contract between product
supplier and the Company (as is the case with the majority of our products) which allows us to set our own retail pricing based upon
market forces and a need to maintain a markup above its fixed cost. Commission-based travel products are generally lower margin than
directly negotiated travel products. 

 The
flexibility of directly negotiated contracts affords us the opportunity to both run specials that are highly competitive but result in
low margins, or to simply adjust pricing to maintain competitiveness within its market. Key factors that affect revenues and profitability
include competitive market pressures from other travel suppliers and distributors, variable contract terms, marketing budget to create
awareness, and seasonality. 

 Leisure
travel bookings currently generate the majority of our nominal revenues. This includes the sale of travel products such as airline tickets,
hotel rooms, and cruises as well as travel services such as travel insurance and ground activities. While we believe this revenue can
be accelerated with an enhanced marketing budget, management has largely focused on supplements to its travel offerings by including
travel technology products such as our Travel Agent and Groups Platforms. 

 Additionally,
offering concierge-level customer support, trip planning assistance or other premium features can provide peace of mind and added convenience
and may result in premium service fees added to the cost of booking, which represents direct revenue for us. 

 Advertising 

 We
are building our own media and advertising ecosystem through Travel Magazine and Journy.tv. These media platforms are designed to allow
users to explore and educate themselves on travel. The revenue strategy in the media division is two-pronged: (1) as the number of viewers/users
grows, it drives the advertising rates we can charge third-parties to promote travel products and services to our audience and (2) outside
of the direct advertising dollars generated from our media platforms which are expected to become a key driver of higher margin revenue
than those earned from travel product sales, as the audience grows it will provide additional opportunities for us to promote ours own
travel offerings to highly targeted viewers, thus lessening the need for spending significant marketing dollars through other mediums
to attract consumers. 

 To
drive this initiative, we have entered into partnerships with Travel Spike and Leap Media Group, respected leaders in the travel category
with decades of experience in TV advertising, media planning and buying. Journy.tv is now equipped to deliver branded entertainment content
and advertising seamlessly across its platform, supported by targeted media strategy designed to optimize revenue well delivering high
quality content to travel enthusiasts. 

 Development
of Integrated Revenue Model – Strategy and Current Status 

 As
we are still in the developmental phase of our commercial operations and have thus far realized only nominal revenues, the successful
execution of our business strategy is predicated upon our capacity to broaden and deepen our supplier base, cultivate and maintain a
robust customer network, and obtain adequate financing to underwrite our marketing initiatives and continued product development. There
can be no assurance that we will be able to accomplish any of these objectives. 

 We
are in the early stages of development and roll out of our comprehensive travel and media model. While the products introduced to date
are now functional and responsible for the current, nominal revenue generation of the Company, the corresponding revenue streams are
currently both small and unpredictable relative to the established travel industry leaders. 

 45 

 While
our core marketing initiatives have been handicapped due to budget constraints, we have undertaken limited promotions focused on higher
margin products, in sought after vacation regions like Mexico and the Caribbean. Recognizing these marketing budget restraints, we focused
our efforts on expanding our product offering globally with major suppliers, including Expedia and Nuitée, among others. Management
believes this was a critical step to allow for the launch and promotion of specialty travel services like NextTrip’s Groups Platform
(i.e. destination weddings, conferences and conventions), NextTrip Travel Agents Platform and business-focused travel offerings. These
types of programs require unique technologies, broad global inventory offerings, and specialized servicing. Key to this development is
the fact that the platforms fall outside of the typical OTA business model, thereby justifying the supply of travel products from large
OTAs, which in turn supports our platforms while being mutually beneficial to both parties. 

 Our
ability to capitalize on existing travel technology platforms is severely restricted due to the lack of funding to drive marketing programs.
Enhancements to the existing platforms along with the introduction of new programs under development are needed to complete the model.
The timeline to complete these programs is dependent upon our ability to raise capital; however, we believe that most programs can be
delivered within 180 days of obtaining such necessary funding. Once fully functioning, we believe the model will deliver accelerated
growth as its “conversion technology” focuses on underserved areas in the travel sector utilizing platforms (i.e. PayDlay,
Groups bookings and Travel Agents) that are not well serviced by the major travel industry leaders. Additionally, we have introduced
engagement and media solutions (i.e. Journy.tv Travel Magazine), allowing users to better plan future travel. We believe a natural extension
of providing users with media solutions to assist with travel planning will further the development and growth of a NextTrip ecosystem.
This ecosystem is expected to assist us in reducing external marketing expenditures while creating a new revenue channel from targeted
and timely advertising designed to assist users in their travel planning. Upon completion of the NextTrip model, we expect to drive revenues
from travel solutions outside of the focus of major travel competitors. 

 We
are also engaging Save Your Day Films, a London-based production company celebrated globally for award-winning factual programming and
captivating travel content, as an in-house production partner to deliver exclusive content as part of our media strategy, driving traffic,
cross-promotional opportunities and licensing revenues. 

 Recent
Developments 

 Acquisition
of TA Pipeline 

 On
August 6, 2025, the Company entered into a Membership Interest Purchase Agreement (the “TA MIPA”) with TA Pipeline LLC (“TA”)
and the members of TA (the “TA Members”), pursuant to which the Company purchased all of the issued and outstanding membership
interests of TA from the TA Members (the “TA Acquisition”), resulting in TA becoming a wholly-owned subsidiary of
the Company. The TA Acquisition closed on August 6, 2025. 

 Pursuant
to the TA MIPA, as consideration for the TA Acquisition, at closing, the Company (i) paid the TA Members an aggregate of $443,169 in
cash (the “TA Closing Payment”), $118,169 of which (the “Estimated Additional Closing Payment”) was paid as a
purchase price adjustment based on the Members’ Deficit (as defined in the TA MIPA) set forth in the closing balance sheet provided
by TA in connection with closing, as more particularly provided for by the TA MIPA; and (ii) issued an aggregate of 96,774 restricted
shares of Company common stock (the “TA Closing Shares,” and together with the TA Closing Payment, the “TA Closing
Consideration”) to the TA Members, valued at $300,000, based on a price per share of $3.10. The Estimated Additional Closing Payment
is subject to adjustment, upward or downward, to the extent that the Members’ Deficit as of the closing date is determined to be
less than or exceed $175,000, as provided in the TA MIPA. In addition to the TA Closing Consideration, and as further consideration for
the TA Acquisition, the Company shall make an additional payment to the TA Members in the form of an earnout (the “TA Milestone
Payment”), which shall be in an amount equal to five percent (5%) of the net revenues generated by TA during the 12 month period
after the closing date (the “Milestone Period”), up to a maximum of $200,000. The TA Milestone Payment shall be paid to the
TA Members within 10 days following completion of the Milestone Period and will be payable fifty percent (50%) in cash and fifty percent
(50%) in restricted shares of Company common stock (the “TA Milestone Shares,” and together with the TA Closing Shares, the
“TA Acquisition Shares”), to be calculated based on a price per share of $3.10. 

 46 

 In
addition to the foregoing, in the event that the Fair Market Value of the Company’s common stock is less than $3.10 (the “Base
Price”) during the applicable Exercise Period, each TA Member shall have the limited, one time option, to exercise one of the following
rights as to some or all of their outstanding TA Acquisition Shares by delivering notice to the Company: (i) the right to require the
Company to repurchase from the TA Member all or any portion of their outstanding TA Acquisition Shares at the Base Price; (ii) the right
to require the Company to issue to such TA Member that number of additional shares of Company common stock (the “Top Up Shares”)
as is necessary to make the aggregate value of the number of TA Acquisition Shares specified in the notice (based on the Fair Market
Value) equal to the original aggregate value of the number of TA Acquisition Shares specified in the notice (based on the Base Price);
and (iii) the right to require the Company to pay to such TA Member, in cash, an amount equal to the product of (x) the number of TA
Acquisition Shares specified in the notice and (y) the positive difference, if any, between the Base Price and the Fair Market Value.
For purpose of the foregoing rights, the “Exercise Period” means the three month period commencing upon the earlier of: (i)
with respect to the TA Closing Shares, (x) the date that the TA Closing Shares first become eligible for public resale and (y) the first
anniversary of the closing date; and (ii) with respect to the TA Milestone Shares, (x) the date that the TA Milestone Shares first become
eligible for public resale and (y) the first anniversary of the closing date. Additionally, for purpose of the foregoing rights, “Fair
Market Value” means the volume weighted average price per share of the Company’s common stock for the twenty consecutive
trading days immediately preceding the notice date. During the Exercise Period, each of the TA Members shall be prohibited from engaging
in certain transactions in the Company’s stock, as more particularly set forth in the TA MIPA. 

 In
consideration for their receipt of the foregoing consideration, at closing of the TA Acquisition, each of the TA Members entered into
restrictive covenant agreements providing for certain customary restrictive covenants, including customary non-competition, non-solicitation
and no hire covenants for a period of three years following the closing date, and customary confidentiality covenants. 

 Acquisition
of Five Star Alliance 

 On
February 6, 2025, the Company entered into a Membership Interest Purchase Agreement (the “FSA Purchase Agreement”) with FSA
Travel, LLC (“FSA”), John McMahon, as Majority Member, and the other members of FSA included on the signature page thereto
(Mr. McMahon together with such other members, collectively the “FSA Members”). Pursuant to the FSA Purchase Agreement, on
February 10, 2025 (the “Initial Closing Date”), the Company purchased 9,608 membership units of FSA (equal to a 49% ownership
stake in FSA immediately after closing) (the “Initial Interests”) in exchange for the Company’s (i) payment of $500,000
in cash and (ii) issuance of 161,291 shares of newly designated Series O Nonvoting Convertible Preferred Stock of the Company (“Series
O Preferred”) to FSA. In connection with, and as a condition to, the Initial Closing, the Company entered into employment agreements
with Mr. McMahon and Courtney May, each of whom became employees of the Company as of the Initial Closing Date. 

 In
addition, subject to satisfaction of the conditions discussed below, the FSA Purchase Agreement provided the Company with an option (the
“Option”), in its sole discretion, to purchase the remaining 51% of the membership units from the FSA Members within 60 days
of the Initial Closing Date (the “Final Closing Date”), in exchange for (i) the payment by the Company to the FSA Members
of an aggregate of $500,000 in cash and (ii) the issuance of an aggregate of 161,291 shares of Series O Preferred to the FSA Members
(the “Final Closing”). The Company’s Option was subject to, and contingent upon, satisfaction of the following conditions:
(i) the continued employment of Mr. McMahon and Ms. May by the Company, subject to limited exceptions, (ii) the completion of a $2,000,000
capital raise by the Company, and (iii) the continued operation of FSA by FSA’s existing management until the Final Closing Date. 

 On
April 9, 2025 (the “Final Closing Date”), upon FSA’s agreement to waive the capital raise condition to closing, the
Company exercised the Option and, in satisfaction of its obligations under the Purchase Agreement in connection with the Final Closing,
the Company paid the FSA Members an aggregate of $500,000 in cash and issued the FSA Members an aggregate of 161,291 shares of Series
O Preferred. As a result, as of the Final Closing Date, the Company acquired the remaining 51% of the membership units in FSA and FSA
became a wholly-owned subsidiary of the Company. 

 47 

 In
addition to the above consideration, the FSA Purchase Agreement provided that the Company shall make additional payments to the FSA Members
upon achievement of certain milestones, as follows: 

 1. 
 The
 payment of $100,000 in cash and the issuance of 32,258 shares of Series O Preferred at such time as FSA shall have Travel Bookings
 of Travel Products for five groups by FSA, the commissions to FSA for which are scheduled to be collected after the Final Closing; 

 2. 
 The
 payment of $100,000 in cash and the issuance of 32,258 shares of Series O Preferred at such time as FSA shall have Travel Bookings
 of cruise related Travel Products, the gross cumulative cost of which to the customers is greater than or equal to $25,000 and the
 commissions for which are scheduled to collected after the Final Closing; 

 3. 
 The
 payment of $100,000 in cash and issuance of 32,258 shares of Series O Preferred at such time as FSA shall deliver all necessary passcodes
 to allow NextTrip full remote access to the FSA booking engine for use by NextTrip; and 

 4. 
 The
 payment of $100,000 in cash and issuance 32,258 shares of Series O Preferred at such time as FSA shall have Travel Bookings for Travel
 Products, the cumulative gross cost of which to the customers is greater than or equal to $1 million and the commissions for which
 are scheduled to be collected after the Final Closing. 

 On
April 28, 2025, the parties determined that each of the foregoing milestones had been achieved, and in satisfaction of its obligations
under the FSA Purchase Agreement, the Company paid the FSA Members an aggregate of $400,000 in cash and issued the FSA Members an aggregate
of 120,967 shares of Series O Preferred. 

 Blue
Fysh Share Exchange 

 On
February 24, 2025, the Company and Blue Fysh entered into a share exchange agreement (the “BF Share Exchange Agreement”)
whereby Blue Fysh agreed to issue 82 restricted shares of its common stock to the Company, representing a 10% interest in Blue Fysh,
in exchange for 483,000 restricted shares of Series N Nonvoting Convertible Preferred Stock (the “Series N Preferred”) of
the Company at an issuance price of $5.00 per share (the “BF Share Exchange”). The BF Share Exchange closed on February 28,
2025. The parties entered into the BF Share Exchange Agreement, creating minority ownership positions between the entities, as part of
their mutual efforts to work together to expand each company’s business opportunities. 

 Journy.tv
Asset Purchase 

 On
April 1, 2025, the Company entered into an asset purchase agreement (the “Journy.tv Purchase Agreement”) with Ovation LLC
(“Ovation”), pursuant to which the Company purchased assets, including without limitation trademarks, domains, apps and certain
agreements, and assumed certain liabilities related to Ovation’s Journy.tv business (the “Journy.tv Acquisition”).
The Journy.tv Acquisition closed on April 1, 2025. 

 Pursuant
to the Journy.tv Purchase Agreement, as consideration for the Journy.tv Acquisition, the Company paid Ovation $300,000 in cash at closing
and issued Ovation 20,000 restricted shares of Company common stock. 

 In
connection with the Journy.tv Acquisition, on April 1, 2025, the Company and Ovation also entered into a License Agreement (the “License
Agreement”), pursuant to which Ovation granted the Company the non-exclusive right, throughout the territories and for the term
set forth therein, to exhibit, promote, market, advertise, publicize and/or otherwise exploit the programs listed in the License Agreement
in the media of (i) FAST via the Journy.tv Channel and (ii) Video On Demand via the Journy.tv Channel. Pursuant to the License Agreement,
Ovation shall not license any unaffiliated third party the right to exhibit certain of the programs subject to the License Agreement
and shall not use certain of the programs subject to the License Agreement on its owned or operating streaming platforms (subject to
certain exceptions). As consideration for the rights granted under the License Agreement, the Company agreed to pay Ovation an aggregate
non-refundable license fee of $336,801, payable in various tranches through October 31, 2027. Either party may terminate the License
Agreement in the event of a material default by the other party that is not cured within fifteen days after the defaulting party receives
notice of such default. 

 48 

 Strategic
Partnership with Intimate Hotels of Barbados (“IHB”) 

 On
April 3, 2025, we entered into a strategic partnership with IHB, a collection of over 35 independent hotels and vacation rentals. The
Company will serve as the official booking engine for IHB, providing a fully integrated travel portal and customized packaging tools
directly on the IHB website. 

 NextTrip
Cruise Launches, Offering Seamless Cruise Booking Experience 

 On
March 27, 2025, the Company unveiled NextTrip Cruise, a fully integrated cruise booking engine providing access to over 10,000 sailings
and 35 cruise partners. Travelers benefit from exclusive pricing, concierge service, and bundled packages that include transfers, pre-
and post-cruise stays, and expert travel support. 

 Changes
to the Board of Directors 

 On
July 14, 2025, the Company’s Board of Directors adopted a resolution to increase the size of the board from five to seven members
and appointed Bill Kerby, the Company’s Chief Executive Officer, and Andy Kaplan as directors to fill the newly created vacancies,
in each case effective July 17, 2025. Mr. Kerby shall serve as a Class II director of the Company, with his initial term expiring at
the Company’s 2026 Annual Meeting of Stockholders, and Mr. Kaplan shall serve as a Class III director, with his initial term expiring
at the Company’s 2027 Annual Meeting of Stockholders. Each of Messrs. Kerby and Kaplan will serve as a director for the balance
of their respective initial terms, and until his successor is elected and qualified, subject to his earlier death, resignation or removal.
Additionally, effective July 17, 2025, the Board appointed Mr. Kaplan to serve as a member of the Nominations & Governance Committee
of the Board. 

 Additionally,
in accordance with the Board Appointment Rights provided for in the Exchange Agreement, on July 14, 2025, the Company’s Board of
Directors appointed the NTH Appointees as directors, in each case effective July 28, 2025, at which time Salvatore Battinelli, Jacob
Brunsberg, Dennis Duitch and Kent Summers resigned as directors of the Company. Stephen Kircher shall serve as a Class I director, with
his initial term expiring at the Company’s 2028 Annual Meeting of Stockholders; Jimmy Byrd shall serve as a Class II director,
with his initial term expiring at the Company’s 2026 Annual Meeting of Stockholders; and Ms. Diges and Mr. Jiang shall each serve
as a Class III director, with their initial terms expiring at the Company’s 2027 Annual Meeting of Stockholders. Each of NTH Appointees
will serve as a director for the balance of their respective initial terms, and until his or her successor is elected and qualified,
subject to his or her earlier death, resignation or removal. Additionally, effective July 28, 2025, the Board appointed the NTH Appointees
to serve on the following committees of the Board: 

 ● 
 Audit
 Committee : Carmen Diges (Chair), Stephen Kircher and Jimmy Byrd 

 ● 
 Compensation
 Committee : Jimmy Byrd (Chair), Stephen Kircher and Carmen Diges 

 ● 
 Nominations
 & Governance Committee : David Jiang (Chair) and Carmen Diges 

 Results
of Operations 

 Three
Months Ended August 31, 2025 Compared to the Three Months Ended August 31, 2024 

 During
the three months ended August 31, 2025, we recognized revenue of $757,648, as compared to $154,498 in the same period in 2024, an increase
of $603,150, or 390%. The increase was primarily due to group travel-related revenues, a consortia payment, and commission income generated
from Five Star Alliance (“FSA”) bookings. 

 Our
cost of revenue for the three months ended August 31, 2025 was $592,073, as compared to $155,455 for the same period in 2024, an increase
of $436,618, or 281%. The increase was primarily attributable to the increase in sales from the second quarter of 2025 as compared to
the second quarter of 2024. 

 Our
gross margin for the three months ended August 31, 2025 was 21.9%, as compared to (0.6%) for the same period in 2024. The improvement
in gross margin is primarily attributable to FSA travel bookings and group travel bookings. 

 49 

 Our
total operating expenses for the three months ended August 31, 2025 were $3,368,452, as compared to $1,468,335 for the same period in
2024, an increase of $1,900,117, or 129%. The increase was primarily attributable to stock options granted to the Company’s former
directors and an increase in professional services expenses, as further discussed below. Non-cash expenses, primarily consisting of stock
based compensation, stock options granted to former directors, common and preferred shares issued to third parties for services, and
depreciation and amortization totaled $1,271,354, or 37.7% of our operating expenses for the three months ended August 31, 2025, and
$172,473, or 11.8% of our operating expenses for the same period in 2024. 

 Salary
and benefits costs were $695,538 for the three months ended August 31, 2025, as compared to $628,759 for the same period in 2024, an
increase of $66,779, or 11%. The increase was comprised of: (a) an increase in salaries of $43,823 due to the addition of two FSA employees
pursuant to the acquisition; (b) an increase in taxes and benefits of $25,270; and(c) an increase in SAR expense of $2,493; these increases
were partially offset by a decrease in severance expense of $4,808. 

 Stock-based
compensation was $0 for the three months ended August 31, 2025, as compared to $13,841 for the same period in 2024, a decrease of $13,841
as all outstanding options are fully vested and no new options were granted during the period. 

 We
incurred general and administrative costs of $31,736 during the three months ended August 31, 2025, as compared to $21,677 in the same
period in 2024, an increase of $10,059, or 46%. The increase was primarily the result of $12,110 in travel expenses incurred for a conference,
partially offset by a decrease in rent expense of $2,051. 

 We
incurred marketing costs of $174,444 during the three months ended August 31, 2025, as compared to $51,347 during the same period in
2024. The increase of $123,097, or 240%, was due to increase in expenses associated with the enhancement of the Travel Magazine website
of $77,600 aimed at driving traffic and generating business across all of our brands, an increase in media consulting expenses of $27,410
due to the engagement of a social media influencer agency for Journy.tv, an increase in outside marketing services of $15,203, and an
increase in marketing and advertising expenses of $2,884. 

 We
incurred technology costs of $267,021 during the three months ended August 31, 2025, as compared to $141,022 during the same period in
2024. The increase of $125,999, or 89%, was primarily attributable to: (a) an increase in expenses in connection with Journy.tv of $98,599
for content licensing; (b) an increase in dues and subscriptions expense of $11,101 primarily related to the integration of our new CRM
and business management system, Zoho One; (c) an increase of $9,690 in cloud database expenses related to the addition of hosting FSA;
(d) an increase in information technology and computer expenses of $6,276; and (e) an increase in software expenses of $333. 

 Professional
service fees incurred in the three months ended August 31, 2025 were $1,429,072, as compared to $372,027 incurred during the same period
in 2024, an increase of $1,057,045, or 284%. This increase was a result of: (a) an increase in investor relations expenses of $394,075
due to the renewal of existing contracts plus the addition of three new contracts; (b) an increase in legal fees of $260,217 due to services
related to various regulatory filings and acquisitions; (c) an increase in consulting fees of $231,424 for business development initiatives;
(d) an increase in contract labor related to Journy.tv and operations of $93,932; (e) an increase in accounting expenses of $53,397 due
to technical accounting services related to the acquisition of FSA and Journy.tv.; and (f) an increase in lending fees of $24,000 related
to bridge loan financings. 

 Organizational
costs for the three months ended August 31, 2025, were $470,105, as compared to $80,452 for the same period in 2024, an increase of $389,653.
The increase is primarily attributable to the issuance of stock options to former directors as compensation for their services. 

 Depreciation
and amortization expense for the three months ended August 31, 2025 was $216,625, as compared to $95,414 for the same period in 2024,
an increase of $121,211, or 127%. The increase was primarily due to commencing amortization of Journy.tv, and the FSA tradename
and software. 

 Other
operating expenses were $83,911 for the three months ended August 31, 2025, as compared to $63,796 for the same period in 2024. The $20,115
increase was primarily due to a timing difference in billing for D&O and other insurance of $14,572 and an increase in merchant processing
fees of $5,543, primarily related to TA Pipeline. 

 50 

 During
the three months ended August 31, 2025, we realized net other income of $304,722, as compared to net other expense of $64,227 in the
same period in 2024. The increase in net other income of $368,949 was primarily due to a settlement agreement between NextTrip Group,
LLC and the Company related to the NextPlay Technologies, Inc. promissory note receivable of $583,000, and the August 31, 2025 revaluation
of the derivative liability, which decreased the liability by $10,000, partially offset by (a) interest expense of $171,105 in connection
the amortization of the debt discount associated with bridge loans and (b) interest expense associated with notes payable and other expenses
of $52,946. 

 Preferred
dividends for the three months ended August 31, 2025 were $183,263 as compared to $10,688 for the same period in 2024. The increase was
due to dividends paid to the holders of shares of Series L and Series M Preferred stock issued in connection with debt conversions in
December 2024 and February 2025. 

 In
the three months ended August 31, 2025, the net loss from continuing operations totaled $2,898,155, as compared to a net loss from continuing
operations of $1,533,519 for the same period in 2024 an increase of $1,364,636. The operating loss component increased by $1,733,585
in 2025, partially offset by an increase in the other income component of $368,949. 

 The
net loss from discontinued operations for the three months ended August 31, 2025 was $0 as compared to $1,131 for the same period in
2024. 

 Our
net loss applicable to common stockholders for the three months ended August 31, 2025, was $3,081,418, as compared to $1,545,338 for
the same period in 2024, an increase of $1,536,080, or 99%. The increase was primarily attributable to an increase in operating
loss from continued operations of $1,733,585 and an increase in preferred dividends of $172,575; partially offset by an increase in other
income of $368,949 and a decrease in the loss from discontinued operations of $1,131. 

 Six
Months Ended August 31, 2025 Compared to the Six Months Ended August 31, 2024 

 During
the six months ended August 31, 2025, we recognized revenue of $896,475, as compared to $343,291 in the same period in 2024, an increase
of $553,184, or 161%. The increase was primarily due to group travel-related revenues, a consortia payment, and commission income generated
in connection with the Five Star Alliance luxury travel bookings. 

 Our
cost of revenue for the six months ended August 31, 2025 was $691,994, as compared to $329,036 for the same period in 2024, an increase
of $362,958, or 110%. The increase was primarily attributable to the increase in sales from the second quarter of 2025 as compared to
the second quarter of 2024. 

 Our
gross margin for the six months ended August 31, 2025 was 22.8%, as compared to 4.2% for the same period in 2024. The improvement in
gross margin is primarily attributable to FSA travel bookings and group travel bookings. 

 Our
total operating expenses for the six months ended August 31, 2025 were $8,047,095, as compared to $3,435,948 for the same period in 2024,
an increase of $4,611,147, or 134%. The increase was primarily attributable to stock options granted to former directors and an
increase in professional services expenses, as further discussed below. Non-cash expenses, primarily consisting of stock based compensation,
stock options granted to former directors, common and preferred shares issued to third parties for services, and depreciation and amortization
totaled $4,251,469, or 52.8% of our operating expenses for the six months ended August 31, 2025, and $544,571, or 15.9% of our operating
expenses for the same period in 2024. 

 Salary
and benefits costs were $1,392,453 for the six months ended August 31, 2025, as compared to $1,255,511 for the same period in 2024, an
increase of $136,942, or 11%. The increase was comprised of: (a) an increase in salaries of $69,637 due to the addition of two
Five Star Alliance employees pursuant to the acquisition; (b) an increase in taxes and benefits of $46,160; (c) an increase in SAR expense
of $17,189 due to a revaluation in April 2025; and (d) an increase in bonus and commission expense of $8,764; partially offset by a decrease
in severance expense of $4,808. 

 Stock-based
compensation was $138,325 for the six months ended August 31, 2025, as compared to $30,235 for the same period in 2024. This increase
of $108,090. was due to a stock option grant to an employee that was fully vested on the date of the grant. 

 51 

 We
incurred general and administrative costs of $62,324 during the six months ended August 31, 2025, as compared to $49,231 in the same
period in 2024, an increase of $13,093, or 27%. The increase was primarily the result of $21,460 in travel expenses incurred for conferences,
partially offset by a decrease in payroll services fees of $7,712 as a result of changing payroll service providers, lower license and
filing fees of $2,868, and lower rent expenses of $2,417. 

 We
incurred marketing costs of $264,479 during the six months ended August 31, 2025, as compared to $207,536 during the same period in 2024.
The increase of $56,943, or 27%, was for a consulting contract for marketing services of $75,744, increased Travel Magazine expenses
of $53,776 aimed at driving traffic and generating business across all of our brands, and an increase media consulting expenses of $27,410
due to the engagement of a social media influencer agency. Partially offsetting the increase was a decrease of $88,560 in fees previously
incurred from a former media advertising firm, and a decrease in contract labor of $11,427 due to the completion of project-based initiatives. 

 We
incurred technology costs of $568,836 during the six months ended August 31, 2025, as compared to $325,691 during the same period in
2024. The increase of $243,145, or 75%, was primarily attributable to: (a) an increase in expenses in connection with Journy.tv of $222,775
for content licensing; (b) an increase in information technology and computer expenses of $11,715 primarily due to onboarding additional
employees and use of outsourced IT services; (c) an increase in dues and subscriptions of $2,712 due to the implementation of our new
CRM and business management system, Zoho One, partially offset by a decrease in marketing subscriptions; and (d) an increase in software
expenses of $1,923 for hotel connections into the NextTrip database. Partially offsetting these increases is a net decrease of $1,610
in cloud database expenses primarily related to updating legacy code to optimize compatibility with our hosting infrastructure. 

 Professional
service fees incurred in the six months ended August 31, 2025 were $2,598,548, as compared to $895,900 incurred during the same period
in 2024, an increase of $1,702,648, or 190%. This increase was a result of: (a) an increase in investor relations expenses of $851,425
due to renewal of existing contracts and the addition of three new investor relations firms; (b) an increase in consulting fees of $381,889
due to contracts for services related to business development; (c) an increase in legal fees of $165,812 due to services related to various
regulatory filings and acquisitions; (d) an increase in accounting expenses of $148,337 due to costs associated with technical accounting
services related to the FSA, Journy.tv and TA Pipeline acquisitions, as well as a required two-year audit and first quarter financial
statement review for FSA; (e) an increase in lending fees of $85,500 related to bridge loan financings; and (f) and increase in contract
labor of $69,685 related to Journy.tv and other operations. 

 Organizational
costs for the six months ended August 31, 2025, were $2,469,775, as compared to $109,189 for the same period in 2024, an increase of
$2,360,586. The increase is primarily attributable to fully vested stock options granted to former directors. 

 Depreciation
and amortization expense for the six months ended August 31, 2025 was $423,274, as compared to $383,000 for the same period in 2024,
an increase of $40,274, or 11%. The increase was primarily due to commencing amortization upon the product launch of our FAST network,
Journy.tv, and the FSA tradename and software. 

 Other
operating expenses were $129,081 for the six months ended August 31, 2025, as compared to $179,655 for the same period in 2024. The $50,574
decrease was primarily due to the reduced cost of D&O and other insurance costs of $37,695 and a net decrease in merchant processing
fees of $18,878 due to engaging a new merchant processor with lower rates. 

 During
the six months ended August 31, 2025, we realized net other income of $498,533, as compared to net other expense of $99,452 in the same
period in 2024. The increase in net other income of $597,985 was primarily due to a settlement agreement between NextTrip Group, LLC
and the Company related to the NextPlay Technologies, Inc. promissory note receivable of $1,123,245, and the August 31, 2025 revaluation
of the derivative liability which resulted in a decrease in the liability of $10,000, partially offset by: (a) a loss of $70,100 related
to the extinguishment of debt; and (b) interest expense of $402,845 primarily in connection the amortization of the debt discount associated
with bridge loans and (c) an increase in interest expense associated with notes payable and other expenses of $62,315. 

 52 

 Preferred
dividends for the six months ended August 31, 2025 were $247,725, as compared to $21,376, for the same period in 2024. The increase was
due to dividends paid to the holders of shares of Series L and Series M Preferred stock issued in connection with debt conversions in
December 2024 and February of 2025. 

 The
net loss on the share of net earnings from the equity method investment was $11,307 due to losses incurred in FSA from March 1, 2025
through April 9, 2025 when the full acquisition was finalized. 

 The
net gain on discontinued operations for the six months ended August 31, 2025 was $0 as compared to $7,778 for the same period in 2024. 

 Our
net loss applicable to common stockholders for the six months ended August 31, 2025, was $7,603,113, as compared to $3,534,743 for the
same period in 2024, an increase of $4,068,370, or 115%. The increase was primarily attributable to an increase in operating loss from
continued operations of $4,420,921 and an increase in preferred dividends of $226,349, a loss on the 49% share of net earnings for the
equity method investee of $11,307, and a decrease in income from discontinued operation of $7,778, partially offset by an increase in
other income of $597,985. 

 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 Quarterly Report, 

 As
of August 31, 2025, we had $1,837,654 in cash and a working capital deficit of $1,477,647, as compared to $1,062,367 in cash and a working
capital deficit of $105,577 as of February 28, 2025. Additionally, at August 31, 2025, the amount due under our related party line of
credit totaled $2,831,575. 

 Given
the lack of significant revenue since inception, NextTrip has financed its operations primarily through the issuance of short-term promissory
notes, advances from related parties, and private placements of its securities. 

 On
May 6, 2025, we entered into a Line of Credit Agreement (the “MIP Line of Credit”) with Monaco Investment Partners II, LP
(“MIP”) providing the Company with a $3,000,000 revolving line of credit. The MIP Line of Credit allows the Company to request
advances thereunder from time to time until May 31, 2027, the maturity date. Advances made under the MIP Line of Credit bear simple interest
at a rate of 12% per annum, calculated from the date of each respective advance. Accrued interest shall be payable on a monthly basis,
no later than the 10th day of the subsequent month. The full outstanding principal balance, together with any accrued and unpaid interest,
shall be due and payable in full by the Company on the maturity date. The Company may, at its option, prepay any borrowings under the
MIP Line of Credit, in whole or in part, at any time prior to the maturity date, without penalty. Mr. Monaco controls MIP. 

 We
received an initial advance of $1,045,000 under the MIP Line of Credit, which was used to repay (i) a $400,000 cash advance previously
made by the Trust to the Company (ii) and all outstanding indebtedness under the terms of the Trust Notes, totaling $645,000. Subsequent
advances through August 2025 totaled $1,786,575, bringing the total outstanding principal at August 31, 2025 to $2,831,575. From September
1, 2025 through September 10, 2025 additional advances totaled $168,425, and as of September 10, 2025 the outstanding principal balance
was $3,000,000, which is the maximum amount available under the MIP Line of Credit. 

 At
August 31, 2025, there were other outstanding short-term notes payable in the aggregate amount of $563,501, which had maturity dates
between September 15, 2025 and December 31, 2025. 

 Subsequent
to August 31, 2025, on September 10, 2025, the Company entered into securities purchase agreements (each a “Series Q Purchase Agreement”)
with Andy Kaplan and Jimmy Byrd, two of our independent directors, pursuant to which the Company issued and sold respectively, 31,250
and 50,000 restricted shares of newly designated Series Q Nonvoting Convertible Preferred Stock of the Company (the “Series Q Preferred”),
(the “Series Q Offering”) at a purchase price of $3.20 per share, resulting in proceeds to the Company of $260,000. 

 53 

 On
September 26, 2025, the Company sold a short-term promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of $269,000.
The note includes an OID of $37,000, and bears a one-time interest charge of 13%, which was applied on the issuance date to the principal.
The note is payable in five installments, with the first payment in the amount of $151,985 due on March 30, 2026, and the remaining four
equal installments of $21,484 are due on the 30 th of each of the next four successive months. The note may be prepaid at any
time with no prepayment penalty. Upon the event of default by the Company, any unpaid principal and interest may be converted to common
stock at the election of 1800 Diagonal Lending LLC. 

 On October 8, 2025, the Company entered into a securities
purchase agreement with Caesar Capital Group LLC, pursuant to which the Company issued and sold 62,500 shares of common stock at a purchase
price of $3.20 per share, resulting in total proceeds of $200,000.

 We
will need to raise additional funds through equity or debt financings or other means to support our on-going operations, increase market
penetration of our products, expand the marketing and development of our travel and technology driven products, provide capital expenditures
for additional equipment and development costs, payment obligations, and systems for managing the business including covering other operating
costs and maintaining compliance with Nasdaq listing requirements until planned revenue streams are fully implemented and begin to offset
the our operating costs. The Company estimates that it will require a minimum of $5.5 million to continue operations for the next twelve
months. 

 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. 

 Net
Cash Used in Operating Activities 

 Net
cash used in operating activities from continuing operations totaled $470,283 during the six months ended August 31, 2025 as compared
to $1,960,326 during the same period in 2024, a decrease of $1,490,043, or 76.0%. 

 During
the six months ended August 31, 2025, the net cash used in operating activities was the result of a net loss of $7,355,388 before payment
of preferred dividends, partially offset by changes in working capital of $2,149,102, and non-cash expenses of $4,736,003 related to
stock options issued to former directors totaling $2,368,709, employee stock-based compensation of $138,325, depreciation and amortization
of $423,274, amortization of prepaid expenses of $1,323,199, amortization of debt discount of $402,846, a write-off of technology costs
of $19,550 related to an abandoned software implementation, and a loss on the extinguishment of debt of $70,100, partially offset by
a gain on the derivative liability of $10,000. Changes in working capital were driven by an increase in deferred revenue of $2,000,939
related to the TA Pipeline acquisition, an increase in accounts payable and accrued expenses of $87,598, a decrease in prepaid expenses
of $206,382, and the assumption of the SBA EIDL loan from FSA of $98,532 partially offset by an increase in accounts receivable of $244,349. 

 During
the six months ended August 31, 2024, the net cash used in operating activities was the result of a net loss of $3,521,145 before preferred
dividends, partially offset by changes in working capital of $1,147,584, and non-cash expenses of $413,235 related to depreciation and
amortization of $383,000 and stock-based compensation of $30,235. Changes in working capital were driven by a decrease in accounts receivable
of $22,881, a decrease in prepaid expenses of $96,051, and an increase in accounts payable and accrued expenses of $1,033,506, partially
offset by an increase in security deposits of $3,000 and a decrease in deferred revenue of $1,854. 

 Net
Cash Used in Investing Activities 

 Net
cash used in investing activities during the six months ended August 31, 2025 was $1,752,168, which compares to $389,568 of cash
used in investing activities during the same period of 2024, an increase of $1,362,600, or 349.8%. The increase resulted
from $900,000 related to the acquisition of FSA, $300,000 related to the Journy.tv asset purchase and $443,168 related to the
acquisition of TA Pipeline LLC, partially offset by a decrease of $280,568 in capitalized software development costs. 

 Net
Cash Provided by Financing Activities 

 Net
cash provided by financing activities for the six months ended August 31, 2025 was $2,997,738 as compared to $2,120,317 for the same
period in 2024. The increase of $877,421, or 41.4%, was due to an increase in advances from related parties of $654,683 and proceeds
from private placements of $396,500, partially offset by a reduction in notes payable of $173,762. 

 54 

 Our
ability to continue to fund our working capital needs will be dependent upon the success of our efforts to generate revenues from our
operations, and by obtaining additional capital from the sale of securities or by borrowing funds from lenders to fulfill our business
plans. If we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities
may have rights, preferences or privileges senior to those of existing holders of our common stock. There is no assurance that we will
be successful in obtaining additional funding. The Company is unable to predict the effect a global recession or geopolitical events,
including the on-going conflict in Ukraine, may have on its access to the financing markets. If we fail to obtain sufficient funding
when needed, we may be forced to delay, scale back or eliminate all or a portion of our commercialization efforts and operations. 

 Other
than the related party promissory notes as described in NOTE 10 – Related Party Transactions to the financial statements included
elsewhere in this Quarterly Report, we have no lines of credit or other financing arrangements. 

 Inflation,
changing prices and rising interest rates have had no material effect on our continuing operations over our two most recent fiscal years.
However, continued unfavorable trends may affect the prices we pay for materials and other goods and services necessary to our business,
thus increasing our use of cash. 

 We
have no off-balance sheet arrangements as defined in Item 303(a) of Regulation S-K. 

 ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 

 Not
applicable.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
NextTrip, Inc. 10-Q

Item 2. Management’s Discussion and Analysis
