NextTrip, Inc. 10-Q

ITEM 1. LEGAL PROCEEDINGS. On July 13, 2026, Luis Barberi, Mitch Toren, and Ashish Tembe, the former members of TA Pipeline LLC, filed a Demand for Arbitration against the Company with the American Arbitration Association, to be conducted in Las Vegas, Nevada. The claim asserts breach of the Membership Interest Purchase Agreement dated August 6, 2025, based on the Company's alleged failure to repurchase 96,774 restricted shares of the Company's common stock at the $3.10 per share Base Price following the claimants’ February 24, 2026 exercise of a put right under the agreement. The claimants seek damages of not less than $299,999.40, together with attorneys' fees, pre-judgment and post-judgment interest, and arbitration costs. The Company believes the claimants are in breach of the agreement, believes it has meritorious defenses, and intends to defend the matter vigorously and to assert available counterclaims. Other than as described above, from time to time, the Company is subject to various claims, disputes, and legal proceedings arising in the ordinary course of its business, including matters relating to employment, contractual, and commercial relationships. The Company is not currently a party to any other legal proceeding that management believes is reasonably likely to have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows. Regardless of the outcome, litigation and other proceedings can have an adverse impact on the Company because of associated defense and settlement costs, the diversion of management resources, and other factors.