NextTrip flags going-concern doubt, $3.20M deficit
The secured note's 14 monthly installments begin in November 2026 and may require cash settlement at 104% when share limits apply.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
NextTrip, Inc. reported results for the three and six months ended August 31, 2026. Revenue for the three-month period was $546,687, compared with $757,648 a year earlier; six-month revenue was $1,998,422, compared with $896,475.
Three-month net loss was $3,723,683 versus $2,898,155; six-month net loss was $6,849,152 versus $7,355,388. Operating cash used in the six months was $4,803,656, compared with $470,283. Cash was $1,145,136 as of August 31, 2026, versus $1,696,090 as of February 28, 2026.
NextTrip reported a $3,195,601 working capital deficit and substantial doubt about its ability to continue as a going concern within one year after the financial statements are issued. A $4,600,000 senior secured convertible note issued July 21, 2026 is repayable in 14 monthly installments of $328,571 beginning November 2026. NextTrip may elect share settlement subject to a share issuance cap and beneficial ownership limitation; installments must be paid in cash at 104% of the installment amount when those limits are reached or shares otherwise cannot be issued. The resale registration statement covering note shares became effective August 27, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointSix-month revenue increased to $1,998,422 from $896,475.
- Moderate pointSix-month net loss declined to $6,849,152 from $7,355,388.
Negative
- Major pointGoing-concern doubt accompanies a $3,195,601 working capital deficit.
- Moderate pointQuarterly revenue fell to $546,687 from $757,648.
- Moderate pointQuarterly net loss widened to $3,723,683 from $2,898,155.
- Moderate pointSix-month operating cash used rose to $4,803,656 from $470,283.
Filing Explained
At August 31, $500,000 in unpaid obligations to former TA members remained subject to arbitration; potential share issuance could dilute holders.
At
As of
At August 31, $500,000 payable to former TA members—
Key Figures
Key Terms
equity method financial
measurement alternative financial
anti-dilutive effect financial
beneficial ownership limitation financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was NTRP's revenue in the quarter ended August 31, 2026?
How much did NTRP lose in the quarter ended August 31, 2026?
What are the repayment terms of NTRP's convertible note?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
Commission file number:
NEXTTRIP, INC.
(Exact name of registrant as specified in its charter)
| ||
(State or other jurisdiction of incorporation or organization) |
| (IRS Employer Identification No.) |
(Address of principal executive offices)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading symbol |
| Name of each exchange on which registered |
|
| The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Table of Contents
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated Filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of October 14, 2026, the issuer had
Table of Contents
NEXTTRIP, INC.
FORM 10-Q
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION |
3 |
|
|
ITEM 1. FINANCIAL STATEMENTS |
3 |
|
|
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
49 |
|
|
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
77 |
|
|
ITEM 4. CONTROLS AND PROCEDURES |
77 |
|
|
PART II - OTHER INFORMATION |
77 |
|
|
ITEM 1. LEGAL PROCEEDINGS |
77 |
|
|
ITEM 1A. RISK FACTORS |
78 |
|
|
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
79 |
|
|
ITEM 3. DEFAULTS UPON SENIOR SECURITIES |
80 |
|
|
ITEM 4. MINE SAFETY DISCLOSURES |
80 |
|
|
ITEM 5. OTHER INFORMATION |
80 |
|
|
ITEM 6. EXHIBITS |
80 |
|
|
SIGNATURES |
82 |
2
Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NEXTTRIP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
| August 31, 2026 |
|
| February 28, 2026 |
| ||
|
| (unaudited) |
|
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| | |
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| |
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| |
ASSETS |
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| |
|
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| |
Cash and cash equivalents |
| $ |
|
| $ |
| ||
Accounts receivable, net |
|
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|
|
| ||
Prepaid expenses and other current assets |
|
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|
|
| ||
Total Current Assets |
|
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|
|
| ||
Non-Current Assets |
|
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| |
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| |
Property and equipment, net |
|
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|
|
| ||
Intangible assets, net |
|
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|
|
| ||
Security deposit |
|
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|
| ||
Goodwill |
|
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|
|
| ||
Investments in equity securities and equity method investee |
|
|
|
|
|
| ||
Total Non-Current Assets |
|
|
|
|
|
| ||
Total Assets |
| $ |
|
| $ |
| ||
|
|
|
| |
|
|
| |
LIABILITIES |
|
|
| |
|
|
| |
Current Liabilities |
|
|
| |
|
|
| |
Accounts payable |
| $ |
|
| $ |
| ||
Accrued expenses |
|
|
|
|
|
| ||
Deferred revenue |
|
|
|
|
|
| ||
Derivative liability |
|
|
|
|
|
| ||
Contingent consideration |
|
|
|
|
|
| ||
Licensing & royalty payment obligations, current portion |
|
|
|
|
|
| ||
Convertible note payable, current portion, net of discount |
|
|
|
|
|
| ||
Notes payable |
|
|
|
|
|
| ||
Total Current Liabilities |
|
|
|
|
|
| ||
Non-Current Liabilities |
|
|
| |
|
|
| |
SBA EIDL loan |
|
|
|
|
|
| ||
Licensing & royalty payment obligations, net of current portion |
|
|
|
|
|
| ||
Line of Credit – related parties |
|
|
|
|
|
| ||
Convertible note payable, net of current portion and discount |
|
|
|
|
|
| ||
Warrant liability |
|
|
|
|
|
| ||
Total Non-Current Liabilities |
|
|
|
|
|
| ||
Total Liabilities |
|
|
|
|
|
| ||
|
|
|
| |
|
|
| |
Commitments and Contingencies (Note 17) |
|
| - |
|
|
| - |
|
|
|
|
| |
|
|
| |
Mezzanine Equity |
|
|
| |
|
|
| |
Common Stock, par value $0.001; 250,000,000 shares authorized; 0 and 96,774 shares issued and outstanding, respectively |
|
|
|
|
|
| ||
Total Mezzanine Equity |
|
|
|
|
|
| ||
|
|
|
| |
|
|
| |
Stockholders' Equity |
|
|
| |
|
|
| |
Preferred Stock, par value $0.001; 10,000,000 shares authorized; 153,928 and 100,316 shares issued and outstanding, respectively |
|
|
|
|
|
| ||
Common Stock, par value $0.001; 250,000,000 shares authorized; 14,989,327 and 13,978,171 shares issued and outstanding, respectively |
|
|
|
|
|
| ||
Additional Paid in Capital |
|
|
|
|
|
| ||
Accumulated deficit |
|
| ( | ) |
|
| ( | ) |
Total Stockholders’ Equity |
|
|
|
|
|
| ||
Total Liabilities, Mezzanine and Stockholders’ Equity |
| $ |
|
| $ |
| ||
See accompanying notes to condensed consolidated financial statements.
3
Table of Contents
NEXTTRIP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
| Three Months Ended August 31, |
|
| Six Months Ended August 31, |
| ||||||||||
|
| 2026 |
|
| 2025 |
|
| 2026 |
|
| 2025 |
| ||||
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Cost of revenue (exclusive of depreciation and amortization, shown separately below) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Gross profit (loss) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Operating Expenses: |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Salaries and benefits |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Stock based compensation |
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Professional service fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Technology |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Organization costs |
|
|
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|
|
|
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|
|
| ||||
Depreciation and amortization |
|
|
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|
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|
| ||||
Provision for credit loss |
|
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|
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|
|
| ||||
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating loss |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Other Income (Expenses) |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) on extinguishment of liability |
|
|
|
|
|
|
|
|
|
|
| ( | ) | |||
Gain/(Loss) on derivative liability and contingent consideration |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gain/(Loss) revaluation of warrant liability |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gain/(Loss) on transaction costs allocable to warrant liability |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
| ||
Interest income (expense), net |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total Other Income (Expense) |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
| ||
Net loss before provision for income taxes |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net loss before share of net loss in equity method investee |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Share of net loss of equity method investee |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) | |
Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Preferred dividends |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Net Loss Applicable to Common Stockholders |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Basic and diluted loss per common share |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Basic and diluted weighted average number of common shares |
|
|
|
|
|
|
|
|
|
|
|
| ||||
See accompanying notes to condensed consolidated financial statements.
4
Table of Contents
NEXTTRIP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
For the Three Months Ended August 31, 2026, and August 31, 2025
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
|
|
| |
|
|
| | |||||||||||
|
| Shares |
|
| Preferred |
|
| Shares |
|
| Common |
|
| Paid-in |
|
| Accumulated |
|
|
|
| | ||||||
|
| Outstanding |
|
| Stock |
|
| Outstanding |
|
| Stock |
|
| Capital |
|
| Deficit |
|
| Total |
| |||||||
Balances, May 31, 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Preferred stock dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||||
Issuance of securities pursuant to private placements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of common shares for third party services |
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of securities for equity investments |
|
| - |
|
|
|
|
|
| 50,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Issuance of securities from exercise of warrants |
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
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| |||||||
Issuance of securities for past directors services |
|
|
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|
|
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|
|
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| |||||||
Issuance of securities for debt conversion |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Reclassification of Warrants pursuant to predecessor Series B Preferred Redemption |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||
Issuance of warrants in connection with bridge loan financing |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Reclassification of Mezzanine shares |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Offering costs |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Stock based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
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| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Balances, August 31, 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||||
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
|
|
| |
|
|
| | |||||||||||
|
| Shares |
|
| Preferred |
|
| Shares |
|
| Common |
|
| Paid-in |
|
| Accumulated |
|
|
|
| | ||||||
|
| Outstanding |
|
| Stock |
|
| Outstanding |
|
| Stock |
|
| Capital |
|
| Deficit |
|
| Total |
| |||||||
Balances, May 31, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||||
Net Loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Preferred Stock Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||||
Issuance of securities pursuant to private placements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of securities for third party services |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Warrants issued in connection with debt conversion |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Issuance of securities for directors’ services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Balances, August 31, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||||
See accompanying notes to condensed consolidated financial statements.
5
Table of Contents
For the Six Months Ended August 31, 2026, and August 31, 2025
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
|
|
| |
|
|
| | |||||||||||
|
| Shares |
|
| Preferred |
|
| Shares |
|
| Common |
|
| Paid-in |
|
| Accumulated |
|
|
|
| | ||||||
|
| Outstanding |
|
| Stock |
|
| Outstanding |
|
| Stock |
|
| Capital |
|
| Deficit |
|
| Total |
| |||||||
Balances, February 28, 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Preferred stock dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||||
Issuance of securities pursuant to private placements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of securities for third party services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of securities for equity investments |
|
| - |
|
|
|
|
|
| 50,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Issuance of securities from exercise of warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of securities for past directors services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of securities for debt conversion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of warrants in connection with bridge loan financing |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Reclassification of Mezzanine shares |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Offering costs |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||
Stock based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||||
|
|
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| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Balances, August 31, 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||||
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
|
|
| |
|
|
| | |||||||||||
|
| Shares |
|
| Preferred |
|
| Shares |
|
| Common |
|
| Paid-in |
|
| Accumulated |
|
|
|
| | ||||||
|
| Outstanding |
|
| Stock |
|
| Outstanding |
|
| Stock |
|
| Capital |
|
| Deficit |
|
| Total |
| |||||||
Balances, February 28, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||||
Net Loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Preferred stock dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||||
Issuance of preferred shares for FSA Travel, LLC acquisition |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of common shares for JOURNY TV asset acquisition |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of common shares pursuant to private placements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of common shares pursuant to reverse acquisition of Sigma |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
| ||||||
Issuance of common shares for third party services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Warrants issued in connection with debt conversion |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Warrants issued in connection with bridge loan financing |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Issuance of securities for directors’ services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Issuance of stock options to employees |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Balances, August 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||||
See accompanying notes to condensed consolidated financial statements.
6
Table of Contents
NEXTTRIP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
| Six Months Ended |
| |||||
|
| August 31, 2026 |
|
| August 31, 2025 |
| ||
OPERATING ACTIVITIES |
|
|
| |
|
|
| |
Net Income (Loss) – Continuing Operations |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to Reconcile Net Income (Loss) to Net Cash Used in Operating Activities: |
|
|
| |
|
|
| |
Noncash Expenses: |
|
|
| |
|
|
| |
Depreciation and amortization – property and equipment and intangibles |
|
|
|
|
|
| ||
Amortization of debt discount |
|
|
|
|
|
| ||
Shares issued for professional services |
|
|
|
|
|
| ||
Write-off of capitalized technology expenses |
|
|
|
|
|
| ||
Provision for credit loss |
|
|
|
|
|
| ||
Gain on derivative liability |
|
| ( | ) |
|
| ( | ) |
Revaluation of warrant (non-cash portion) |
|
| ( | ) |
|
|
| |
Stock-based compensation - employees |
|
| ( | ) |
|
|
| |
Stock-based compensation - directors |
|
|
|
|
|
| ||
Loss on extinguishment of liability |
|
|
|
|
|
| ||
Share of net loss of equity method investee |
|
|
|
|
|
| ||
|
|
|
| |
|
|
| |
Change in Assets and Liabilities: |
|
|
| |
|
|
| |
Accounts receivable |
|
| ( | ) |
|
| ( | ) |
Related party receivable |
|
| ( | ) |
|
|
| |
Prepaid expenses |
|
|
|
|
|
| ||
Accounts payable and accrued expenses |
|
|
|
|
|
| ||
Deferred revenue |
|
| ( | ) |
|
|
| |
Licensing & royalty payment obligations, current portion |
|
|
|
|
|
| ||
Licensing & royalty payment obligations, net of current portion |
|
| ( | ) |
|
|
| |
NET CASH USED IN OPERATING ACTIVITIES |
|
| ( | ) |
|
| ( | ) |
|
|
|
| |
|
|
| |
INVESTING ACTIVITIES |
|
|
| |
|
|
| |
Capitalized software development and production costs |
|
| ( | ) |
|
| ( | ) |
TA Pipeline LLC acquisition |
|
|
|
|
| ( | ) | |
FSA Travel LLC acquisition |
|
|
|
|
| ( | ) | |
JOURNY TV asset purchase |
|
|
|
|
| ( | ) | |
NET CASH USED IN INVESTING ACTIVITIES |
|
| ( | ) |
|
| ( | ) |
|
|
|
| |
|
|
| |
FINANCING ACTIVITIES |
|
|
| |
|
|
| |
Proceeds from issuance of preferred shares |
|
|
|
|
|
| ||
Proceeds from issuance of common shares |
|
|
|
|
|
| ||
Proceeds from exercise of warrants |
|
|
|
|
|
| ||
Offering costs |
|
| ( | ) |
|
|
| |
Proceeds from Series B preferred offering |
|
|
|
|
|
| ||
Offering costs- Series B preferred |
|
| ( | ) |
|
|
| |
Redemption of Series B preferred |
|
| ( | ) |
|
|
| |
Notes Payable |
|
|
|
|
| ( | ) | |
Proceeds for issuance of convertible note and warrant |
|
|
|
|
|
| ||
Payment of debt issuance costs |
|
| ( | ) |
|
|
| |
Notes Payable- related parties |
|
|
|
|
|
| ||
NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
|
|
|
|
| ||
|
|
|
| |
|
|
| |
NET CHANGE IN CASH FOR PERIOD |
|
| ( | ) |
|
|
| |
|
|
|
| |
|
|
| |
CASH AT BEGINNING OF PERIOD |
|
|
|
|
|
| ||
|
|
|
| |
|
|
| |
CASH AT END OF PERIOD |
| $ |
|
| $ |
| ||
|
|
|
| |
|
|
| |
Supplemental Disclosures: |
|
|
| |
|
|
| |
Noncash Investing and Financing Activities Disclosure: |
|
|
| |
|
|
| |
Issuance of preferred shares pursuant to FSA Travel, LLC acquisition |
| $ |
|
| $ |
| ||
Issuance of common shares pursuant to JOURNY TV asset purchase |
| $ |
|
| $ |
| ||
Issuance of common shares pursuant to TA Pipeline LLC acquisition |
| $ |
|
| $ |
| ||
Issuance of common shares for third party services |
| $ |
|
| $ |
| ||
Issuance of common shares to former directors for accrued fees |
| $ |
|
| $ |
| ||
Issuance of preferred shares pursuant to line of credit conversion including accrued interest |
| $ |
|
| $ |
| ||
Issuance of common shares pursuant to YADA Commerce, Inc. equity investment |
| $ |
|
| $ |
| ||
Issuance of common shares for capitalized software and production costs |
| $ |
|
| $ |
| ||
Warrant liability recognized on issuance of convertible note |
| $ |
|
| $ |
| ||
Reclassification of mezzanine equity to accrued liabilities |
| $ |
|
| $ |
| ||
Reclassification of contingent consideration to accrued liabilities |
| $ |
|
| $ |
| ||
Preferred stock dividends |
| $ |
|
| $ |
| ||
Disclosure of Cash Paid for: |
|
|
| |
|
|
| |
Interest |
| $ |
|
| $ |
| ||
Income Taxes |
| $ |
|
| $ |
| ||
See accompanying notes to condensed consolidated financial statements.
7
Table of Contents
NEXTTRIP, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2026
NOTE 1 - Business Description and Going Concern
Sigma Additive Solutions, Inc. (“Sigma”), the legal acquiror of NextTrip Holdings, Inc., 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, 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.”
The Company’s corporate office is located at 1560 Sawgrass Corporate Parkway, Suite 400, Sunrise Florida 33323. The condensed consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries, NextTrip Holdings Inc. incorporated on October 22, 2015, Extraordinary Vacations USA, Inc., incorporated on June 24, 2002, Five Star Alliance, LLC, organized on March 9, 2018, and TA Pipeline, LLC, organized on July 1, 2021.
Prior to the NextPlay Exchange Agreement, as described below, NextTrip Holdings, Inc. (“NTH”) was a wholly-owned subsidiary of NextTrip Group, LLC (“NTG”), which in turn, was a wholly-owned subsidiary of NextPlay Technologies, Inc. (“NextPlay”). All of the business operations of NTG were conducted through its subsidiaries. On January 25, 2023, NextPlay and NTG entered into an Amended and Restated Separation Agreement, Amended and Restated Operating Agreement, and Exchange Agreement (the “NextPlay Exchange Agreement”), whereby NextPlay transferred its interest in the travel business to NTG. Pursuant to the NextPlay Exchange Agreement, NextPlay exchanged
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.
Reverse Acquisition
On October 12, 2023, the Company (then known as Sigma) entered into a Share Exchange Agreement (as amended, the “Exchange Agreement”) with NTH, NTG, and William Kerby (the “NextTrip Representative”). Under the terms of the Exchange Agreement, the parties agreed that NTG would sell and transfer to the Company all of the issued and outstanding shares of NTH in exchange for
8
Table of Contents
The Contingent Shares, together with the Closing Shares, will not exceed
In accordance with ASC 805-40-45-1, the condensed consolidated financial statements prepared following a reverse acquisition are issued under the name of the legal parent (NextTrip, Inc., f/k/a Sigma Additive Solutions, Inc.) but described in the notes to the financial statements as a continuation of the financial statements of the legal subsidiary (NTH), with one adjustment, which is to retroactively adjust the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree. That adjustment is required to reflect the capital of the legal parent.
Under ASC 805-40-45-2, the condensed consolidated financial statements represent the continuation of the legal subsidiary except for the capital structure, as follows:
| (a) | The assets and liabilities of the legal subsidiary recognized and measured at their pre-combination carrying amounts; |
| (b) | The assets and liabilities of the legal parent recognized and measured in accordance with the guidance in this topic applicable to business combinations (ASC 805); |
| (c) | The retained earnings and other equity balances of the legal subsidiary before the business combination; |
| (d) | The amount required to be recognized as issued equity interests in the condensed consolidated financial statements determined by adding the issued equity interest of the legal subsidiary outstanding immediately before the business combination to the fair value of the legal parent determined in accordance with the guidance in ASC 805 applicable to business combinations. However, the equity structure reflects the equity structure of the legal parent, including the equity interests the legal parent issued to affect the combination. Accordingly, the equity structure of the legal subsidiary is restated using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent issued in the reverse acquisition. |
The assets and liabilities of Sigma were recognized at fair value pursuant to ASC 805.
Going Concern - As of August 31, 2026, and February 28, 2026, the Company had an accumulated deficit of $
On July 21, 2026, the Company issued a senior secured convertible promissory note in the principal amount of $
In light of the foregoing, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these financial statements are issued.
9
Table of Contents
NOTE 2 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared by the Company in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America. The financial statements have been prepared on a consolidated basis with those of the Company’s wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at August 31, 2026 and 2025 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The Company suggests these financial statements be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2026. The results of operations for the period ended August 31, 2026 are not necessarily indicative of the operating results for the full year.
Reclassification
Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on the net earnings (loss) or financial position.
Fair Value of Financial Instruments - The Company applies ASC 820, “Fair Value Measurements.” This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
| ● | Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
|
|
|
| ● | Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
|
|
|
| ● | Level 3 - inputs to valuation methodology are unobservable and significant to the fair measurement. |
The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables, accounts payable, and accrued expenses each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.
Derivative Instruments and Warrants
The Company does not use derivative instruments for hedging of market risk or for trading or speculative purposes. The Company evaluates financial instruments issued, and features embedded in those instruments, to determine whether they meet the definition of a derivative in ASC 815-10 and, for instruments indexed to the Company’s own stock, whether they meet the conditions for equity classification in ASC 815-40. Instruments and embedded features that require liability classification are recorded at fair value at issuance and remeasured at each reporting date, with changes in fair value recognized in the consolidated statements of operations. Equity-classified instruments are recorded in additional paid-in capital at issuance and are not subsequently remeasured. The classification of each instrument is reassessed at each reporting date.
The restricted common shares issued by the Company pursuant to the acquisition of TA Pipeline LLC (“TA”) contained an option (the “Put Option”), which the Company accounted for as a derivative liability. As described in Note 8, on February 24, 2026 the former TA Members delivered notice purporting to exercise the Put Option with respect to all of the TA Closing Shares, and during the three months ended August 31, 2026 the Company derecognized the remaining derivative liability upon reclassifying the TA Closing Shares as a liability. No derivative liability in respect of the Put Option was outstanding at August 31, 2026.
The Common Stock Purchase Warrant issued to Lind Global Fund III LP on July 21, 2026 is classified as a liability and measured at fair value on a recurring basis, as described in Note 14. The Company allocates proceeds from an instrument issued together with a liability-classified warrant first to the warrant at its fair value, with the residual allocated to the host instrument, and allocates issuance costs between the instruments on the same basis. Issuance costs allocated to a liability-classified warrant are expensed as incurred.
10
Table of Contents
Debt Discount and Issuance Costs
Original issue discount, amounts allocated to freestanding instruments issued with debt, and debt issuance costs allocated to debt are presented as a direct deduction from the carrying amount of the related debt and are accreted to interest expense over the term of the debt using the effective interest method. Where debt is repayable in installments, the unamortized discount is allocated between the current and non-current portions of the debt on a pro rata basis consistent with the allocation of principal.
Investments in Equity Method Investees
The Company holds investments in certain entities that are accounted for under the equity method of accounting, as well as equity securities without readily determinable fair values that are measured under the measurement alternative in ASC 321, “Investments - Equity Securities.” Under the equity method, investments in entities in which the Company has significant influence, but not control, are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the investees’ earnings or losses and other comprehensive income.
The Company determines the existence of significant influence based on various factors, including representation on the investees’ board of directors, participation in policy-making processes, and material intercompany transactions.
The Company’s equity method investments are evaluated periodically for impairment by assessing whether events or changes in circumstances indicate that the carrying value of the investment may not be recoverable. When such indicators exist, the Company performs an impairment test and recognizes an impairment loss to the extent that the carrying amount of the investment exceeds its fair value.
Distributions received from equity method investees that exceed cumulative earnings recognized by the Company are considered a return of investment and are recorded as a reduction in the carrying amount of the investment.
Adjustments resulting from changes in the Company’s ownership interest in equity method investees that do not result in a loss of significant influence are accounted for prospectively.
Basis Difference
In accordance with ASC 323, “Investments - Equity Method and Joint Ventures,” the Company records a basis difference when the carrying value of its equity method investment differs from its share of the investee’s fair value of net assets at the acquisition date. This basis difference is allocated to the investee’s identifiable assets and liabilities based on their fair values. The amortization of any basis difference related to depreciable assets, such as property, plant, and equipment, is recognized in the Company’s share of the investee’s earnings or losses. Any basis difference related to non-depreciable assets, including goodwill, is generally not amortized, but is subject to impairment testing as necessary.
The Company assesses the impact of any basis differences on its earnings and the carrying value of its equity method investments. If a basis difference is determined to exist, the appropriate adjustments are made to reflect the amortization of such differences in the condensed consolidated financial statements.
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 measured at cost, less any impairment, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. The carrying amount is evaluated for impairment each reporting period through a qualitative assessment of impairment indicators, and if an impairment indicator exists, an impairment loss is recognized in the statement of operations for the amount by which the carrying amount exceeds fair value.
11
Table of Contents
Equity in Earnings of Equity Method Investees
The Company’s share of earnings or losses from equity method investees is recognized in the consolidated statement of operations within “Share of net loss of equity method investee,” net of any related income taxes.
Loss Per Share – The computation of loss per share is based on the weighted average number of shares outstanding during the period in accordance with ASC Topic No. 260, “Earnings Per Share.” Shares underlying the Company’s outstanding warrants, options, preferred stock and convertible note were excluded due to the anti-dilutive effect they would have on the computation. At August 31, 2026 and 2025, the Company had the following common shares underlying these instruments:
|
| August 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Warrants |
|
|
|
|
|
| ||
Stock Options |
|
|
|
|
|
| ||
Preferred Stock |
|
|
|
|
|
| ||
Convertible Note |
|
|
|
|
|
| ||
Total Underlying Common Shares |
|
|
|
|
|
| ||
The following table shows the amounts used in computing loss per share and the effect on net loss and the weighted average number of shares of dilutive potential common stock for the periods three and six months ended August 31, 2026 and 2025:
|
| Three Months Ended August 31, |
|
| Six Months Ended August 31, |
| ||||||||||
|
| 2026 |
|
| 2025 |
|
| 2026 |
|
| 2025 |
| ||||
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Preferred dividends |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Net loss applicable to common stockholders |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Weighted average number of common shares outstanding used in loss per share during the period (denominator) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Dilutive loss per share was not presented, as the Company’s outstanding common and preferred warrants, stock options and preferred stock common equivalent shares and shares issuable upon conversion of the convertible note for the periods presented would have had an anti-dilutive effect. At August 31, 2026, the Company had outstanding warrants to purchase
In addition, the Company may elect to settle monthly installments of principal under the convertible note in shares of common stock at
Accounting Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated by management. Significant accounting estimates that may materially change in the near future are revenue recognition, including principal versus agent determinations; impairment of goodwill, intangible assets and other long-lived assets; the carrying value of equity investments; the fair value of the warrant liability; values of stock compensation awards and stock equivalents granted as offering costs; and the allowance for credit losses.
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Revenue Recognition – The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. The core principle of ASC 606 is the recognition of revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. In general, we determine revenue recognition by: (1) identifying the contract, or contracts, with our customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services. The Company’s revenue is derived primarily from its Travel segment, through the sale of travel packages and other travel products and commissions and fees earned on travel bookings, and from its Media segment, through advertising and sponsorships.
The Company recognizes revenue from travel packages when the customer has purchased the product and the performance obligation is satisfied, which occurs at the earlier of the date of travel or the date on which the customer’s cancellation period has expired. Revenue for customer travel packages purchased directly from the Company is 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.
For travel packages sold directly by the Company, the Company controls the specified travel product before it is transferred to the customer and is therefore a principal, based on, among other factors, the following:
| ● | The Company is primarily responsible for fulfilling 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. |
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| ● | 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).
For certain travel products, primarily luxury hotel bookings made through Five Star Alliance, the supplier or wholesaler controls pricing and provides the travel service, and the Company’s performance obligation is to arrange for the travel product to be provided by the supplier. In these arrangements, the Company acts as an agent and recognizes revenue on a net basis, equal to the commission or fee it retains, upon the date of travel. Media segment revenue, consisting primarily of advertising and sponsorship revenue from JOURNY TV and Travel Magazine, is recognized as advertisements are delivered and impressions are served and is recorded net of amounts retained by distribution partners.
Segment Reporting - In response to recent acquisitions and expanded business activities, during the third quarter of fiscal year 2026, our CODM, who is our Chief Executive Officer, requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. As a result, we have updated our reporting and beginning in the third quarter of fiscal year 2026, we reported our financial performance based on our new segments, “Travel” and “Media”. A detailed description of our operating segments as of August 31, 2026 can be found in Note 19 to the Financial Statements and in the Business Overview section of Item 2 of this Quarterly Report, entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Prior periods have been recast to conform to these newly identified segments.
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments require enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker (“CODM”) and included in the measure of segment profit or loss, an amount and description of other segment items, the title and position of the CODM, and application of the segment disclosure requirements to interim periods. The Company adopted ASU 2023-07 for its fiscal year beginning March 1, 2025. The Company began reporting under its Travel and Media reportable segments, and reflecting the interim disclosure provisions of ASU 2023-07, in the third quarter of fiscal year 2026 (the quarterly period ended November 30, 2025); prior periods have been recast to conform to the current segment presentation. Adoption affected disclosures only and did not affect the Company’s consolidated financial position, results of operations, or cash flows.
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In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The Company adopted ASU 2023-09 on a prospective basis effective for its fiscal year beginning March 1, 2025 (fiscal year ended February 28, 2026). The amendments affect annual income tax disclosures only and do not establish new interim disclosure requirements; adoption did not affect the Company’s consolidated financial position, results of operations, or cash flows, or its interim income tax disclosures.
In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. The amendments clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The Company adopted ASU 2024-04 on a prospective basis effective for its fiscal year beginning March 1, 2026. Adoption did not have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide a practical expedient that permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of current accounts receivable and current contract assets arising from transactions accounted for under Topic 606 when estimating expected credit losses. The Company adopted ASU 2025-05 on a prospective basis effective for its fiscal year beginning March 1, 2026. Adoption did not have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure in the notes to the financial statements of specified categories of expenses (including employee compensation, depreciation, and intangible asset amortization) included in relevant expense captions presented on the face of the income statement. In January 2025, the FASB issued ASU 2025-01, which clarified that ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within annual periods beginning after December 15, 2027. The Company will be required to adopt ASU 2024-03 for its annual period beginning March 1, 2027 and for interim periods beginning March 1, 2028. Early adoption is permitted. The Company is evaluating the effect of ASU 2024-03 on its disclosures, including its segment expense disclosures.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. The amendments require an entity to consider the factors in ASC 805-10-55-12 through 55-15 when determining the accounting acquirer in a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity that meets the definition of a business. The ASU is effective for the Company for annual periods beginning March 1, 2027, including interim periods within those annual periods, and is applied prospectively to acquisition transactions occurring after the initial application date. Early adoption is permitted. The Company does not expect adoption to affect previously reported business combinations; the effect on future transactions will depend on their facts and circumstances.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The amendments expand the scope exception in Topic 815 for certain contracts with underlyings based on operations or activities specific to one of the parties to the contract and clarify the accounting for share-based noncash consideration received from a customer. The ASU is effective for the Company for annual periods beginning March 1, 2027, including interim periods within those annual periods, with early adoption permitted. The Company is evaluating the effect of ASU 2025-07 on its condensed consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments remove references to prescriptive software development stages and require capitalization of eligible software costs to begin when management has authorized and committed to funding the project and it is probable that the project will be completed and the software will perform its intended function. The ASU is effective for the Company for annual periods beginning March 1, 2028, including interim periods within those annual periods, with early adoption permitted at the beginning of an annual period. The Company is evaluating the effect of ASU 2025-06 on its accounting for capitalized software development costs.
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In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the interim disclosure requirements and the applicability of Topic 270. The ASU is effective for the Company for interim periods within annual periods beginning March 1, 2028, with early adoption permitted. The Company is evaluating the effect of ASU 2025-11 on its interim disclosures.
The Company has evaluated other recently issued accounting pronouncements and does not believe that any of them will have a material effect on its condensed consolidated financial statements.
NOTE 3 - Investments
Investments are presented within “Equity investments” in non-current assets on the consolidated balance sheets. The caption comprises the Company’s equity method investment in YADA Commerce, Inc. ("YADA") and equity securities without readily determinable fair values that are measured under the measurement alternative in ASC 321. The composition of the caption by measurement basis is as follows:
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| August 31, 2026 |
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| February 28, 2026 |
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Equity method investment (ASC 323): |
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YADA |
| $ |
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| $ |
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Equity securities without readily determinable fair values, measured under the ASC 321 measurement alternative: |
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BlueFysh |
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Playbook Investors Network |
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Total equity investments |
| $ |
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| $ |
| ||
Equity Securities Without Readily Determinable Fair Values
The Company holds a
Equity Method Investment in YADA
YADA is the Company’s only investment accounted for under the equity method.
Description of the Transaction
On June 10, 2026, the Company entered into a Stock Purchase Agreement with YADA, a Florida corporation, and YADA’s founding shareholders, High Class Holdings LLC and Carbon Capital Corp (collectively, the “Founding Shareholders”). Pursuant to the agreement, the Company acquired
The Company entered into the transaction to expand its presence in social commerce and influencer marketing and to gain access to YADA’s creator network, agency relationships, and relationships within the music and live-event industry.
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Basis for Accounting as an Equity Method Investment
Notwithstanding its
YADA is not a variable interest entity for which the Company is the primary beneficiary, because the Company does not have the power to direct the activities that most significantly impact YADA’s economic performance. Under the voting interest model, the presumption of control arising from majority ownership is overcome by substantive participating rights held by the Founding Shareholders. Specifically, the Stock Purchase Agreement provides that YADA retains full operational control over its day-to-day business, including creator recruitment and management, agency operations, employment matters, vendor relationships, and execution of its business plan and establishes a five-member board of directors comprised of two directors designated by the Company, two directors designated by the Founding Shareholders, and one yet-to-be appointed independent director, with no director removable except by the party entitled to designate that director. These governance provisions remain in effect for so long as the Founding Shareholders collectively own at least
The Company has concluded that it has the ability to exercise significant influence over YADA’s operating and financial policies through its ownership interest, board representation, and related contractual rights. Accordingly, the investment is accounted for under the equity method in accordance with ASC 323-10 as of June 10, 2026. The Company has not elected the fair value option under ASC 825-10 for this investment. YADA does not meet the definition of a joint venture, as it is not under the joint control of its investors.
Initial Measurement and Basis Difference
The Company recorded the investment at $
At the acquisition date, the carrying amount of the Company’s investment of $
Subsequent Measurement and Allocation of Earnings
In connection with the Stock Purchase Agreement, the Company and YADA entered into a Cooperation and Earnout Agreement that establishes a 50/50 allocation of net profits between the Company and the Founding Shareholders with respect to specified travel gift card, travel club and membership, music artist promotional event, sponsorship and advertising activities (the “Activities”). Management has concluded that this allocation is substantive and determines the parties’ economic interests in the results of the Activities. Accordingly, the Company recognizes its share of YADA’s earnings and losses based on the
Under the Cooperation and Earnout Agreement, all travel commissions, booking fees, markups, overrides and supplier commissions arising from travel bookings generated through YADA channels belong exclusively to the Company. The Company eliminates intra-entity profits on transactions with YADA to the extent of its ownership interest.
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The following summarizes the activity in the investment for the period from June 10, 2026 through August 31, 2026:
|
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| Amounts |
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Balance at June 10, 2026 |
| $ |
| |
Equity in net income (loss) of YADA |
|
| ( | ) |
Balance at August 31, 2026 |
| $ |
|
The Company recorded equity in net loss of YADA of $
The Company evaluated the investment for impairment as of August 31, 2026 and concluded that
Other Rights and Contingencies
The Company holds a right of first refusal with respect to event business opportunities requiring a capital commitment, exercisable within 48 hours, and a right of first refusal on any proposed transfer of shares by a Founding Shareholder. As of August 31, 2026,
NOTE 4 - Cooperation and Earnout Agreement
Commercial Arrangement
Concurrently with the YADA Stock Purchase Agreement, on June 10, 2026 the Company and YADA entered into a Cooperation and Earnout Agreement with an initial term of three years, automatically renewing for successive one-year periods absent 90 days’ notice of non-renewal. Under the agreement, the Company serves as YADA’s preferred travel provider for YADA-sponsored campaigns, holds the exclusive right to offer travel gift cards through YADA channels, and may offer travel club and membership products through YADA channels. Net profits from travel gift card sales, travel club and membership programs, music artist promotional events, and sponsorship and advertising sold through YADA are allocated
Earnout Incentive Program (Share-Based Compensation)
The Cooperation and Earnout Agreement establishes an earnout pool of up to
The Company has determined that the earnout awards represent compensation for post-closing services rather than contingent consideration for the acquired equity interest, because entitlement to the awards is conditioned on the Founding Shareholders’ continued provision of services to YADA and unvested awards are forfeited upon specified service-related events. Accordingly, the awards are excluded from the cost basis of the equity method investment and are accounted for in accordance with ASC 323-10-25-4 and ASC 323-10-30-3 as share-based payments granted to service providers of an equity method investee, measured at fair value under ASC 718 and recognized as compensation expense as the related services are rendered, to the extent the Company’s claim on YADA’s book value has not increased.
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NOTE 5 - Investment in Equity Securities
Investment in BlueFysh Holdings Inc.
On February 24, 2025, the Company entered into a Share Exchange Agreement with BlueFysh Holdings Inc. (“BlueFysh”), under which the Company acquired a
The Company’s investment in BlueFysh is accounted for under the measurement alternative in ASC 321-10-35-2, as the Company does not have significant influence over BlueFysh. No board appointments are contemplated as part of this transaction; however, the Company has the right to appoint a representative to the BlueFysh Advisory Committee, which will allow the Company to receive financial updates as needed and to be informed of financial events that could significantly impact the Company’s ownership position.
Since the Company’s ownership interest does not meet the criteria for significant influence pursuant to ASC 323, this investment is classified as an equity security without a readily determinable fair value and is initially recorded at cost. The Company will assess the investment for impairment in future periods and recognize any impairment losses as necessary.
NOTE 6 – Acquisition of FSA Travel, LLC
On February 6, 2025, the Company acquired a
On April 9, 2025, the Company exercised its option to purchase the remaining
The contingent consideration issued as purchase consideration provides for additional distributions to the FSA Unitholders, the amount of which is dependent on the acquired business’ achievement of certain milestones. The Company determined the fair value of the contingent consideration as of the acquisition date ( April 9, 2025) based on the probability and timing of achieving the respective milestones.
Upon completion of the acquisition of the remaining
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The Company has completed the analysis to assign fair values to all assets acquired and liabilities assumed. The table below sets forth the consideration paid and the fair value of the assets acquired and liabilities assumed for the acquisition:
Consideration paid |
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Cash |
| $ |
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Series O Preferred stock |
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Earnout Payment |
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Fair value of Initial Purchase |
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Total consideration |
| $ |
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Assets acquired and liabilities assumed |
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Cash and cash equivalents |
| $ |
| |
Accounts receivable |
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Intangibles |
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Goodwill |
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Total assets |
| $ |
| |
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Accounts payable |
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Due to FSA Unitholders |
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SBA Loan |
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Total liabilities |
| $ |
| |
Total net assets |
| $ |
|
The fair value of the working capital items, including accounts receivable, other receivables, trade payables and deferred revenue, approximates their respective carrying values at the date in which control was obtained.
The fair value of the acquired tradename and acquired technology was determined using the relief from royalty method, which utilized projected financial information. The goodwill recognized in the acquisition primarily represents synergies with the existing operations of the Company, and the value of yet-to-be-acquired/developed customers, technology, assembled workforce, and any other assets.
NOTE 7 – JOURNY TV Asset Acquisition
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 $
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 $
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The transaction was accounted for as an asset acquisition because while inputs were acquired (in the form of trademarks, distribution agreements, content licenses, and service agreements), there is not a continuation of revenues before and after the transaction. That is, due to the significant rebranding and redevelopment of the inputs acquired, the JOURNY TV assets are not producing revenue post-closing of the transaction. Additionally, an organized workforce with the necessary skills and experience to create outputs was not included in the transaction. As such, the transaction does not meet the definition of a business and is considered an asset acquisition.
On the acquisition date, the fair value of the intangible assets acquired was $
NOTE 8 – Acquisition of TA Pipeline LLC
On August 6, 2025 (the “Closing Date”), 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.
Pursuant to the TA MIPA, as consideration for the TA Acquisition, at closing, the Company (i) paid the TA Members an aggregate of $
In addition to the TA Closing Consideration, and as further consideration for the TA Acquisition, the Company was required to make an additional payment to the TA Members in the form of an earnout (the “TA Milestone Payment”) in an amount equal to five percent (
The TA MIPA also granted each TA Member a limited, one-time option (the “Put Option”), exercisable if the Fair Market Value of the Company’s common stock is less than $
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In accordance with the acquisition method of accounting, the purchase price was allocated to the assets acquired and the liabilities assumed based on their estimated fair values at the acquisition date. In connection with the acquisition, the Company incurred $
Consideration paid | | | | |
Cash | | $ | | |
Common stock | | | | |
Fair value of TA Milestone Payment | | | | |
Fair value of derivative liability | | | | |
Total consideration | | $ | | |
| | | | |
Assets acquired and liabilities assumed | | | | |
Cash and cash equivalents | | $ | | |
Intangibles | | | | |
Goodwill | | | | |
Total assets | | $ | | |
| | | | |
Deferred merchant bookings | | | | |
Total liabilities | | $ | | |
Total net assets | | $ | |
The fair value of the working capital items, including cash and deferred merchant bookings, approximates their respective carrying values at the date on which control was obtained.
The fair values of the acquired tradename, acquired supplier agreements, and acquired travel agency agreements were determined using the relief from royalty method, with or without method and multi-period excess earnings method, respectively, which utilized projected financial information. The acquired intangible assets consist of the tradename of $
Classification of TA Closing Shares Prior to Exercise
Although the
Exercise of the Put Option — TA Closing Shares
On February 24, 2026, the former TA Members delivered written notice purporting to exercise the Put Right under Section 7.5(a)(i) of the TA MIPA with respect to all
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During the three months ended August 31, 2026, based on additional information that became available regarding the dispute with the former TA Members, including the filing of the Demand for Arbitration on July 14, 2026 and the completion of the Milestone Period on August 6, 2026, management reassessed the classification of the TA Closing Shares. As a result of this reassessment, management concluded that, notwithstanding the Company’s position regarding the validity of the purported exercise, the TA Closing Shares should be accounted for as mandatorily redeemable and classified as a liability in accordance with ASC 480-10-25-7, measured as provided in ASC 480-10-30-2. Accordingly, the Company reclassified the TA Closing Shares from mezzanine equity to a liability of $
The liability is presented within accrued expenses in the consolidated balance sheet at August 31, 2026 and will be derecognized only upon payment or legal release. The TA Closing Shares remain legally outstanding pending repurchase but are excluded from shares outstanding in the computation of basic and diluted earnings (loss) per share in accordance with ASC 260-10-45-70A. Recognition of the liability does not represent an assessment by management of the likely outcome of the arbitration, including the Company’s affirmative defenses and counterclaims.
In connection with the reclassification, the Company derecognized the remaining derivative liability of $
TA Milestone Payment
The Milestone Period ended on August 6, 2026. The TA Milestone Payment is equal to
Because the Milestone Period has been completed, the TA Milestone Payment is no longer measured at fair value on a recurring basis. During the three months ended August 31, 2026, the Company adjusted the carrying amount of the obligation from $
The TA Milestone Payment is classified as a liability rather than within equity because the cash-settled portion is an obligation to transfer cash, and the share-settled portion, together with the Put Option described below, obligates the Company to transfer a fixed monetary value of $
Put Option — TA Milestone Shares
The Exercise Period applicable to the TA Milestone Shares commenced on August 6, 2026, the first anniversary of the Closing Date, and expires on November 6, 2026. The rights under Section 7.5 are exercisable only if the Fair Market Value of the Company’s common stock is less than the Base Price. The TA Milestone Shares have not been issued. If the Put Right were exercised with respect to the TA Milestone Shares, the Company would be required to settle the share-settled portion of the TA Milestone Payment in cash rather than in shares, in an amount of approximately $
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Amounts Payable to Former TA Members
At August 31, 2026, amounts payable to the former TA Members consist of the $
The fair values of the Put Option and the TA Milestone Payment measured on a recurring basis are as follows:
| | | | | | | | | | Date of Issuance – | |||
| | August 31, 2026 | | | August 06, 2025 | ||||||||
| | Fair Value | | | Input Level | | | Fair Value | | Input Level | |||
| | | | | | | | | | | | | |
Derivative liability – Put Option | | | | | | - | | | $ | | Level 3 | ||
Contingent Consideration – TA Milestone Payment | | | | | | - | | | $ | | Level 3 | ||
The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
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| TA Milestone |
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| Put Option |
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| Payment |
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Balances at Issuance Date |
| $ |
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| $ |
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Change in fair value |
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| ( | ) |
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Derecognition of Put Option |
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| ( | ) |
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| - |
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Reclassification to accrued expenses |
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| - |
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| ( | ) |
Balances at August 31, 2026 |
| $ |
|
| $ |
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NOTE 9 – GoUSA TV Asset Purchase
On February 2, 2026, NextTrip, Inc. entered into an Asset Purchase Agreement with The Corporation for Travel Promotion, doing business as “Brand USA” (“Seller”), pursuant to which the Company agreed to purchase select content, brand rights, and distribution assets (collectively, the “Assets”) of GoUSA TV, a travel streaming platform originally launched to showcase destinations across the United States. GoUSA TV historically reached an estimated 200+ million viewers globally across connected TV, mobile applications, and digital platforms, including Samsung TV Plus, LG Channels, Titan OS, and TCL International.
The aggregate consideration under the Purchase Agreement is $
The GoUSA TV assets are being integrated into JOURNY TV within the Media segment. GoUSA TV content serves as a U.S.-focused demand-generation layer within NextTrip’s broader media-to-commerce ecosystem
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NOTE 10 – Intangible Assets
Intangible assets as of August 31, 2026, and February 28, 2026 consisted of the following:
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| August 31, 2026 |
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| February 28, 2026 |
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Software Development |
| $ |
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Software Licenses |
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Trademark |
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FSA Travel, LLC Tradename |
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FSA Software Agreements |
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TA Pipeline, LLC Tradename |
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TA Pipeline, LLC Supplier and Agency Agreements |
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JOURNY TV – Trade Name |
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JOURNY TV Distribution Agreements |
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JOURNY TV Production Costs |
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GoUSA Content Episodes |
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GoUSA Content IMAX |
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GoUSA Distribution Agreements |
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GoUSA Assembled Workforce |
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Total |
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Accumulated amortization |
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| ( | ) |
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| ( | ) |
Intangible assets, net of amortization |
| $ |
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| $ |
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Amortization expense for the six months ended August 31, 2026 and 2025 was $
During the six months ended August 31, 2026 and 2025, the Company did not record any impairment losses associated with the carrying value exceeding its recoverable amount.
The estimated aggregate amortization expense for each of the succeeding fiscal years ending in February is as follows:
2027 (Remaining) |
| $ |
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2028 |
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2029 |
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2030 |
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2031 |
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Thereafter |
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| $ |
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The schedule excludes capitalized software development costs of $
NOTE 11 – Goodwill
Reverse Acquisition of Sigma Additive Solutions, Inc.
As discussed in Note 1 – Business Description and Going Concern, the legal acquisition of NTH by the Company on December 29, 2023 was determined to be a reverse acquisition, with NTH as the accounting acquirer, using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method of accounting, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of consummation of the transaction.
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Pursuant to ASC 350-20, the Company assigned its goodwill to reporting units and is required to test each reporting unit’s goodwill for impairment at least on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The goodwill resulting from the reverse acquisition is primarily attributable to NTH’s objective to obtain access to public markets to provide funding wherewithal to fund business growth. NTH’s benefit in paying for these synergies in the reverse acquisition transaction was to avoid the time and expense of organizing and executing an Initial Public Offering transaction. In the reverse acquisition, $
Acquisition of FSA Travel, LLC
As of August 31, 2026, goodwill of $
Acquisition of TA Pipeline LLC
As of August 31, 2026, goodwill of $
NOTE 12 – Notes Payable
On October 17, 2025, the Company sold two short-term promissory notes, each for a principal balance of $
On March 24, 2026, the Company sold a short-term promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of $
On May 26, 2026, the Company entered into an agreement to sell a short-term promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of $
On June 9, 2026, the Company sold a non-interest bearing short-term promissory note to a private investor for $
On July 1, 2026, the Company entered into a short-term loan agreement with ODK Capital, LLC (“OnDeck”) for a principal amount of $
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NOTE 13 – Long-Term Debt
As part of the acquisition of FSA on April 9, 2025, the Company assumed an SBA loan originally issued to FSA on December 4, 2020, with an initial principal amount of $
In accordance with ASC 805 – Business Combinations, the assumed loan was recognized at its acquisition-date fair value of $
The loan is measured at amortized cost subsequent to the acquisition date, and interest expense is recognized using the effective interest method based on the fair value of the liability at the acquisition date. The following table summarizes the loan terms as of the acquisition date:
Description |
| Amount |
| |
Principal amount |
| $ |
| |
Fair value at acquisition date |
| $ |
| |
Remaining term (months) |
|
|
| |
Monthly payment |
| $ |
| |
Effective interest rate |
|
| % | |
As of August 31, 2026, the balance of the loan was $
NOTE 14 – Convertible Note Payable and Warrant Liability
The Financing
On July 21, 2026, the Company entered into a Securities Purchase Agreement with Lind Global Fund III LP (the “Investor”) and issued to the Investor a Senior Secured Convertible Promissory Note in the principal amount of $
The funding amount was reduced at closing by a commitment fee of $
Terms of the Note
The Note does not bear interest other than upon an event of default. Principal is repayable in fourteen consecutive monthly installments of $
Each monthly installment may be settled, at the Company’s option, in cash in an amount equal to
Between payment dates, the Investor may increase the amount of up to two monthly installments to as much as $
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The Note is convertible at the Investor’s option, in whole or in part, into common stock at a conversion price of $
The Note is secured by substantially all of the assets of the Company and its subsidiaries and is guaranteed by the Company’s subsidiaries. Events of default include, among others, failure to pay amounts when due, failure to deliver shares when required, a change of control, the common stock ceasing to be listed on a trading market, and the Company’s market capitalization remaining below $
The Company may not issue shares under the Note and the Warrant in excess of
Terms of the Warrant
The Warrant entitles the Investor to purchase
Classification and Allocation
The Note and the Warrant were issued together for a single funding amount. The Warrant is a freestanding instrument and does not meet the conditions for equity classification in ASC 815-40 because the fundamental transaction provision may require the Company to settle the Warrant in cash in circumstances outside its control. The Warrant also meets the definition of a derivative in ASC 815-10 and does not qualify for the scope exception for contracts indexed to, and classified in, an entity’s own equity. The Warrant is therefore recognized as a liability, measured at fair value at issuance and at each reporting date, with changes in fair value recognized in earnings.
The proceeds were allocated first to the Warrant at its issuance-date fair value of $
The Company evaluated the redemption and conversion features embedded in the Note and determined that certain features would otherwise require bifurcation. Because the events that would trigger those features are not considered probable and the features had no significant value at issuance or at August 31, 2026, no amounts have been allocated to them. The Company will reassess this conclusion at each reporting date.
Carrying Amount of the Note
The carrying amount of the Note is as follows:
| | August 31, 2026 | | |
Principal Amount | | $ | | |
Unamortized OID, warrant allocation and issuance costs | | $ | ( | ) |
Carrying amount | | $ | | |
Less: current portion | | $ | ( | ) |
Non-current portion | | $ | | |
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Installments contractually due within twelve months of the balance sheet date are classified as current and the remainder as non-current, with the unamortized discount allocated between the two on a pro rata basis. Ten installments are due on or before August 31, 2027 and four are due thereafter. Classification is based on the scheduled installment amounts; the Investor’s right to increase up to two installments, described above, has not been reflected in the classification because it had not been exercised at August 31, 2026 and its exercise is not considered probable. Exercise of that right in full would increase the current portion by $
The discount is accreted to interest expense over the term of the Note using the effective interest method. Accretion of $
Future principal payments on the Note are as follows:
Fiscal year ending |
| Amount |
| |
February 28, 2027 |
| $ |
| |
February 29, 2028 |
| $ |
| |
Total Principal |
| $ |
| |
Warrant Liability
The Warrant liability is measured at fair value on a recurring basis using the Black Scholes pricing model and is classified within Level 3 of the fair value hierarchy because the expected volatility used in the measurement is a significant unobservable input. The following inputs were used:
| | August 31, 2026 | | | July 21, 2026 | | ||
Stock price | | $ | | | $ | | ||
Exercise price | | $ | | | $ | | ||
Dividend yield | | | - | | | | - | |
Risk-free interest rate | | | % | | | % | ||
Expected volatility | | | % | | | % | ||
Expected life (in years) | | | | | | | ||
Changes in the Warrant liability were as follows:
|
| Amount |
| |
Balance at February 28, 2026 |
| $ |
| |
Issuance of Warrant July 21, 2026 |
| $ |
| |
Change in Fair Value |
| $ | ( | ) |
Balance at August 31, 2026 |
| $ |
| |
The $
NOTE 15 - Related Party Transactions
Monaco Investment Partners II Line of Credit and Exchange for Series B Preferred Stock
On May 6, 2025, the Company entered into a Line of Credit Agreement (the “MIP Line of Credit”) with Monaco Investment Partners II, LP (“MIP”) providing the Company with a $
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On August 25, 2026, the Company and MIP entered into an Exchange Agreement (the “MIP Exchange Agreement”) pursuant to which (i) the MIP Line of Credit was increased by $
The Series B Preferred Stock has a stated value of $
The MIP Exchange Agreement was reviewed and approved by the disinterested members of the Company’s Board of Directors and by the Audit Committee in accordance with the Company’s Related Party Transactions Policy. Because MIP is a related party, the extinguishment of the MIP Line of Credit was accounted for as a capital transaction in accordance with ASC 470-50-40-2, and
As of August 31, 2026,
Donald P. Monaco Insurance Trust Short-Term Promissory Note
On March 25, 2026, the Company sold a short-term unsecured promissory note (the “Note”) to the Donald P. Monaco Insurance Trust in the principal amount of $
On July 21, 2026, the Company repaid the Note in full, consisting of principal of $
Compensation Deferral
The Company’s Chief Executive Officer, William Kerby, at his election, agreed to defer $
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Equity Investments
On April 15, 2026, Andy Kaplan, a director of the Company, through KC Global Media Asia LLC (“KCGM”), purchased
On May 8, 2026, Mr. Kaplan, through KCGM, purchased
On June 18, 2026, David Jiang, a director, purchased
NextTrip Privilege, Inc. Licensing and Services Agreement
On December 12, 2025, the Company entered into a Licensing and Servicing Agreement with NextTrip Privilege, Inc. (“Privilege”), pursuant to which the Company has agreed to provide to Privilege: (a) personnel to support their operations; (b) a license to use the name “NextTrip” as their corporate and business name; (c) a license to use our software in connection with their private-label internet website; and (d) continuing advances to fund their operations until they raise sufficient capital.
In consideration for the foregoing, Privilege has agreed to pay the Company:
| ● | a |
|
|
|
| ● | the cost of the annual membership fee for each year of Privilege membership provided to investors; |
|
|
|
| ● | reimbursement of all incremental expenses paid by the Company on behalf of Privilege, related to an investor’s membership; |
|
|
|
| ● | any revenue received by Privilege from investor bookings on our platform; |
|
|
|
| ● | repayment of all advances previously made or made in the future, with advances being interest-free until February 28, 2026 and thereafter accruing interest at the rate of |
|
|
|
| ● | beginning March 1, 2026, an Administrative Services Fee of $ |
On April 15, 2026, the Company and NextTrip Privilege, Inc. entered into Amendment No. 1 to the Licensing and Services Agreement, which deferred the commencement date of the $
As of August 31, 2026, the Company had advanced a total of $
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Stock Option Agreement
On December 2, 2025, NextTrip Group, LLC (“NextTrip Group”), the holder of
The Option had not been exercised as of August 31, 2026. The underlying Class B common stock has no readily determinable fair value, Privilege has minimal operations, and the Company does not consider exercise of the Option to be probable. Accordingly, no amount has been recognized on the Company’s balance sheet in respect of the Option. See Note 17 - Commitments and Contingencies for additional information regarding the Option as a contingent purchase commitment.
Common Officers and Directors
Three of the Company’s executive officers and directors concurrently serve as executive officers and directors of Privilege: Donald P. Monaco serves as President, Chairman and a director of Privilege; William Kerby serves as Vice President and a director of Privilege; and Frank Orzechowski serves as Chief Financial Officer and a director of Privilege.
Strategic Partnership with KCGM
Effective July 17, 2025, the Company entered into a strategic partnership with KCGM to expand the distribution of JOURNY-branded television and digital content in international markets. Since entering into the partnership, JOURNY TV has launched on JioTV and JioTV+ in India, Openview Stream in Africa, and TCL platforms across territories in the Asia-Pacific and Middle East regions. The Company also has additional launches confirmed or in progress with platforms in Australia, India and other international markets.
Under the terms of the partnership agreement, NextTrip granted to KCGM the right to use the JOURNY TV name, brand, logo, and other related intellectual property rights as well as the right and license to use the JOURNY TV content for a five year period. In return for these rights, KCGM agreed to pay to NextTrip 50% of all amounts actually received by KCGM which are directly derived from the programming service. As of August 31, 2026,
NOTE 16 - Deferred Revenue
Deferred revenue represents contract liabilities under ASC 606, Revenue from Contracts with Customers, arising from consideration received (or unconditionally due) from customers in advance of the Company’s satisfaction of the related performance obligations. The Company recognizes the associated revenue when (or as) those performance obligations are satisfied.
Deferred revenue consists principally of advance customer payments associated with Merchant of Record (MOR) bookings, group commission revenue, and campaign revenue. FSA commission revenue and programmatic revenue are not included in deferred revenue; FSA commission is recorded within accounts receivable, and programmatic revenue is recorded within accounts receivable or recognized when received.
The Company expects substantially all remaining performance obligations as of August 31, 2026 to be satisfied, and the related deferred revenue to be recognized as revenue, within the next twelve months.
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The following table presents the changes in the Company’s deferred revenue balance for the six months ended August 31, 2026 and August 31, 2025:
|
| Six Months Ended August 31, 2026 |
|
| Six Months Ended August 31, 2025 |
| ||
Deferred revenue, beginning of year |
| $ |
|
| $ |
| ||
Additions - consideration received from customers |
|
|
|
|
|
| ||
Revenue recognized during the period |
|
| ( | ) |
|
| ( | ) |
Deferred revenue, ending balance |
| $ |
|
| $ |
| ||
Revenue recognized during each period that was included in the deferred revenue balance at the beginning of the respective period was as follows:
|
| Six Months Ended August 31, 2026 |
|
| Six Months Ended August 31, 2025 |
| ||
Revenue recognized that was included in the deferred revenue balance at the beginning of the year |
| $ |
|
| $ |
| ||
The opening balance of deferred revenue as of March 1, 2025 (i.e., the beginning of the earliest comparative period presented) was $
NOTE 17 - Commitments and Contingencies
Litigation and Claims
The Company is involved, from time to time, in litigation, other legal claims and proceedings involving matters associated with or incidental to its business, including breach of contract claims, intellectual property, employment and vendor matters. Except as described below under "TA Pipeline Arbitration," the Company believes that the resolution of currently pending matters would not, individually or in the aggregate, have a material adverse effect on its financial condition or results of operations. However, the Company's assessment of these matters could change as a result of facts not presently known to the Company or determinations by judges, juries, arbitrators or other finders of fact that are not in accord with management's evaluation of the possible liability or outcome.
TA Pipeline Arbitration
In connection with the acquisition of TA Pipeline LLC on August 6, 2025, the Company agreed under the TA MIPA to (i) repurchase the TA Closing Shares at the Base Price of $
On February 24, 2026, the former TA Members delivered notice purporting to exercise the repurchase right under the Put Option with respect to all
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On July 14, 2026, the former TA Members commenced a binding arbitration proceeding against the Company. They are seeking the $
During the three months ended August 31, 2026, based on additional information that became available regarding the dispute with the former TA Members, including the filing of the Demand for Arbitration on July 14, 2026 and the completion of the Milestone Period on August 6, 2026, management reassessed the accounting for the TA Closing Shares and the Milestone Payment. As a result of this reassessment, the Company reclassified the TA Closing Shares from mezzanine equity to a liability of $
The Company's counterclaims represent a gain contingency. They have not been recognized and have not been offset against the liabilities described above. There can be no assurance that the Company will recover any amounts on its counterclaims.
The Exercise Period for the Put Option applicable to the TA Milestone Shares expires on November 6, 2026. If the former TA Members exercise the Put Option with respect to the TA Milestone Shares, the Company would be required to settle the share-settled portion of the TA Milestone Payment in cash, in the amount of approximately $
Option to Purchase NextTrip Privilege, Inc. Class B Common Stock
On December 2, 2025, the Company was granted an option by NextTrip Group, LLC to acquire up to
JOURNY TV Licensing and Royalty Payment Obligation
In connection with the JOURNY TV Asset Acquisition (see Note 7), the Company is obligated to make license fee payments to Ovation LLC totaling $
GoUSA TV Minimum Royalty Payment Obligation
In connection with the GoUSA TV Asset Purchase (see Note 9), the Company agreed, for the three-year period beginning on the closing date of February 2, 2026, to pay Brand USA a royalty equal to
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Lind Global Fund III LP Registration Rights
Under the Securities Purchase Agreement entered into with Lind Global Fund III LP on July 21, 2026, the Company was required to file a registration statement covering the resale of the shares issuable under the note and warrant described in Note 14 and to have that registration statement declared effective within ninety days of closing. The registration statement was declared effective on August 27, 2026, and no payments were incurred in respect of a failure to file or a failure to obtain effectiveness.
The Company remains subject to payment obligations if the registration statement ceases to be available for sales of the covered shares for more than five trading days, or if the Company fails to remain current in its Exchange Act reporting such that the investor is unable to sell under Rule 144. Upon either failure, the Company is required to pay the investor an amount in cash equal to
Now that the resale registration statement is effective, the Company’s ability to settle monthly installments in shares of common stock is limited principally by the
NOTE 18 - Stockholders’ Equity
Mezzanine Equity
TA Pipeline LLC Acquisition
In connection with the acquisition of TA Pipeline LLC on August 6, 2025, the Company issued
During the three months ended August 31, 2026, based on additional information that became available regarding the dispute with the former TA Members, including the filing of the Demand for Arbitration on July 14, 2026 and the completion of the Milestone Period on August 6, 2026, management reassessed the classification of the TA Closing Shares. Management concluded that, notwithstanding the Company’s position regarding the validity of the purported exercise of the Put Right, the TA Closing Shares should be accounted for as mandatorily redeemable and classified as a liability in accordance with ASC 480-10-25-7, measured as provided in ASC 480-10-30-2. Accordingly, the Company reclassified the TA Closing Shares out of mezzanine equity and recorded a liability of approximately $
The TA Closing Shares remain legally outstanding pending repurchase but, from the date of reclassification, are excluded from the shares of common stock reported as issued and outstanding within permanent stockholders’ equity and from the computation of basic and diluted loss per share. Recognition of the liability reflects the Company’s contractual obligation under the TA MIPA and does not represent an assessment by management of the likely outcome of the arbitration, including the Company’s affirmative defenses and counterclaims.
For further information regarding the TA Closing Shares, the Put Option and the TA Milestone Payment, refer to Notes 8, 17 and 20.
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Predecessor Series B Convertible Preferred Stock — Helena Global Investment Opportunities 1 Ltd. (Withdrawn)
On May 6, 2026, the Company entered into a Securities Purchase Agreement with Helena Global Investment Opportunities 1 Ltd. (“Helena”) pursuant to which the Company issued
The Predecessor Series B Preferred was classified as mezzanine equity in accordance with ASC 480-10-S99-3A because of the mandatory redemption date, together with the holder’s right to elect a one-time extension of that date, placed the form and timing of settlement outside the Company’s sole control. The carrying amount was accreted to the redemption amount from the issuance date to the mandatory redemption date using the effective interest method.
At May 31, 2026,
On July 21, 2026, the Company redeemed all
In connection with the redemption, the Guarantee and Pledge Agreement under which
On August 27, 2026,
Common Stock
The Company has
During the first quarter of 2026, the Company issued
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During the second quarter of 2026, the Company issued
During the first quarter of 2025, the Company issued
In the second quarter of 2025, the Company issued
At-the-Market Offering
On August 31, 2026, the Company entered into an At the Market Offering Agreement (the "Offering Agreement") with Titan Partners Securities LLC ("Titan"), as sales agent, under which the Company may offer and sell, from time to time, shares of its common stock having an aggregate offering price of up to $
Titan is entitled to a commission of
Preferred Stock
Under our Charter, our board of directors has the authority, without further action by stockholders, to designate one or more series of preferred stock and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights granted to or imposed upon the preferred stock, including dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation preference and sinking fund terms, any or all of which may be preferential to or greater than the rights of the common stock.
Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control and may adversely affect the market price of the common stock and the voting and other rights of the holders of common stock.
The Company is authorized to issue
An aggregate of
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Series A Convertible Preferred Stock
On February 6, 2026, the Company filed a Certificate of Designation of Series A Convertible Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of the State of Nevada, designating
The terms and conditions set forth in the Series A Certificate of Designation are summarized below:
Ranking. The Series A Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series A Preferred will be entitled to dividends, on an as-converted basis, equal to dividends actually paid, if any, on shares of Company common stock.
Voting. Except as provided by the Company’s Charter or as otherwise required by the Nevada Revised Statutes, holders of Series A Preferred are entitled to vote with the holders of outstanding shares of Company common stock, voting together as a single class, with respect to all matters presented to the Company’s stockholders for their action or consideration. In any such vote, each holder is entitled to a number of votes equal to the number of shares of common stock into which the Series A Preferred held by such holder is convertible. The Company may not, without the consent of holders of a majority of the outstanding shares of Series A Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series A Preferred or alter or amend the Series A Certificate of Designation, (ii) amend its Charter or other charter documents in any manner that adversely affects any rights of the holders of the Series A Preferred, or (iii) enter into any agreement with respect to the foregoing.
Conversion. Effective as of 5:00 pm Eastern time on the third business day after the date that the Company’s stockholders approve the conversion of Series A Preferred into shares of Common Stock in accordance with the listing rules of Nasdaq, each outstanding share of Series A Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series A Conversion Ratio”), subject to beneficial ownership limitations.
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series A Preferred will be entitled to participate, on an as-converted-to-common stock basis calculated based on the Series A Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
At August 31, 2026,
Series B Convertible Preferred Stock — Monaco Investment Partners II, LP (Related Party)
The Series B Convertible Preferred Stock described below (the “Series B Preferred”) is a separate series of preferred stock newly designated on August 27, 2026 and is distinct in all respects from the Predecessor Series B Preferred described above. The two series share only the “Series B” designation; they differ in stated value, conversion price, dividend terms, redemption rights and balance sheet classification.
Effective August 25, 2026, the Company and Monaco Investment Partners II, LP (“MIP”) entered into an Exchange Agreement pursuant to which the Company (i) increased the MIP Line of Credit by $
On August 27, 2026, the Company filed a Certificate of Designation of Series B Convertible Preferred Stock with the Secretary of State of the State of Nevada, designating
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The terms and conditions set forth in the Certificate of Designation are summarized below:
Stated Value. $
Ranking. The Series B Preferred ranks pari passu with the Company’s other outstanding series of preferred stock and senior to the common stock and any other series of capital stock ranking junior to the Series B Preferred.
Dividends. Dividends accrue at
Voting. Except as otherwise required by the Nevada Revised Statutes, the Series B Preferred has no voting rights. However, without the affirmative vote of the holders of a majority of the then outstanding Series B Preferred, the Company may not (i) alter or change adversely the powers, preferences or rights given to the Series B Preferred or amend the Certificate of Designation in any manner that adversely affects the rights of holders, (ii) issue further shares of Series B Preferred or increase or decrease the number of authorized shares of Series B Preferred, or (iii) enter into any agreement with respect to the foregoing.
Conversion. At the option of the holder, each outstanding share of Series B Preferred may be converted into that number of shares of common stock equal to the quotient obtained by dividing (i) the stated value of such share plus all accrued and unpaid dividends thereon by (ii) an initial conversion price of $
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of Series B Preferred are entitled to receive, in preference to the holders of common stock and any class of capital stock junior to the Series B Preferred, an amount per share equal to the stated value plus all accrued and unpaid dividends.
Redemption. The Company has the right, at its option, to redeem all or any portion of the Series B Preferred at a price per share equal to the stated value plus all accrued and unpaid dividends. The Series B Preferred is not redeemable at the option of the holder and has no mandatory redemption date.
Classification
The Series B Preferred is not mandatorily redeemable, is not redeemable at the option of the holder, and is not redeemable upon the occurrence of an event that is not solely within the Company’s control. Accordingly, the Series B Preferred is outside the scope of ASC 480-10-25-4 and ASC 480-10-S99-3A and is classified within permanent stockholders’ equity. This classification differs from that of the Predecessor Series B Preferred, which was presented as mezzanine equity solely as a result of the mandatory redemption feature of that instrument. The Company evaluated the embedded conversion feature under ASC 815-15 and ASC 815-40 and concluded that the feature is indexed to the Company’s own stock and would be classified in stockholders’ equity if freestanding; accordingly, bifurcation was not required.
Accounting for the Exchange
Because MIP is a related party and participated in the exchange in its capacity as a holder of the Company’s securities, the Company accounted for the exchange of the MIP Line of Credit for Series B Preferred as a capital transaction rather than as an extinguishment giving rise to a gain or loss, consistent with ASC 470-50 and SAB Topic 5T. Accordingly, the Series B Preferred was recorded at $
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The $
Shares Outstanding
At August 31, 2026,
Series E Convertible Preferred Stock
Under the Certificate of Designations of the Series E Preferred Stock, shares of the Company’s Series E Preferred have an initial stated value of $
At August 31, 2026,
Stock Options
On December 28, 2023, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved the adoption of the NextTrip 2023 Equity Incentive Plan (the “2023 Plan”).
The Company’s 2013 Equity Incentive Plan expired on March 15, 2023. As such, there were
On March 26, 2025, under the terms of the 2013 Equity Incentive Plan, all outstanding options terminated upon the change in control effected by the issuance of Contingent Shares pursuant to the Exchange Agreement entered into in connection with the NextTrip Acquisition.
During the six months ended August 31, 2026 and 2025, the Company granted and issued stock options to purchase an aggregate of
The Company generally grants stock options to employees, consultants, and directors at exercise prices equal to the fair market value of the Company’s common stock on the grant date, but not less than
Total stock-based compensation expense included in the statements of operations for the three months ended August 31, 2026 and 2025 was $
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The fair value of stock-based awards was estimated using the Black-Scholes model with the following weighted average assumptions for the six months ended August 31, 2026 and August 31, 2025.
|
| 2026 |
|
| 2025 |
| ||
Dividend yield |
|
| % |
|
| % | ||
Risk-free interest rate |
|
| % |
|
| 3.83% - 4.06% |
| |
Expected volatility |
|
| % |
|
| 122.5% - 139.7% |
| |
Expected life (in years) |
|
|
|
|
|
| ||
Option activity for the six months ended August 31, 2026 and the year ended February 28, 2026 was as follows:
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| |
| Weighted |
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| | |
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| |
| Weighted |
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| Average |
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| | ||
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| |
| Average |
|
| Remaining |
|
| Aggregate |
| |||
|
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| |
| Exercise |
|
| Contractual |
|
| Intrinsic |
| |||
|
| Options |
|
| Price ($) |
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| Life (Yrs.) |
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| Value ($) |
| ||||
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Options outstanding at February 28, 2025 |
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| ||||
Granted |
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| | |||
Exercised |
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| - |
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| - |
| ||
Forfeited or cancelled |
|
| ( | ) |
|
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| - |
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| - |
| |
Options outstanding at February 28, 2026 |
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| ||||
Granted |
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| - |
| |||
Exercised |
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| - |
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| - |
| ||
Forfeited or cancelled |
|
| ( | ) |
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| - |
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| - |
| |
Options outstanding August 31, 2026 |
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Options expected to vest in the future as of August 31, 2026 |
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| - |
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Options exercisable at August 31, 2026 |
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Options vested, exercisable, and options expected to vest at August 31, 2026 |
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The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the market price of our common stock for those awards that have an exercise price below the market price of our common stock. At August 31, 2026, no options had an exercise price below the $
At August 31, 2026, there was
Stock Appreciation Rights
The purposes of the 2020 Stock Appreciation Rights Plan (the “2020 SAR Plan”) are to: (i) enable the Company to attract and retain the types of employees, consultants, and directors (collectively, “Service Providers”) who will contribute to the Company’s long-range success; (ii) provide incentives that align the interests of Service Providers with those of the stockholders of the Company; and (iii) promote the success of the Company’s business. The 2020 SAR Plan provides for incentive awards that are only in the form of stock appreciation rights payable in cash (“SARs”). No shares of common stock are reserved or will be issued pursuant to the 2020 SAR Plan.
SARs may be granted to any Service Provider. A SAR is the right to receive an amount equal to the Spread with respect to a share of the Company’s common stock (a “Share”) upon the exercise of the SAR. The “Spread” is the difference between the exercise price per share specified in a SAR agreement on the date of grant and the fair market value per share on the date of exercise of the SAR. The exercise price per share will not be less than 100% of the fair market value of a Share on the date of grant of the SAR. The administrator of the 2020 SAR Plan will have the authority to, among other things, prescribe the terms and conditions of each SAR, including, without limitation, the exercise price and vesting provisions, and to specify the provisions of the SAR Agreement relating to such grant.
On March 26, 2025, under the terms of the 2020 SAR Plan, all outstanding unvested SARs became immediately vested and exercisable upon the change in control effected by the issuance of Contingent Shares pursuant to the Exchange Agreement entered into in connection with the NextTrip Acquisition.
The Company did not grant any SARs during the six months ended August 31, 2026 or August 31, 2025.
40
Table of Contents
The Company recognizes compensation expense and a corresponding liability for the fair value of the SARs over the vesting period for each SAR award. The SARs are revalued at each reporting date in accordance with ASC 718 “Compensation-Stock Compensation,” and any changes in fair value are reflected in the Statement of Operations as of the applicable reporting date.
SARs activity for the six months ended August 31, 2026 and the year ended February 28, 2026 was as follows:
|
|
|
| |
|
|
| |
| Weighted |
|
|
|
| | |
|
|
|
| |
| Weighted |
|
| Average |
|
|
|
| | ||
|
|
|
| |
| Average |
|
| Remaining |
|
| Aggregate |
| |||
|
|
|
| |
| Exercise |
|
| Contractual |
|
| Intrinsic |
| |||
|
| SARs |
|
| Price ($) |
|
| Life (Yrs.) |
|
| Value ($) |
| ||||
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
SARs outstanding at February 28, 2025 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Exercised |
|
|
|
|
|
|
|
| - |
|
|
| - |
| ||
Forfeited or cancelled |
|
| ( | ) |
|
|
|
|
| - |
|
|
| - |
| |
SARs outstanding at February 28, 2026 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Granted |
|
|
|
|
|
|
|
| - |
|
|
| - |
| ||
Exercised |
|
|
|
|
|
|
|
| - |
|
|
| - |
| ||
Forfeited or cancelled |
|
| ( | ) |
|
|
|
|
| - |
|
|
| - |
| |
SARs outstanding August 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
SARs expected to vest in the future as of August 31, 2026 |
|
|
|
|
|
|
|
| - |
|
|
|
| |||
SARs exercisable at August 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
SARs vested, exercisable, and SARs expected to vest at August 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the market price of our common stock for those awards that have an exercise price below the market price of our common stock. At August 31, 2026, no SARs had an exercise price below the $
At August 31, 2026, there was
Warrants
The fair value of warrants issued during the six months ended August 31, 2026 and 2025 was estimated using the Black-Scholes model with the following assumptions.
Assumptions:
|
| 2026 |
|
| 2025 |
| ||
Dividend yield |
|
| % |
|
| % | ||
Risk-free interest rate |
|
| 3.54% - 4.24% |
|
|
| 3.9% - 4.1% |
|
Expected volatility |
|
| 104.5% - 119.4% |
|
|
| 156.4% - 160.5% |
|
Expected life (in years) |
|
|
|
|
|
| ||
41
Table of Contents
Warrant activity for the six months ended August 31, 2026 and the year ended February 28, 2026 was as follows:
|
|
|
| |
| Weighted |
|
| Weighted Average |
| ||
|
|
|
| |
| Average |
|
| Remaining |
| ||
|
|
|
| |
| Exercise |
|
| Contractual |
| ||
|
| Warrants |
|
| Price ($) |
|
| Life (Yrs.) |
| |||
Warrants outstanding at February 28, 2025 |
|
|
|
|
|
|
|
|
| |||
Granted |
|
|
|
|
|
|
|
|
| |||
Exercised |
|
| ( | ) |
|
|
|
|
| - |
| |
Forfeited or cancelled |
|
| ( | ) |
|
|
|
|
| - |
| |
Warrants outstanding at February 28, 2026 |
|
|
|
|
|
|
|
|
| |||
Granted |
|
|
|
|
|
|
|
|
| |||
Exercised |
|
| ( | ) |
|
|
|
|
| - |
| |
Forfeited or cancelled |
|
|
|
|
|
|
|
| - |
| ||
Warrants outstanding at August 31, 2026 |
|
|
|
|
|
|
|
|
| |||
Warrants outstanding at August 31, 2026 include the Common Stock Purchase Warrant to purchase
NOTE 19 – Segment Information
ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of a reporting entity, the operating results of which are reviewed regularly by the CODM to make decisions about resource allocation and to assess performance. Our CODM is our Chief Executive Officer.
In response to acquisitions and expanded business activities, during the third quarter of fiscal year 2026, our CODM requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. As a result, we have updated our reporting and beginning in the third quarter of fiscal year 2026, we report our financial performance based on our new segments: “Travel” and “Media”. Our Travel segment provides travelers with a full range of travel services through its NXT2.0 booking engine, which offers extensive inventory and a platform for curating personalized experiences and efficient trip planning and booking. In addition, Five Star Alliance provides luxury and cruise offerings, and TA Pipeline provides a group-travel agency platform for conferences, conventions, weddings, and affinity groups. Our Media segment consists of JOURNY TV, (including GoUSA TV) a Connected TV Channel broadcast as Free Ad Supported Streaming TV (“FAST”) and Advertising Video on Demand (“AVOD”) that specializes in travel, adventure, and culture-focused content, and Travel Magazine, an online travel magazine that provides articles, tips, guides and inspiration for travelers. 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. Additional information regarding our operating segments can be found in the overview section of Item 2 of this Quarterly Report, entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” Prior periods disclosed below have been recast to conform to these newly identified segments.
Our primary operating metric is Operating Income (Loss). Operating Income (Loss) for our Travel and Media segments includes direct expenses of the segments as well as allocations of certain expenses, primarily salaries and benefits, third party contractors, sales and marketing, and technology We base the allocations primarily on transaction volumes and other usage metrics. We do not allocate shared corporate expenses such as accounting, human resources, certain information technology and legal to our reportable segments. We include these expenses in Corporate. Our allocation methodology will be periodically evaluated and may change as the segments evolve.
Our CODM currently uses Operating Income (Loss) to assess performance in the monthly financial review process. Because our segments have been newly formed, the financial reporting framework continues to be under development and in the future will be used to assess performance and allocate resources for the segments in the annual budget and quarterly forecasting processes. The CODM will consider budget-to-actual variances on a monthly basis using Operating Income (Loss) when making decisions about allocating capital and personnel to the segments. The CODM also anticipates using Operating Income (Loss) to assess the performance and compensation of certain employees.
42
Table of Contents
Corporate includes unallocated corporate functions including finance and administration, technology, and corporate development. In addition, we record amortization of intangible assets and any related impairment, investor relations, stock-based compensation expense, legal and audit, directors’ compensation and other items excluded from segment operating performance in Corporate. Such amounts are detailed in our segment reconciliation below.
The following tables present our segment information for the three and six months ended August 31, 2026 and 2025. As a significant portion of our property and equipment is not allocated to our operating segments and depreciation and amortization is not included in our segment measure, we do not report the assets by segment as it would not be meaningful. We do not regularly provide such information to our chief operating decision maker.
All of our revenues are attributed to customers located in the United States; therefore, no revenues are reported from foreign geographic areas.
|
| Three Months Ended August 31, 2026 |
| |||||||||||||
|
| Media |
|
| Travel |
|
| Corporate |
|
| Total |
| ||||
Revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Cost of revenue (exclusive of depreciation and amortization, shown separately below) |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Gross profit (loss) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Operating Expenses: |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Salaries and benefits |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Stock based compensation |
|
|
|
|
|
|
|
|
|
|
|
| ||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Professional service fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Technology |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Organization costs |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
| - |
|
|
| - |
|
|
|
|
|
|
| ||
Provision for credit losses |
|
| - |
|
|
| - |
|
|
|
|
|
|
| ||
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating Loss |
| $ | ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Other Income (Expense) |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) on extinguishment of liability |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) on derivative liability |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) revaluation of warrant liability |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) on transaction costs allocable to warrant liability |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Interest income (expense), net |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Other income (expense) |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Total Other Income (Expense) |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Net loss before provision for income taxes |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Provision for income taxes |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Net loss before share of net loss in equity method investee |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Share of net loss of equity method investee |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Net loss |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Preferred dividends |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Net Loss Applicable to Common Stockholders |
|
|
| |
|
|
| |
|
|
| |
| $ | ( | ) |
43
Table of Contents
|
| Three Months Ended August 31, 2025 |
| |||||||||||||
|
| Media |
|
| Travel |
|
| Corporate |
|
| Total |
| ||||
Revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Cost of revenue (exclusive of depreciation and amortization, shown separately below) |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Gross profit (loss) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Operating Expenses: |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Salaries and benefits |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Stock based compensation |
|
| |
|
| |
|
| |
|
|
| ||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Professional service fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Technology |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Organization costs |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating Loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Other Income (Expense) |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) on extinguishment of liability |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) on derivative liability |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) revaluation of warrant liability |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) on transaction costs allocable to warrant liability |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Interest income (expense), net |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Other income (expense) |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Total Other Income (Expense) |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Net loss before provision for income taxes |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Provision for income taxes |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Net loss before share of net income (loss) in equity method investee |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Share of net income (loss) of equity method investee |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Net loss |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Preferred dividends |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Net Loss Applicable to Common Stockholders |
|
|
| |
|
|
| |
|
|
| |
| $ | ( | ) |
44
Table of Contents
|
| Six Months Ended August 31, 2026 |
| |||||||||||||
|
| Media |
|
| Travel |
|
| Corporate |
|
| Total |
| ||||
Revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Cost of revenue (exclusive of depreciation and amortization, shown separately below) |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Gross profit (loss) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Operating Expenses: |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Salaries and benefits |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Stock based compensation |
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Professional service fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Technology |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Organization costs |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Provision for credit losses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating Loss |
| $ | ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Other Income (Expense) |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) on extinguishment of liability |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) on derivative liability |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) revaluation of warrant liability |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Gain/(Loss) on transaction costs allocable to warrant liability |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Interest income (expense), net |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Other income (expense) |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Total Other Income (Expense) |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Net loss before provision for income taxes |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Provision for income taxes |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Net loss before share of net income (loss) in equity method investee |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Share of net loss of equity method investee |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Net loss |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Preferred dividends |
|
|
| |
|
|
| |
|
|
| |
|
| ( | ) |
Net Loss Applicable to Common Stockholders |
|
|
| |
|
|
| |
|
|
| |
| $ | ( | ) |
45
Table of Contents
|
| Six Months Ended August 31, 2025 |
| |||||||||||||
|
| Media |
|
| Travel |
|
| Corporate |
|
| Total |
| ||||
Revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Cost of revenue (exclusive of depreciation and amortization, shown separately below) |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Gross profit (loss) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
Operating Expenses: |
|
|
| |
|
|
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Salaries and benefits |
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Stock based compensation |
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General and administrative |
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Sales and marketing |
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Professional service fees |
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Technology |
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Depreciation and amortization |
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Total Operating Expenses |
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Operating Loss |
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Gain/(Loss) on extinguishment of liability |
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Gain/(Loss) on derivative liability |
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Gain/(Loss) revaluation of warrant liability |
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Gain/(Loss) on transaction costs allocable to warrant liability |
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Interest income (expense), net |
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Other income (expense) |
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Total Other Income (Expense) |
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Net loss before provision for income taxes |
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Provision for income taxes |
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Net loss before share of net income (loss) in equity method investee |
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Share of net loss of equity method investee |
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Net loss |
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Preferred dividends |
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There were no intersegment revenues during the three and six months ended August 31, 2026 or August 31, 2025; all revenues presented are from external customers. The significant expense categories presented above for each reportable segment reconcile in full to each segment’s measure of Operating Income (Loss); accordingly, there were no other segment items (as described in ASC 280-10-50-26A) for the three and six months ended August 31, 2026 or August 31, 2025. The “Other expenses” line presented within each segment comprises insurance, bank and payment-processing fees, and other individually immaterial operating costs.
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NOTE 20 - Subsequent Events
The Company’s management has evaluated subsequent events after the balance sheet dated as of August 31, 2026 through October 15, 2026, the date of this report.
Termination of NextTrip Privilege Regulation A Offering
On September 14, 2026, the board of directors of Privilege, a related party (see Note 15 - Related Party Transactions), approved the termination of Privilege’s offering under Regulation A. Total net proceeds raised under the offering were $
The Company’s advances to Privilege of $
Related Party Equity Investment
On September 17, 2026, Andy Kaplan, through KCGM, purchased
Related Party Short-Term Promissory Note
On September 15, 2026, the Company sold a short-term promissory note to its Chief Executive Officer, Bill Kerby in the principal amount of $
Monaco Investment Partners II Line of Credit
On September 25, 2026, MIP advanced the Company $
Fiscal Year 2027 Annual Meeting of Stockholders
On October 9, 2026, the Company held its 2026 Annual Meeting of Stockholders, at which the Company's stockholders approved the following proposals relating to the issuance of shares of the Company's common stock: (i) in accordance with Nasdaq Listing Rule 5635(d), the issuance of shares of common stock in excess of 19.99% of the Company's outstanding shares to Lind Global Fund III LP upon conversion of the Lind Note and exercise of the Lind Warrant (see Note 14); (ii) in accordance with Nasdaq Listing Rule 5635(d), the issuance of shares of common stock (a) to certain non-insiders upon conversion of outstanding shares of Series A Preferred and exercise of related warrants and (b) to an insider, KCGM, an entity affiliated with Andy Kaplan, a director of the Company (see Note 15), upon exercise of a pre-funded warrant issued on December 23, 2025 to purchase
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As a result of the stockholder approval described in clause (i), the
Titan ATM
On September 23, 2026 and October 9, 2026, we sold
TA Pipeline Arbitration
As described in Note 17 – Commitments and Contingencies, on July 14, 2026, the Company received a Demand for Arbitration filed with the American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules by Luis Barberi, Mitch Toren, and Ashish Tembe, the former TA Members (collectively, the “Claimants”). The demand alleges that the Company breached its obligation under Section 7.5(a)(i) of the TA MIPA to repurchase the
On September 3, 2026, subsequent to the end of the period covered by this report, the Claimants filed an Amended Statement of Claim. The Amended Statement of Claim adds a claim that the Company breached Sections 2.2(b) and 2.3(c)(i) of the TA MIPA by failing to pay the Milestone Payment, which the Claimants allege became due no later than August 16, 2026. The Claimants allege that TA generated Net Revenue of $
On September 9, 2026, the Company filed its Answer and Counterclaim. The Company denies liability and asserts affirmative defenses, including prior material breach and excuse, waiver, estoppel, setoff, unclean hands, and failure to mitigate. The Company also asserts counterclaims against the Claimants for (i) breach of the TA MIPA and of the Confidentiality, Non-Competition, and Non-Solicitation Agreements executed by each Claimant in connection with the closing, (ii) breach of the implied covenant of good faith and fair dealing, and (iii) intentional misrepresentation. Among other things, the counterclaims allege that, following the acquisition, one of the Claimants caused an entity he owns and operates, which was a significant customer of TA, to divert business opportunities away from TA, and that the Claimants misrepresented TA’s expected post-acquisition revenue to induce the Company to enter into the TA MIPA. The Company seeks damages of not less than $
The arbitration remains at an early stage, and the Company is unable to predict its outcome. The Company believes it has meritorious defenses and intends to vigorously defend against the claims and pursue its counterclaims.
As of August 31, 2026, the Company has recorded a liability of $
The Company has not accrued pre- or post-judgment interest, attorneys’ fees, or arbitration costs because it does not believe that such amounts are probable at this time. The Company is unable to reasonably estimate any attorneys’ fees or costs that may be awarded, or any amounts that could become payable under Section 7.5 of the TA MIPA with respect to Milestone Shares.
The Company has evaluated the Amended Statement of Claim and the Answer and Counterclaim as subsequent events and determined that no further adjustment to the condensed consolidated financial statements as of August 31, 2026 is required. Any amounts that may be recovered under the counterclaims are gain contingencies and will not be recognized until realized.
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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, 2026 (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, 2026 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 1560 Sawgrass Corporate Parkway, Suite 400, Sunrise Florida 33323, 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.
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.
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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. Such milestones were achieved in full on May 5, 2025, at which point all 5,843,993 Contingent Shares had been issued.
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 amounts of assets, liabilities, revenues and expenses, and the related disclosures, in the accompanying financial statements. Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. 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, including principal versus agent determinations; impairment of goodwill, intangible assets and other long-lived assets; the carrying value of our equity investments; the fair value of the warrant liability; values of stock compensation awards and stock equivalents granted as offering costs; and the allowance for credit losses. Our significant accounting policies, including the assumptions and judgments underlying them, are disclosed in Note 2, “Summary of Significant Accounting Policies,” of the Notes to Financial Statements included in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026.
The critical accounting estimates addressed below reflect our most significant judgments and estimates used in the preparation of our financial statements. Except as described below, there have been no material changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026.
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 transaction price, allocating transaction price to the performance obligation and recognizing revenue when the performance obligation is satisfied.
The Company recognizes revenue from travel packages when the customer has purchased the product and the performance obligation is satisfied, which occurs at the earlier of the date of travel or the date on which the customer’s cancellation period has expired. Revenue for customer travel packages purchased directly from the Company is 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.
For travel packages sold directly by the Company, the Company controls the specified travel product before it is transferred to the customer and is therefore a principal to the transaction, based on, among other factors, the following:
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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).
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For certain travel products, primarily luxury hotel bookings made through Five Star Alliance, the supplier or wholesaler controls pricing and provides the travel service, and the Company’s performance obligation is to arrange for the travel product to be provided by the supplier. In these arrangements, the Company acts as an agent and recognizes revenue on a net basis, equal to the commission or fee it retains, upon the date of travel. Media segment revenue, consisting primarily of advertising and sponsorship revenue from JOURNY TV and Travel Magazine, is recognized as advertisements are delivered and impressions are served and is recorded net of amounts retained by distribution partners
Determining whether the Company is a principal or an agent requires judgment, including an assessment of which party is primarily responsible for fulfilling the promise to provide the travel product, bears inventory risk and has discretion in establishing price. These determinations do not affect gross profit, but a different conclusion for a category of bookings would change the amounts of revenue and cost of revenue that we report. Recognition of travel revenue at the earlier of the date of travel or the expiration of the cancellation period also requires us to track cancellation terms, which vary by supplier and product. Amounts received in advance of that date are recorded as deferred revenue, which was $1,176,675 at August 31, 2026.
Equity Investments
The Company holds 10% interests in each of BlueFysh Holdings Inc. and Playbook Investors Network, which are equity securities in which the Company does not have significant influence or control, and for which fair value is not readily determinable. These investments, which had an aggregate carrying amount of $2,502,000 at August 31, 2026, or approximately 20% of total assets, are measured under the measurement alternative in ASC 321-10-35-2 at cost, less any impairment, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. The carrying amount is evaluated for impairment each reporting period through a qualitative assessment of impairment indicators, including the investee’s financial condition and operating performance, its ability to obtain financing and continue as a going concern, and conditions in its industry. If an impairment indicator exists, the Company estimates the fair value of the investment and, if necessary, an impairment loss is recognized in the statement of operations for the amount by which the carrying amount exceeds fair value. Because the investees are privately held and the financial information available to us is limited, both the identification of impairment indicators and any estimate of fair value involve significant judgment. No impairments or observable price change adjustments have been recognized since these investments were acquired; however, an impairment of either investment could have a material effect on our results of operations and financial position.
On June 10, 2026, the Company acquired 51% of the outstanding common stock of YADA in exchange for 50,000 shares of our common stock valued at $112,000. Notwithstanding its majority voting interest, the Company concluded that substantive participating rights held by YADA’s founding shareholders, including YADA’s retention of control over its day-to-day operations and a five-member board of directors on which the Company holds two seats, overcome the presumption of control, and that YADA is not a variable interest entity of which the Company is the primary beneficiary. Accordingly, the Company accounts for YADA under the equity method rather than consolidating it, and recognizes its share of YADA’s results based on the 50% profit allocation in the related Cooperation and Earnout Agreement rather than its 51% ownership interest. These conclusions involve significant judgment and will be reassessed if the governance provisions lapse or YADA’s circumstances change. Had the Company concluded that it controls YADA, YADA’s assets, liabilities, revenues and expenses would be included in our condensed consolidated financial statements. The carrying amount of the investment was $76,800 at August 31, 2026.
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, carrying value approximates fair value because of their short-term nature. However, the warrant issued to Lind Global Fund III LP in connection with our July 2026 senior secured convertible note financing is measured at fair value on a recurring basis using significant unobservable (Level 3) inputs and involves more judgment.
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The warrant, which entitles the holder to purchase 1,030,928 shares of our common stock at an exercise price of $3.88 per share, is classified as a liability because a fundamental transaction provision may require cash settlement in circumstances outside our control. The warrant is remeasured at each reporting date using the Black-Scholes option pricing model, with changes in fair value recognized in earnings. The most significant assumptions are our stock price and expected volatility, which is a significant unobservable input; other assumptions include the expected term and the risk-free interest rate. The fair value of the warrant decreased from $925,980 at issuance on July 21, 2026 to $629,738 at August 31, 2026, primarily due to a decline in our stock price from $1.84 to $1.43, and we recognized a gain of $296,242 on revaluation of the warrant liability. Future changes in our stock price and volatility assumptions will cause the fair value of the warrant, and our reported results, to fluctuate from period to period, and these non-cash gains and losses may be significant relative to our operating results.
We also evaluated the redemption and conversion features embedded in the convertible note and determined that certain features would otherwise require bifurcation as derivatives. Because the events that would trigger those features are not considered probable and the features had no significant value at issuance or at August 31, 2026, no amounts have been allocated to them. This conclusion requires judgment regarding the probability of events such as an event of default, including a default that would occur if our market capitalization remains below $12.5 million for ten consecutive trading days, and will be reassessed at each reporting date. A change in this assessment could require us to recognize a derivative liability, with subsequent changes in its fair value recognized in earnings.
The Put Option and TA Milestone Payment arising from our acquisition of TA Pipeline LLC, which were previously measured at fair value on a recurring basis using Level 3 inputs, are no longer subject to recurring fair value measurement. During the three months ended August 31, 2026, we derecognized the remaining Put Option derivative liability upon reclassifying the TA Closing Shares as a liability at their $300,000 redemption amount and, following completion of the Milestone Period, recorded the TA Milestone Payment at the $200,000 contractual maximum. These obligations are the subject of a pending arbitration, and the amounts ultimately paid could differ from the amounts recorded. See Notes 8, 17, and 20 to the financial statements.
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 requisite service period, which is generally the vesting period. We also issue shares of common stock and warrants to consultants and other service providers, and warrants in connection with financing transactions, which we measure at fair value.
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. All stock options outstanding at August 31, 2026 were fully vested and exercisable, and stock-based compensation expense for the six months ended August 31, 2026 was not significant; accordingly, changes in these assumptions would primarily affect awards granted in future periods, including any awards issued under the YADA earnout incentive program described in Note 4 to the financial statements
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.
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Software Development Costs
The Company capitalizes the costs of software developed or obtained for internal use in accordance with ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software. Costs incurred during the preliminary project stage are expensed as incurred. Once the preliminary project stage is complete, management has authorized and committed to funding the project, and it is probable that the project will be completed and the software will be used to perform the function intended, qualifying costs incurred during the application development stage are capitalized. Costs incurred during the post-implementation and operation stage, including training and maintenance costs, are expensed as incurred. The determination of which costs qualify for capitalization 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 software is ready for its intended use. Capitalized costs are amortized based on the straight-line method over the estimated useful life of the software.
Impairment of Intangible Assets
In accordance with ASC 360-10-35, Property, Plant, and Equipment—Overall—Subsequent Measurement, and ASC 350-30-35, Intangibles - Goodwill and Other - General Intangibles Other Than Goodwill - Subsequent Measurement, the Company 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; |
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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 the Company 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, the Company records an impairment charge. The Company 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.
Allowance for Credit Losses
We maintain an allowance for expected credit losses on accounts receivable and other receivables, including advances to related parties, based on our assessment of the collectability of each receivable, considering the counterparty’s financial condition, historical collection experience, contractual terms, the existence of collateral, and current and forecasted economic conditions. At August 31, 2026, advances of $469,828 to NextTrip Privilege, Inc., a related party, were fully reserved based on Privilege’s pre-revenue status, the going concern opinion issued by its independent auditor, the de minimis proceeds raised in its Regulation A offering, the contractual subordination of repayment to its operating obligations, and the absence of collateral. We recorded a provision for credit losses of $65,561 and $88,772 for the three and six months ended August 31, 2026, respectively. Estimating expected credit losses requires judgment, and actual collections could differ materially from our estimates.
Segments
Segment reporting requires management to exercise judgment in identifying operating segments, determining how those segments are aggregated into reportable segments, and determining the information reviewed by our CODM for purposes of allocating resources and assessing performance. Our determination of reportable segments is based on multiple factors, including the nature of the products and services offered, the types of customers served, the economic characteristics of each business, and the manner in which financial information is reviewed by our CODM. Our CODM is our Chief Executive Officer.
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In response to acquisitions and expanded business activities, during the third quarter of fiscal year 2026, our CODM requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. This change was driven primarily by acquisitions completed during fiscal year 2026, including FSA and TA Pipeline, which expanded our travel-related operations, and JOURNY TV, which expanded our media operations. As a result of these changes, we updated our internal reporting structure and, beginning in the third quarter of fiscal year 2026, we began reporting our financial performance based on two reportable segments: Travel and Media.
Our primary measure of segment performance is Operating Income (Loss). Operating Income (Loss) for the Travel and Media segments includes direct expenses attributable to each segment, as well as allocations of certain expenses, primarily salaries and benefits, third-party contractors, sales and marketing, and technology costs. These allocations are based primarily on transaction volumes and other usage-based metrics. Shared corporate expenses, including accounting, human resources, certain information technology costs, legal, audit, investor relations, directors’ compensation, stock-based compensation expense, amortization of intangible assets, and corporate development costs, are not allocated to the reportable segments and are included within Corporate.
Because the Travel and Media segments were newly formed during fiscal year 2026, the financial reporting framework supporting segment reporting continues to evolve. While the CODM currently uses Operating Income (Loss) in the monthly financial review process to assess segment performance, he is continuing to review and refine the nature, level of detail, and frequency of the financial information provided in order to determine how it will ultimately be used in decision-making, including resource allocation, budgeting, forecasting, and performance evaluation. As the segments mature, the metrics reviewed by the CODM, the cost allocation methodologies applied, and the presentation of segment information may change to better reflect how the business is managed.
The CODM does not regularly review asset information by segment, and as a result, depreciation and amortization are excluded from the segment performance measure. Accordingly, we do not report segment assets, as such information would not be meaningful.
The change in reportable segments did not result from a change in accounting principle, but rather reflects a change in internal reporting and management approach following fiscal year 2026 acquisitions and expanded business activities. Segment information for prior periods has been recast to conform to the current presentation to provide consistency and comparability across periods. Any future refinements to segment reporting will reflect changes in management’s internal reporting and decision-making processes rather than changes in accounting principles. When applicable, we will disclose such changes and recast prior-period segment information as necessary to maintain comparability.
Business Overview
We are a technology-forward travel and media company operating at the intersection of entertainment, travel inspiration, and commerce. Through a buy-and-build strategy, we have brought together complementary travel businesses, media properties, and technology capabilities. Our objective is to build on the value of these individual businesses by connecting them in an ecosystem that serves consumers and business customers from entertainment and inspiration through planning, booking, and fulfillment.
Our brands continue to serve customers in their respective markets and distribution channels while contributing audiences, content, travel inventory, technology, and service capabilities to the broader NextTrip ecosystem. We believe these contributions can create a positive compounding effect: media inspires travel interest, our travel businesses and advisor relationships help convert that interest into bookings, and shared technology and services support fulfillment and repeat business. Each brand can benefit from the capabilities and relationships of the others, creating additional opportunities for consumers, business customers, sponsors, and advertisers.
We market our travel services through several core brands, including NextTrip Vacations (direct-to-consumer leisure travel), Five Star Alliance (luxury hotel and cruise bookings), and NextTrip Groups (formerly TA Pipeline). Our specialty platforms include PayDlay (a deferred payment booking option), the Groups Platform (for destination weddings, conferences, and conventions), and the Travel Agent Platform. Our Media segment properties, JOURNY content and platforms, the KCGM strategic partnership across Southeast Asia, and Travel Magazine provide destination content designed to attract prospective travelers into our Travel segment booking platforms and generate independent advertising revenue. Through our recent acquisition of a 51% interest in YADA (accounted for under the equity method; see Note 3), we gained access to a creator-commerce platform intended to support audience acquisition, creator engagement, entertainment experiences, and travel transactions across the broader NextTrip ecosystem.
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While we are generating revenue, we remain in the early stages of scaling our integrated travel and media business. Our ability to execute our business plan and achieve anticipated growth depends on expanding supplier relationships, attracting and retaining customers, and securing adequate capital to support marketing and further product development. There can be no assurance that we will achieve these objectives.
Current Scale and Going Concern
We are in the early 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 within one year after the date that these financial statements are issued and the report of our registered independent public accounting firm filed with our Annual Report on Form 10-K for the fiscal year ended February 28, 2026 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.
Our Integrated Content-to-Commerce Platform
Our platform is designed to connect four core elements into a seamless pathway from discovery to confirmed booking:
Content and Inspiration – long and short-form travel video programming, destination storytelling, and editorial content distributed across our Media segment platforms, including JOURNY TV and its digital platforms, the KCGM strategic partnership across Southeast Asia, and Travel Magazine.
Discovery and Planning – destination editorial content, Agentic or artificial intelligence (“AI”)-assisted personalization tools, and search capabilities designed to guide travel decisions and connect audience engagement with booking intent, including through NextTrip Pro, our content to commerce gateway providing marketing assets that convert for transient and group bookings.
Booking and Commerce – direct transaction capabilities through the NXT2.0 platform and affiliated booking platforms within our Travel segment, supporting a broad range of travel categories including leisure, luxury, cruise, group, and business travel.
Service and Support – concierge and call center infrastructure supporting higher-value travel experiences and complex booking needs across our Travel segment.
This integrated approach is intended to create a pathway we describe as “Watch. Scan. Book. Go.” Consumers may enter through entertainment, destination-focused video programming, editorial content, or creator-led experiences, and move through discovery and planning to booking and fulfillment. Business customers and partners may engage through our advisor services, group travel capabilities, event programs, or advertising relationships. By connecting these entry points with shared travel and media capabilities, we seek to create more opportunities to serve each customer and generate revenue across the ecosystem. We believe this approach can strengthen our individual brands while increasing the value they contribute to the Company as a whole.
Business Segments
We operate and report our business in two segments: (1) Travel and (2) Media.
Travel Segment
Our Travel segment encompasses our travel booking and commerce operations. This segment includes our proprietary NXT2.0 booking platform and all booking-oriented brands and products: Five Star Alliance, JOURNYGO NextTrip Vacations, NextTrip Cruise, and NextTrip Pro The Travel segment generates revenue primarily through commissions, markups, and service fees on travel bookings, as well as advisor-driven commissions and attribution-based fees through Travel Magazine Pro™.
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NXT2.0 – Core Booking Platform
At the core of our Travel segment is our proprietary NXT2.0 travel booking engine, which powers several websites, including nexttrip.com and fivestaralliance.com, as well as our Groups Platform and Travel Agent Platform. NXT2.0 supports direct-to-consumer and advisor-assisted booking across leisure, luxury, cruise, group, and business travel verticals. We serve both leisure and business travelers by offering access to travel blogs, videos, and concierge assistance to aid in planning travel, coupled with our booking platform for the direct purchase of flights, hotels, vacation homes, cruises, tours, and other travel products.
Five Star Alliance
Five Star Alliance is a premier luxury travel agency and a wholly owned subsidiary of the Company, acquired in April 2025. Founded in 2004, Five Star Alliance offers a curated collection of over 5,000 five-star and luxury hotels and resorts worldwide, with a 4.9-star Trustpilot rating and over 400,000 monthly site visitors. Five Star Alliance offers personalized recommendations, high-end travel solutions, a proprietary booking engine, and established relationships with premium travel providers, and generates revenue primarily through commission-based bookings. See Recent Developments - Acquisition of Five Star Alliance."
NextTrip Groups (formerly TA Pipeline)
NextTrip Groups is a premier group travel and Meetings, Incentives, Conferences and Exhibitions (“MICE”) platform and a wholly owned subsidiary of the Company, acquired in August 2025. NextTrip Groups has established itself as a leading group-travel agency platform with deep expertise in delivering end-to-end solutions for conferences, conventions, destination weddings, and affinity groups, often servicing groups ranging from 50 to 5,000 travelers. NextTrip Groups has strong relationships with suppliers, planners, and affinity partners, and its integration into the NXT2.0 ecosystem and PayDlay deferred payment program is designed to enhance conversion rates and drive incremental travel bookings. See “Recent Developments - Acquisition of TA Pipeline.”
JOURNYGO
On March 31, 2026, the Company launched JOURNYGO, our next-generation, agentic AI-assisted consumer engagement and booking platform. JOURNYGO is designed to connect our media content with our travel booking capabilities and is reported within our Travel segment because its primary function is to convert viewer engagement into confirmed travel bookings. JOURNYGO integrates travel entertainment (delivered through our Media segment’s JOURNY TV platform), the Promethean interactive overlay technology licensed by the Company, dynamic travel packaging, and agentic AI assistance, supported by live Travel Specialists when needed to frictionlessly help viewers move from inspiration to confirmed travel bookings.
The Promethean platform, licensed on a perpetual basis, enables contextual advertisements and booking calls-to-action to be embedded directly within streaming video content, allowing users to initiate a booking through contextual links and calls-to-action associated with the viewing experience. Using artificial intelligence, JOURNYGO is designed to personalize content recommendations and enable users to create custom travel plans aligned with their interests. See “Recent Developments - Launch of JOURNYGO – Agentic AI-Powered Watch. Scan. Book. Go. Ecosystem."
NextTrip Pro
NextTrip Pro (NextTripPro.com), formerly known as Travel Magazine Pro, is our business-to-business (“B2B”) travel platform within the Travel segment, launched under the NextTrip Pro name in August 2026. The platform expands our original travel-advisor technology initiative into an integrated offering of marketing, client engagement, booking, group travel, and rewards services for travel advisors and agencies. NextTrip Pro is designed to complement an advisor’s existing business, allowing participating professionals to maintain their agency, host, or consortium affiliations, branding, and client relationships while accessing additional tools to attract customers and generate bookings.
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NextTrip Pro brings together three complementary services through a single sign-on. NextTrip Connect provides digital marketing, client engagement, and booking capabilities, enabling advisors to distribute branded destination content and travel offers through websites, social media, email, and direct client communications. It incorporates AI-powered engagement, NextTrip travel inventory, and licensed integrations with Worldia technology to support dynamic packaging of flights, hotels, and experiences into customizable itineraries. Attribution capabilities are designed to connect advisor-generated engagement with resulting bookings, allowing advisors to participate in transactions attributable to their customer relationships and marketing activities.
NextTrip Groups, the rebranded and expanded successor to TA Pipeline, provides specialized technology and fulfillment capabilities for planning and managing destination weddings, meetings, celebrations, entertainment events, and other organized travel. This service enables advisors to pursue group opportunities alongside individual bookings using the broader NextTrip platform. NextTrip Ownership Rewards complements these services with an incentive program designed to recognize participation and reward business growth across NextTrip Pro. Together, these services are intended to support customer acquisition, booking conversion, and ongoing advisor engagement within one coordinated program.
For NextTrip, the platform represents an additional distribution channel for the travel inventory, technology, content, and service capabilities assembled through our buy-and-build strategy. Participating advisors and agencies can extend the reach of these capabilities through their own brands and customer relationships, while drawing on resources across the NextTrip ecosystem. Our media properties can inspire travel interest, NextTrip Connect can help advisors convert that interest into individual bookings, and NextTrip Groups can support larger organized travel opportunities, with our travel infrastructure supporting booking and fulfillment.
The core NextTrip Pro platform is offered without subscription fees to qualified travel professionals. Our revenue opportunity is primarily transaction-based, arising from travel bookings generated through the platform, with participating advisors earning commissions under the applicable program terms. We believe this structure can lower barriers to adoption, increase utilization of our travel capabilities, and create opportunities for repeat booking revenue as the advisor network develops. NextTrip Pro is distinct from TravelMagazine.com, our consumer-facing editorial property within the Media segment, while providing another connection between our media content and travel commerce operations. See “Recent Developments—Launch of NextTrip Pro.”
Media Segment
Our Media segment encompasses original content creation, audience development, media distribution, and advertising monetization operations. This segment includes JOURNY TV (incorporating acquired GoUSA TV content and distribution) and Travel Magazine, our editorial travel content platform. The Media segment generates revenue primarily through advertising, sponsorships, branded content, and destination marketing programs. In addition to direct monetization, the Media segment is intended to generate demand for the Travel segment by directing interested viewers and readers to our booking services, potentially reducing reliance on third-party marketing channels.
JOURNY TV (Including GoUSA TV Integration)
JOURNY TV is our owned global travel media network, providing premium travel entertainment across free ad-supported streaming television (“FAST”), over-the-top (“OTT”), connected TV, and digital platforms. JOURNY TV had an estimated audience of approximately 17 million travel enthusiasts at the time of acquisition by NextTrip, and operates through key platform partnerships, including Samsung TV Plus and Plex.
In February 2026, we acquired original content IP and distribution assets of GoUSA TV from Brand USA (The Corporation for Travel Promotion). GoUSA TV is a travel streaming channel, reaching an estimated 200+ million viewers globally across connected TV, mobile, and digital platforms, including Samsung TV Plus, LG Channels, Plex, Titan OS, and TCL International. Rather than operating GoUSA TV as a standalone channel, we are integrating its U.S.-focused travel content library and distribution infrastructure into JOURNY TV to enhance scale, content depth, and advertiser relevance. Combined, JOURNY TV and GoUSA TV assets are expected to support media distribution reaching approximately 250 million viewers globally in 2026 across FAST, OTT, connected TV, mobile, and digital platforms. See “Recent Developments—GoUSA TV Asset Purchase.”
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In July 2025, we entered into a strategic partnership with KCGM to accelerate the international expansion of JOURNY TV into India, Southeast Asia, Africa and Australia/New Zealand, targeting new regional distribution partnerships and advertising opportunities. See “Recent Developments—JOURNY TV Content Integration and Global Distribution Expansion.
Travel Magazine
Travel Magazine (TravelMagazine.com) is our editorial travel content platform within our Media segment. It is an online travel publication that provides articles, guides, destination inspiration, hotel and restaurant recommendations, and general travel advice. Its audience includes both casual vacationers and more seasoned travelers seeking ideas and information for their next trip. Travel Magazine functions primarily as a content and audience platform within our Media segment, generating revenue through advertising and sponsored content, while also directing engaged readers to our owned booking channels, including NextTrip and Five Star Alliance, as well as to select third-party partners through affiliate relationships.
The media team benefits from a range of strategic partners supporting channel operations, distribution, advertising monetization, and technology infrastructure. These include acTVe, which manages channel operations and supports the expansion of distribution across FAST and connected TV platforms; Ionic, which manages advertising operations and programmatic monetization; Frequency, which provides playout and streaming technology supporting the Company’s FAST channels; and BlueFysh Holdings, which provides digital out-of-home media solutions across North America.
NXT2.0 – Our Integrated Travel Booking Platform
Development of the Platform
Prior to the COVID-19 pandemic, NextTrip (then known as Monaker Group) operated a travel business focused on the sale of vacation rentals and alternative lodging rentals (“ALRs”) through its proprietary booking engine (NXT1.0). In June 2022, NextTrip acquired the Bookit.com booking engine, including its customer database, destination content, source code, and approximately 250 third-party travel supplier Application Programming Interface (“API”) relationships. The Bookit.com platform had previously powered a well-established online leisure travel agent generating over $400 million in annual sales as recently as 2019 (pre-pandemic). We launched the NXT2.0 platform in May 2023 and have since scaled to over four million hotel properties, vacation rental homes, and cruise products globally. The historical sales of the Bookit.com business do not represent revenue generated by NextTrip or current transaction volume on NXT2.0.
Travel Products and Services
Inventory and product offerings on our platform consist chiefly of: (1) direct contracts, which are negotiated directly with the travel provider and generally generate higher gross margins; and (2) third-party API content, which is lower margin but significantly broadens inventory and supports the integration of specialty products, leading to cross-selling and additional revenue opportunities.
Our Direct Contract Strategy
Our initial focus was to negotiate direct connectivity and fixed base pricing contracts with hotels and travel suppliers and to integrate those products into NXT2.0. This allows us to set our own pricing and control our margins for leisure and vacation travel products and negotiate and run co-op marketing. This flexibility affords us the opportunity to run competitive specials and adjust pricing within our marketplace.
Our Inventory Expansion and API Strategy
To supplement our higher-margin direct inventory and support our specialty platforms, we have integrated a series of third-party API relationships into NXT2.0. Major suppliers include Expedia (worldwide hotel product), Nuitée (hotel and vacation rental homes), Global Distribution Systems (luxury hotels and activities), and Signature Travel Network via Five Star Alliance (all major cruise lines). These established suppliers provide significant additional content and product depth in our booking engine, giving NextTrip comprehensive global leisure travel inventory coverage.
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Core Product Offerings
NextTrip’s Travel segment offerings span leisure, luxury, cruise, group, and business travel. Key product offerings include:
NextTrip Vacations – Our core leisure platform, powered by NXT2.0, delivering seamless booking and customizable travel options across airlines, hotels, cruises, ground activities, and more.
Five Star Alliance – A luxury travel platform providing access to over 5,000 five-star hotels and resorts worldwide with personalized concierge services and a 4.9-star Trustpilot rating.
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 including transfers, pre- and post-cruise stays, and expert travel support, launched March 27, 2025.
NextTrip Groups (formerly TA Pipeline) – A premier group travel and MICE platform supporting destination weddings, conferences, conventions, and affinity group travel for groups ranging from 50 to 5,000 travelers.
NextTrip Pro (formerly Travel Magazine Pro)– Our premium digital editorial, advisor engagement, and travel commerce platform designed for travel agencies, advisors, and agents to compete online and offline.
Groups Platform – A solution for complex travel needs such as conferences, conventions, and destination weddings, with several group bookings completed within the first 60 days of launch from leads generated by Five Star Alliance.
NXT2.0 Platform Features
Existing Features
Our marketplace at nexttrip.com offers tools for browsing and comparing flights, hotels, tours, cruises, and activities. We allow travelers to defer payments on select vacation packages with our proprietary PayDlay program, which allows travelers to purchase travel with a small deposit and make subsequent payments between purchase and the week before travel, with no interest charged. Registered NextTrip travelers can manage bookings, receive updates on special offers, and subscribe to newsletters. We use security controls intended to safeguard customer information, including controls related to payment card processing.
NXT2.0 equips travelers with a seamlessly integrated planning and booking ecosystem. Within a personalized profile, users can explore a curated library of videos and editorial content tailored to their interests, earmark preferred destinations and activities, and engage a dedicated concierge team for travel planning support. Travelers may transact digitally through the platform’s booking engine or speak directly with a call-center specialist, all while utilizing proprietary payment tools such as PayDlay.
Technology and Infrastructure
Our websites are hosted using cloud services distributed globally across multiple regions, designed to manage increases in traffic through scalable computing power without requiring software changes. Our cloud services provide scalable and redundant Internet connectivity as well as redundant power and cooling. We use industry-standard security methods designed to protect the integrity of our networks and the confidentiality of data. Access to NextTrip’s networks and the servers and databases on which confidential data is stored is protected by industry-standard firewall and encryption technology. Physical access to our servers and related equipment is secured by limiting access to the data center to operations personnel only.
Promethean Interactive Platform
Promethean is an interactive video overlay platform that we license on a perpetual basis and are integrating to support advertising monetization and the connection between our Media and Travel segments. We are integrating this platform into JournyGO’s video content with interactive overlays that allow users to initiate travel bookings directly from streaming content through contextual calls-to-action without interrupting the viewing experience. Promethean is intended to support our “Watch. Scan. Book. Go.” ecosystem, by linking relevant media content to our travel booking capabilities.
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Revenue Strategy and Development of an Integrated Travel and Media Ecosystem
NextTrip’s revenue strategy is built on two complementary and mutually reinforcing revenue streams generated across our two operating segments. Destination content can generate advertising and sponsorship revenue while inspiring viewers to explore and book travel experiences. Group and event programs can create bookings alongside opportunities for branded content, creator engagement, and sponsorships. Together, the two segments create an integrated model in which media drives travel demand and travel experiences generate new content and commercial opportunities.
Travel Segment Revenue
We generate Travel segment revenue through commissions, markups, and service fees on travel bookings across hotels, vacation rentals, cruises, packages, and related travel services. 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 the Company and the product supplier (as is the case with the majority of NextTrip’s products), which allows us to set our own retail pricing. Commission-based travel products are generally lower margin than directly negotiated travel products. Our strategy emphasizes higher-value travel segments, including luxury travel, cruise, and group travel, which we believe offer higher transaction values, repeat business opportunities, and enhanced service economics. NextTrip Pro also contributes Travel segment revenue through affiliate commissions and sponsored booking content.
Media Segment Revenue
We generate Media segment revenue through advertising, sponsorships, branded content, and destination marketing programs across JOURNY TV and related digital platforms and Travel Magazine. Our ability to increase media revenue depends on audience growth and engagement, available advertising inventory, advertiser demand, advertising rates, and the proportion of available inventory sold. Media revenue growth also depends on expanding distribution of JOURNY TV across FAST, connected TV, and other digital platforms, which can increase audience reach and available advertising inventory. Our media properties also provide opportunities to promote our Travel segment products to interested viewers and readers, which may reduce reliance on external marketing channels.
JournyGO and the Promethean interactive overlay platform are designed to connect Media segment engagement with Travel segment bookings. Contextual booking prompts allow viewers to act on inspiration, while measurable audience responses may support advertising pricing. Results depend on adoption, integration, campaign performance, and advertiser demand.
Development of Integrated Revenue Model
Our buy-and-build strategy has assembled complementary businesses that continue serving their own markets while contributing to an integrated travel and media offering. Our focus is on connecting their capabilities so that each business can create demand and commercial opportunities for the others, strengthening the ecosystem from entertainment and inspiration through booking and fulfillment. We remain in the early stages of integrating and commercializing this model. Revenue from newer products remains small and variable, and limited marketing funding constrains growth. Further development depends on access to capital and completion of technology and operating integrations. There can be no assurance that these initiatives will achieve their intended results.
Recent Developments
Launch of NextTrip Live Destination Platform
On September 24, 2026, the Company announced the launch of NextTrip Live, a new destination entertainment platform being developed in partnership with YADA and Loaded Dice Commerce Group ("LDCG") to bring together live entertainment, destination travel, creator-led audience engagement and NextTrip's travel booking and fulfillment capabilities.
The launch of NextTrip Live represents an important next step in NextTrip's integration of YADA post-acquisition.
At the time of the acquisition, NextTrip identified destination entertainment as an opportunity to combine YADA's relationships, including LDCG, across creators, artists, brands and entertainment with NextTrip's travel booking, group travel, media and technology infrastructure. The Company also identified an initial pipeline of destination music experiences and fan travel programs as potential near-term commercial opportunities.
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NextTrip Live is intended to establish a recognizable consumer-facing platform for those experiences, creating a framework through which NextTrip, YADA and LDCG can develop destination music events, artist and fan experiences, resort activations and other entertainment-driven travel programs.
JOURNY TV Content Integration and Global Distribution Expansion
The Company continued to expand JOURNY TV’s content offering and distribution across connected television, mobile, and digital platforms. On August 6, 2026, the Company announced the ongoing global rollout of JOURNY TV, including the integration of acquired GoUSA TV content and expanded distribution across Europe and Latin America. The Company also plans regional expansion of the JOURNY brand across Asia-Pacific, the Middle East, and Africa through its strategic partnership with KC Global Media. Together with JOURNY’s existing North American distribution, these initiatives are designed to establish a unified global travel entertainment and inspiration platform targeting potential reach of more than 250 million viewers across 100 countries and more than a dozen major streaming platforms and connected applications.
The launch of the JOURNY App on Apple iOS expanded direct mobile access to JOURNY programming. In August 2026, the Company also expanded its YouTube presence through the @JournyTV channel, which had nearly 50,000 subscribers and approximately 150 shows, episodes, and travel videos at the time of the announcement, providing an additional outlet for programming, original content, and audience development.
In September 2026, the Company announced the launch of JOURNY TV and JOURNY Español on LG Channels, LG Electronics’ free ad-supported streaming television service, across 20 international markets. JOURNY TV became available in 14 markets across Europe, the Americas, and Australia, while JOURNY Español launched in Mexico, Peru, Chile, Argentina, Colombia, and Spain. JOURNY Español features programming originally produced in Spanish or professionally dubbed using human voice talent, extending JOURNY’s reach among Spanish-speaking audiences.
The expanding distribution footprint is expected to increase the Company’s available advertising inventory from approximately 1 million monthly impressions during the earlier development of its media business toward a target of 50 million monthly impressions across its media assets. This anticipated increase would provide additional capacity for advertising, sponsorships, branded content, and destination-marketing programs. These initiatives also support NextTrip’s content-to-commerce strategy by engaging consumers through entertainment and travel inspiration and, through its developing JOURNYGO capabilities and integrated travel infrastructure, connecting that engagement with trip discovery, planning, booking, and fulfillment.
Launch of NextTrip Pro
In August 2026, the Company launched NextTrip Pro, formerly known as Travel Magazine Pro, an expanded business-to-business (“B2B”) platform within the Travel segment designed to help travel advisors and agencies attract customers, generate bookings, and grow their businesses. NextTrip Pro combines marketing, client engagement, booking, group travel, and rewards services within one integrated program. Qualified travel professionals can access the core platform without subscription fees while maintaining their existing agency, host, or consortium affiliations, branding, and client relationships.
The platform brings together three complementary services through a single sign-on. NextTrip Connect enables advisors to distribute branded destination content and bookable travel offers, supported by AI-powered engagement, booking attribution, and licensed Worldia technology integrations for dynamic packaging of flights, hotels, and experiences. NextTrip Groups, the rebranded and expanded successor to TA Pipeline, provides specialized technology and fulfillment capabilities for destination weddings, meetings, events, and other organized travel. NextTrip Ownership Rewards is designed to recognize participation and reward business growth across the program.
NextTrip Pro expands the Company’s advisor distribution network while connecting capabilities assembled through its buy-and-build strategy. Media content can inspire travel demand, advisor tools can help convert that demand into individual and group bookings, and the Company’s travel infrastructure supports booking and fulfillment. Participating advisors earn commissions under applicable program terms, including on eligible air bookings, while NextTrip expects to generate transaction-based revenue from travel booked through the platform. Management believes this model can support advisor adoption, repeat booking activity, and increased utilization of the Company’s travel inventory, technology, and media content.
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Titan At-the-Market Offering
On August 31, 2026, the Company entered into an at-the-market offering agreement (the “Offering Agreement”) with Titan Partners Securities LLC, as agent (“Titan”), pursuant to which the Company may offer and sell, from time to time through Titan shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), having an aggregate offering price of up to $6,500,000 (the “Shares”) pursuant to a prospectus supplement filed with the SEC on August 31, 2026 (the “Prospectus Supplement”). Through the date of this report, 100 shares of common stock have been sold.
Pursuant to the Offering Agreement, Titan may sell the Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), including sales made by means of ordinary brokers’ transactions, including on The Nasdaq Capital Market, at market prices or as otherwise agreed with Titan. Titan will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the Shares from time to time, based upon instructions from the Company, including any price or size limits or other customary parameters or conditions the Company may impose.
The Company is not obligated to make any sales of the Shares under the Offering Agreement. The offering pursuant to the Offering Agreement will terminate upon the earlier of (i) the issuance and sale of all Shares, subject to the Offering Agreement, or (ii) the termination of the Offering Agreement as permitted therein.
The Company will pay Titan a commission rate equal to 3.5% of the aggregate gross proceeds from each sale of Shares and has agreed to provide Titan with customary indemnification and contribution rights. In addition, the Company is party to an engagement agreement with Craft Capital Management LLC (the “Prior Placement Agent”), pursuant to which, among other things, the Prior Placement Agent was granted certain exclusive rights to act as placement agent for offerings of the Company’s securities. The Prior Placement Agent has agreed to waive such exclusivity with respect to the offer and sale of the shares of our common stock under the Offering Agreement and the Prospectus Supplement in consideration of a fee equal to 2.0% of the aggregate gross proceeds received by the Company from each sale of the Shares during the nine months commencing on the date of the Prospectus Supplement. The Company will also reimburse Titan for certain specified expenses in connection with entering into the Offering Agreement.
Lind Convertible Note and Warrant
On July 21, 2026, the Company entered into a securities purchase agreement (the “SPA”) with Lind Global Fund III LP, a Delaware limited partnership (“Lind”). The Company received $4,000,000 in funding from Lind (net cash proceeds of $3,492,744 after the commitment fee, Lind’s legal fees and the payoff of an existing loan; see Note 14) in exchange for the issuance to Lind of a Senior Secured Convertible Promissory Note in the principal amount of $4,600,000 (the “Lind Note”) and a Common Stock Purchase Warrant for the purchase of 1,030,928 shares of our common stock at a price of $3.88 per share, subject to adjustment, and exercisable for five years (the “Lind Warrant” and, together with the Lind Note, the “July Securities”). As additional consideration to Lind, the Company paid a commitment fee in the amount of $120,000, which was deducted from the gross proceeds.
The Lind Note, which does not accrue interest, shall be repaid in 14 consecutive monthly installments in the amount of $328,571 beginning 120 days from the issuance date. While the Lind Note is outstanding, Lind may elect with respect to no more than two monthly payments to increase the amount of such monthly payment up to $750,000, upon notice to the Company. The monthly payments due under the Lind Note may be made by the issuance of common stock valued at the Repayment Share Price (as defined below), cash in an amount equal to 1.04 times the required payment amount, or a combination of cash and shares of our common stock. The “Repayment Share Price” is defined in the Lind Note as 90% of the average of the five lowest daily volume weighted average prices of one share of the Company’s common stock during the 20 trading days prior to the payment date. The Lind Note sets forth certain conditions that must be satisfied before the Company may make any monthly payments in shares of common stock.
The Lind Note may be converted by Lind from time to time at a price of $3.88 per share, (the “Conversion Price”). The Conversion Price is subject to adjustments from customary corporate events such as splits and stock dividends. In addition, except for Exempted Securities (as defined in the Note), in the event that the Company issues any additional shares of Common Stock or securities convertible into or exercisable for such shares at an effective price below the then Conversion Price, the Conversion Price will be reduced to such effective price. The dollar amount of any conversions by Lind will be applied toward upcoming Lind Note payments in reverse chronological order. The Lind Note may be prepaid in whole upon written notice on any business day after the earlier to occur of (i) the resale registration statement for the shares underlying the Lind Note being declared effective by the Securities and Exchange Commission or (ii) the date that the shares issued pursuant to conversion of the Lind Note may be immediately resold under Rule 144 without restriction on the number of shares to be sold or the manner of sale; but in the event of a prepayment notice, Lind may convert up to one-third of principal amount due at the lesser of the Repayment Share Price or the Conversion Price.
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Issuance of shares of common stock upon repayment or conversion of the Lind Note (the “Note Shares”) and upon exercise of the Lind Warrant (the “Warrant Shares”) is subject to an ownership limitation equal to 4.99% of the Company’s outstanding shares of common stock; provided that such limitation may be increased to up to 9.99% (and may, for the avoidance of doubt, also be decreased to 4.99%) pursuant to the terms of the SPA. Additionally, the issuance in the aggregate of any Note Shares and Warrant Shares in excess of 19.99% of the outstanding common stock shall be subject to stockholder approval in accordance with Nasdaq Listing Rule 5635(d).
Upon the occurrence of any Event of Default (as defined in the Lind Note), the Lind Note will become immediately due and payable and the Company must pay Lind an amount equal to 120% of the then outstanding principal amount of the Note, in addition to any other remedies under the Lind Note or the other Transaction Documents. Events of Default include, among others, failure of the Company to make any Note payment when due, a default in any indebtedness or adverse judgements in excess of threshold amounts, the failure of the Company to instruct its transfer agent to issue unlegended certificates in certain circumstances, the Company’s shares of common stock no longer being publicly traded or listed on a national securities exchange, any stop order or trading suspension restricting the trading in the Company’s common stock for a specified period, the announcement or consummation of a Change of Control (as defined in the SPA), the failure to file reports or filings required by the SEC, and the Company’s market capitalization falling below a threshold amount for a specified period, each as defined in the Lind Note.
The Lind Note contains certain negative covenants, including restricting the Company from the sale of assets and the sale of variable rate securities other than issuances pursuant to an ATM Agreement. Additionally, unless waived by Lind, the Company shall be required to utilize a portion of the proceeds from certain specified debt or equity transactions and asset sales to repay the outstanding principal amount due under the Lind Note.
The Company’s obligations under the Lind Note are secured by a first-priority security interest in all of its assets pursuant to the terms of a security agreement (the “Security Agreement”), in favor of Lind. The Company has also entered into a pledge agreement, (the “Pledge Agreement”) in favor of Lind with respect to the equity that it holds in its subsidiaries. In addition, the Company’s subsidiaries have guaranteed all of the obligations of the Company pursuant to the terms of the guaranty (the “Guaranty”), and the Company and one of its subsidiaries entered into a Pledge Agreement.
The Lind Warrant may be exercised via cashless exercise in the event there is no effective registration statement covering the shares of common stock underlying the Lind Warrant.
ODK Capital LLC Short-term loan agreement
On July 1, 2026, the Company entered into a short-term loan agreement with ODK Capital LLC ("OnDeck") for a principal amount of $275,000. The loan was repayable in eighteen monthly installments of $20,533 for a total repayment amount of $369,600. The origination fee was $6,875 and the total interest expense is $94,600 for a total loan cost of $101,475. On July 21, 2026, the entire outstanding principal and interest totaling $337,556 was repaid from the gross proceeds of the Lind convertible note (see above) and as of August 31, 2026, there was no outstanding balance.
Monaco Investment Partners II Line of Credit and Exchange for Series B Preferred Stock
On May 6, 2025, the Company 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. Advances under the MIP Line of Credit bore simple interest at a rate of 12% per annum, calculated from the date of each respective advance, with accrued interest payable monthly, and the outstanding principal and accrued interest were due at maturity on May 31, 2027. On July 13, 2026, the Company and MIP executed an amendment extending the maturity date to May 31, 2028, with all other significant terms, including the interest rate, unchanged. Mr. Monaco, the Chairman of our Board of Directors, controls MIP.
On August 25, 2026, the Company and MIP entered into an Exchange Agreement (the “MIP Exchange Agreement”) pursuant to which (i) the MIP Line of Credit was increased by $500,000 to $3,500,000, and MIP advanced an additional $500,000 to the Company on August 25, 2026, and (ii) MIP agreed to exchange the aggregate outstanding principal of $3,500,000, together with accrued and unpaid interest, for shares of the Company’s newly designated Series B Convertible Preferred Stock (the “Series B Preferred Stock”) at the stated value of $1,000 per share. The exchange became effective upon the filing of the Certificate of Designation of the Series B Preferred Stock with the Nevada Secretary of State on August 27, 2026. The Company issued 3,612 shares of Series B Preferred Stock to MIP in exchange for $3,500,000 of outstanding principal and $112,000 of the $112,438 of interest accrued on the original $3,000,000 of advances through August 24, 2026. No interest was accrued on the $500,000 advanced on August 25, 2026, the effective date of the MIP Exchange Agreement. The remaining $438 of accrued interest, which was not sufficient to be exchanged for a whole share, is included in accrued expenses on the balance sheet as of August 31, 2026. The MIP Line of Credit was not terminated in connection with the exchange and remains in effect on its existing terms. As of August 31, 2026, the full $3,500,000 was available for future advances through the May 31, 2028 maturity date.
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The Series B Preferred Stock has a stated value of $1,000 per share, ranks on parity with the Company’s Series A Preferred Stock and senior to the Company’s common stock, and accrues cumulative, compounding dividends at a rate of 12% per annum on the stated value, payable quarterly beginning January 2, 2027 in cash or in additional shares of Series B Preferred Stock at the Company’s election. Each share of Series B Preferred Stock is convertible at the holder’s option at any time into shares of common stock at a fixed conversion price of $3.88 per share, which is equal to the conversion price under the Company’s Lind financing (see Note 14), subject to adjustment for stock splits and similar events and to a beneficial ownership limitation of 19.99% of the Company’s outstanding common stock absent stockholder approval. The 3,612 shares issued are convertible into 930,927 shares of common stock, excluding accrued dividends. The Company may redeem the Series B Preferred Stock, in whole or in part, at any time at the stated value plus accrued and unpaid dividends; holders have no right to require redemption. The Series B Preferred Stock has no voting rights other than customary protective provisions and has a liquidation preference equal to the stated value plus accrued and unpaid dividends.
Acquisition of a 51% Interest in YADA
On June 10, 2026, the Company entered into a Stock Purchase Agreement with YADA pursuant to which the Company acquired a 51% interest in YADA, a fully licensed TikTok Partner Agency and creator-commerce platform focused on influencer engagement, audience development, digital commerce, and music artist promotional events, which the Company accounts for under the equity method (see Note 3).
Highlights of the Transaction:
|
● |
Adds a Fully Licensed TikTok Partner Agency providing access to creator recruitment, audience development, affiliate commerce, livestream commerce, and creator monetization capabilities. |
|
● |
Expands NextTrip’s Audience Acquisition Engine through access to thousands of creators and billions of aggregate followers across social media platforms. |
|
● |
Launches NextTrip’s Destination Entertainment & Creator Commerce with 4 destination music events already committed featuring exclusive artist partnerships, fan experiences, concert travel programs, and creator-led commerce initiatives. |
|
● |
Creates New Revenue Opportunities for our media platform to drive additional advertising, sponsorships, travel bookings, experiential travel, memberships, gift cards, loyalty programs, and creator commerce. |
Through YADA, the Company gains a strategic creator-commerce platform capable of driving audience acquisition, creator engagement, entertainment experiences, and travel transactions across the broader NextTrip ecosystem. NextTrip believes the acquisition represents significantly more than a traditional social media marketing initiative and includes access to pre-booked group travel programs involving several artists for exclusive concert experiences for super fans in unique destinations and premium resort venues.
Under the agreement, NextTrip will serve as the travel fulfillment partner for YADA’s music artist promotional events and related fan experiences. The Company expects to leverage its group travel capabilities through NextTrip Groups, luxury travel offerings through Five Star Alliance, concierge travel services, and proprietary travel inventory available through the NXT2.0 platform to support future event-related travel programs.
Launch of JOURNYGO – Agentic AI-Powered Watch. Scan. Book. Go. Ecosystem
On March 31, 2026, the Company launched JOURNYGO, its AI-assisted consumer engagement and booking platform within the Travel segment. JOURNYGO integrates video travel entertainment (delivered through the Company’s JOURNY TV Media segment platform), the Promethean interactive overlay technology licensed by the Company, dynamic travel packaging, and agentic AI assistance—supported by live Travel Specialists when needed—to help viewers move from inspiration to confirmed travel bookings. JOURNYGO is designed to support our “Watch. Scan. Book. Go.” content-to-commerce strategy by linking streaming content engagement with Travel segment bookings and Media segment advertising revenue.
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GoUSA TV Asset Purchase
On February 2, 2026, NextTrip, Inc. entered into an Asset Purchase Agreement with The Corporation for Travel Promotion, doing business as “Brand USA” (“Seller”), pursuant to which the Company agreed to purchase select content, brand rights, and distribution assets (collectively, the “Assets”) of GoUSA TV, a travel streaming platform originally launched to showcase destinations across the United States. GoUSA TV historically reached an estimated 200+ million viewers globally across connected TV, mobile applications, and digital platforms, including Samsung TV Plus, LG Channels, Titan OS, and TCL International.
The aggregate consideration under the Purchase Agreement is $350,000 in cash plus restricted shares of the Company with a value of $350,000 based on the weighted average price of the shares for the twenty consecutive trading days ending on the trading day two trading days prior to closing. In addition, the Company will pay to Seller a royalty equal to 15% of the Company’s gross advertising revenue from the exploitation of the acquired content rights during the three-year period beginning on the closing date. The Company has also agreed, for a three-year period beginning on closing, to pay a royalty of 1% for every $100,000 in destination booking revenue directly attributed to the acquired content, with a minimum quarterly payment of $30,000.
The GoUSA TV assets are being integrated into JOURNY TV within the Media segment. GoUSA TV content serves as a U.S.-focused demand-generation layer within NextTrip’s broader media-to-commerce ecosystem.
Facilities
Our principal executive office is located at 1560 Sawgrass Corporate Parkway, Suite 400, Sunrise Florida 33323. The lease is on a month-to-month basis, and can be terminated by either party at any time.
Results of Operations
Three Months Ended August 31, 2026 Compared to the Three Months Ended August 31, 2025
|
|
Three Months Ended August 31, |
|
|||||||||
Revenue by segment |
|
2026 |
|
|
2025 |
|
|
% Change |
|
|||
Media |
|
$ | 67,531 |
|
|
$ | 5,653 |
|
|
|
1095 |
% |
Travel |
|
|
479,156 |
|
|
|
751,995 |
|
|
|
-36 |
% |
Total Revenue |
|
$ | 546,687 |
|
|
$ | 757,648 |
|
|
|
-28 |
% |
The decrease in revenue of $210,961, or 28% for the three months ended August 31, 2026 vs. August 31, 2025 2025 is reflective of a decision to take the time needed to build a stronger foundation for future growth, prioritizing enhancements to NextTrip Pro and the consolidation of JOURNY TV and GoUSA TV over maximizing near-term revenue from our existing offerings.
The NextTrip Pro enhancements are designed to serve host agencies, individual advisors and travel influencers, while the JOURNY TV integration brought branding, programming, content licensing, technology and advertising operations onto a unified platform. These initiatives were substantially completed after quarter-end.
Our gross margin for the three months ended August 31, 2026 was 32%, as compared to 22% for the same period in 2025. The increase was primarily attributable to our Media segment, which has no cost of revenue and whose revenue increased to $67,531 from $5,653, or 12% of total revenue compared to less than 1% in the prior-year period, and to a modest improvement in our Travel segment gross margin to 23% from 21%.
Our total operating expenses for the three months ended August 31, 2026 were $3,493,131, as compared to $3,368,452 for the same period in 2025, an increase of $124,679, or 4%. The increase was primarily attributable to: (a) an increase in salary and benefits of $287,004; (b) an increase in depreciation and amortization of $120,044, (c) an increase in professional services of $43,719; (d) an increase in provision for credit loss of $88,772; (e) an increase in other expenses of $6,782; and (f) an increase in general and administrative expenses of $1,449. Partially offsetting the increases were (a) a decrease in organization costs of $374,005; (b) a decrease in sales and marketing cost of $40,822; and (c) a decrease in technology expense of $8,264.
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Salary and benefits costs were $982,542 for the three months ended August 31, 2026, as compared to $695,538 for the same period in 2025, an increase of $287,004, or 41%. The increase was comprised of: (a) an increase in salaries of $229,971 due to the addition of seven new employees; (b) an increase in payroll taxes and benefits of $55,389; and (c) and an increase in commission expense of $16,822; partially offset by a decrease from the revaluation of the SAR liability of $15,178.
We incurred general and administrative costs of $33,185 during the three months ended August 31, 2026, as compared to $31,736 in the same period in 2025, an increase of $1,449 or 5%. The increase was primarily the result of (a) $5,890 in license and filing fees primarily related to the renewal of travel licenses; (b) an increase of $2,670 for payroll service fees; (c) an increase in miscellaneous expense of $146; partially offset by a decrease in travel expenses of $4,711, a decrease in office and other expenses of $2,108, and a decrease in telephone and rent expenses of $438.
We incurred marketing costs of $133,622 during the three months ended August 31, 2026, as compared to $174,444 during the same period in 2025. The decrease of $40,822, or 23%, was due to (a) a decrease in social media marketing expenses of $36,649 resulting from the discontinuation of services provided by an external marketing firm; (b) a decrease of $20,833 in fees previously incurred from a former media advertising firm; and (c) a decrease in Travel Magazine expenses of $7,387. Partially offsetting the decreases were an increase in (a) customer outreach services of $15,146, (b) an increase in contracted services of $6,802, and (c) an increase in conference expenses of $2,099.
Professional service fees incurred in the three months ended August 31, 2026 were $1,472,791, as compared to $1,429,072 incurred during the same period in 2025, an increase of $43,719, or 3%. This increase was a result of (a) an increase in consulting fees of $221,496 due to contracts for services related to business development including our media segment; (b) an increase in lending fees of $24,375 related to bridge loan financing;, and (c) an increase in contracted services of $12,430; partially offset by (a) a decrease in investor relations expenses of $131,216 due to service contracts issued to investor relations firms in the previous year; (b) a decrease in accounting expenses of $61,555 due to audits and valuations related to acquisitions in the previous year; and (c) a decrease in legal fees of $21,811. Of the total professional service fees of $1,472,791 for the three months ended August 31, 2026, $736,057, or 50%, was incurred as non-cash expenses, as compared to $627,003, or 44% for the three months ended August 31, 2025
We incurred technology costs of $258,757 during the three months ended August 31, 2026, as compared to $267,021 during the same period in 2025. The decrease of $8,264, or 3%, was primarily attributable to: (a) a decrease in expenses in connection with JOURNY TV of $42,752 primarily due to the previous contract with Dooya to place the channel in service; (b) a decrease in software and website expenses of $3,363 for hotel connections into the NextTrip database, (c) a decrease in cloud database expenses of $1,701 primarily related to updating legacy code to optimize compatibility with our hosting infrastructure; partially offset by (a) an increase in dues and subscriptions of $32,322 due to the implementation of our new CRM and business management platform together with incremental seat licenses for newly onboarded employees; and (b) an increase in information technology and computer expenses of $7,230 primarily due to onboarding additional employees, use of outsourced IT services, and managing software subscriptions.
Organizational costs for the three months ended August 31, 2026, were $96,100, as compared to $470,105 for the same period in 2025, a decrease of $374,005, or 80%. The decrease is primarily attributed to stock options granted to former directors in the previous year.
Depreciation and amortization expense for the three months ended August 31, 2026 was $336,669, as compared to $216,625 for the same period in 2025, an increase of $120,044, or 55%. The increase was primarily due to commencing amortization upon the product launch of our FAST network, JOURNY TV, and the Journy TV, FSA, TA Pipeline, and GoUSA acquisitions in the previous year.
Provision for credit loss expense for the three months ended August 31, 2026 was $88,772, as compared to $0 for the same period in 2025. The increase was in connection with expenses for NextTrip Privilege, Inc. and the Regulation A offering, and reflects an increase in the credit loss reserve due to the uncertainty of collectability of the receivable from NextTrip Privilege, Inc.
Other operating expenses were $90,693 for the three months ended August 31, 2026, as compared to $83,911 for the same period in 2025. The $6,782 increase, or 8%, was primarily due to increased merchant processing fees related to group travel.
During the three months ended August 31, 2026, we realized net other expense of $371,328, as compared to net other income of $304,722 in the same period in 2025. The increase in net other expense of $676,050 was primarily due to the reduction in other income received of $580,235 related to amounts from NextTrip Group, LLC in the second quarter of fiscal year 2026 related to the NextPlay Technologies settlement, an increase in interest expense of $362,772, and an increase of $39,285 due to the transaction costs allocable to the warrant liability related to the Lind financing; partially offset by a gain on the revaluation of the Lind warrant liability of $296,242 and an increase in the gain on the derivative liability related to the derecognition of the put option from the TA Pipeline purchase in the second quarter of fiscal year 2027.
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Preferred dividends for the three months ended August 31, 2026 were $28,314, as compared to $183,263, for the same period in 2025, a decrease of $154,949, or 85%. The decrease was due to dividends paid to the holders of shares of Series L and Series M Preferred stock in the second quarter of fiscal year 2026, which shares were converted to common shares in November 2025.
|
|
Three Months Ended August 31, |
|
|||||||||
Operating loss by segment |
|
2026 |
|
|
2025 |
|
|
% Change |
|
|||
Media |
|
$ | (603,626 |
) |
|
$ | (451,050 |
) |
|
|
34 |
% |
Travel |
|
|
(307,289 |
) |
|
|
(293,762 |
) |
|
|
5 |
% |
Total segment operating loss |
|
|
(910,915 |
) |
|
|
(744,812 |
) |
|
|
22 |
% |
Corporate |
|
|
(2,406,240 |
) |
|
|
(2,458,065 |
) |
|
|
-2 |
% |
Total Operating loss |
|
$ | (3,317,155 |
) |
|
$ | (3,202,877 |
) |
|
|
4 |
% |
The increase of $114,278, or 4% in operating loss in the second quarter of fiscal year 2027 as compared to second quarter fiscal year 2026 was primarily due the $152,576 increase in the Media segment operating loss, together with the $13,527 increase in the Travel segment operating loss, partially offset by a decrease in the corporate expenses of $51,825. The increase in the operating loss of the Media segment of $152,576 is due to the start-up of operations and is primarily made up of contracted services in connection with the JOURNY channel. The increase in operating loss for the Travel segment of $13,527 is primarily due to the decreased group and commission revenues.
The increase in the net loss on the share of net earnings from the equity method investee of $35,200 was due to losses incurred in the 51% investment in YADA.
Our net loss applicable to common stockholders for the three months ended August 31, 2026, was $3,751,997, as compared to $3,081,418 for the same period in 2025, an increase of $670,579, or 22%. The increase was primarily attributable to an increase in operating loss of $114,278, an increase in other expense of $676,050, an increase in share of net loss of equity method investee of $35,200; partially offset by a decrease in preferred dividends of $154,949.
Six Months Ended August 31, 2026 Compared to the Six Months Ended August 31, 2025
|
|
Six Months Ended August 31, |
|
|||||||||
Revenue by segment |
|
2026 |
|
|
2025 |
|
|
% Change |
|
|||
Media |
|
$ | 108,483 |
|
|
$ | 5,653 |
|
|
|
1819 |
% |
Travel |
|
|
1,889,939 |
|
|
|
890,822 |
|
|
|
112 |
% |
Total Revenue |
|
$ | 1,998,422 |
|
|
$ | 896,475 |
|
|
|
123 |
% |
The increase in revenue of $1,101,947, or 123% for the six months ended August 31, 2026 vs. August 31, 2025 was primarily due to an increase in group travel-related revenues and cruise bookings. In addition, our Media segment generated revenue from direct advertising sales and programmatic revenues.
Our gross margin for the six months ended August 31, 2026 was 19%, as compared to 23% for the same period in 2025. The decrease was attributable to our Travel segment, whose gross margin declined to 15% from 22% as merchant-of-record bookings, which are recorded gross with the related supplier cost included in cost of revenue, represented a larger share of Travel revenue relative to agent (commission) bookings following our acquisitions of FSA and TA Pipeline. Travel revenue increased to $1,889,939 from $890,822, while Travel cost of revenue increased to $1,614,347 from $691,994. The decline in consolidated gross margin was partially offset by our Media segment, which has no cost of revenue and whose revenue increased to $108,483 from $5,653, or 5% of total revenue compared to less than 1% in the prior-year period.
Our total operating expenses for the six months ended August 31, 2026 were $6,614,983, as compared to $8,047,095 for the same period in 2025, a decrease of $1,432,112, or 18%. The decrease was primarily attributable to stock options granted to former directors and other non-cash professional services expenses incurred during the first quarter of fiscal year 2026, as further discussed below. Total non-cash expenses, primarily consisting of stock-based compensation, stock options granted to former directors, common shares issued to third parties for services, and depreciation and amortization totaled $1,948,686, or 29% of our operating expenses for the six months ended August 31, 2026, and $4,253,507, or 53% of our operating expenses for the same period in 2025.
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Salary and benefits costs were $1,889,943 for the six months ended August 31, 2026, as compared to $1,392,453 for the same period in 2025, an increase of $497,490, or 36%. The increase was comprised of: (a) an increase in salaries of $381,013 due to the addition of seven new employees; (b) related increase in payroll taxes and benefits of $116,141; and (c) an increase in commission expense of $14,250; partially offset by a decrease in SAR expense of $7,724, and a decrease in bonus expense of $6,190.
Stock-based compensation was a credit of $13,660 for the six months ended August 31, 2026, as compared to $138,325 for the same period in 2025. This decrease of $151,985, or 110%, was primarily due to options issued in the first quarter of fiscal year 2026, that did not recur in the first quarter of fiscal year 2027 and a true up of stock-based compensation to reflect the employee portion of payroll taxes.
We incurred general and administrative costs of $67,811 during the six months ended August 31, 2026, as compared to $62,324 in the same period in 2025, an increase of $5,487 or 9%. The increase was primarily the result of (a) $13,445 in license and filing fees primarily related to the renewal of travel licenses; (b) an increase in payroll service fees of $4,559; (c) an increase of $3,577 in office expenses and computers issued to new employees; (d) an increase in telephone expense of $1,977; and (e) an increase in miscellaneous expense of $146; partially offset by a decrease in travel expense of $16,196, and a decrease in rent expense of $2,021.
We incurred marketing costs of $268,470 during the six months ended August 31, 2026, as compared to $264,479 during the same period in 2025. The increase of $3,991, or 2%, was for (a) increased Travel Magazine expenses of $59,563 aimed at driving traffic and generating business across all of our brands; (b) an increase in contracted services for marketing of $34,270; (c) an increase in customer outreach services of $10,156; and (d) an increase in conference expenses of $2,099. Partially offsetting the increase was a decrease of $83,333 in fees previously incurred from a former media advertising firm, and a decrease in social media expense of $18,764 due to discontinuation of services provided by external marketing firm.
Professional service fees incurred in the six months ended August 31, 2026 were $2,759,162, as compared to $2,598,548 incurred during the same period in 2025, an increase of $160,614, or 6%. This increase was a result of: (a) an increase in consulting fees of $567,698 due to contracts for services related to business development, including our media segment; (b) an increase in legal fees of $23,627 due to services related to various regulatory filings and acquisitions; and (c) an increase in contracted services of $45,595 related to travel and other operations; partially offset by a decrease in investor relations expenses of $360,309 due to service contracts issued to investor relations firms in the previous year; a decrease in accounting expenses of $95,372 due to audits and valuations related to acquisitions in the previous year, and a decrease in lending fees of $20,625 related to bridge loan financings during the first quarter of fiscal 2026. Of the total professional service fees of $2,759,162 for the six months ended August 31, 2026, $1,289,008, or 47%, was incurred as non-cash expenses, as compared to $1,323,199, or 51% for the six months ended August 31, 2025
We incurred technology costs of $513,485 during the six months ended August 31, 2026, as compared to $568,836 during the same period in 2025. The decrease of $55,351, or 10%, was primarily attributable to: (a) a decrease in expenses in connection with JOURNY TV of $128,335 primarily due to the previous contract with Dooya to place the channel in service; (b) a decrease in cloud database expenses of $10,970 primarily related to updating legacy code to optimize compatibility with our hosting infrastructure; and (c) a decrease in software and website expenses of $7,953 for hotel connections into the NextTrip database; partially offset by (a) an increase in dues and subscriptions of $73,599 due to the implementation of our new CRM and business management platform together with incremental seat licenses for newly onboarded employees; and (b) an increase in information technology and computer related expenses of $18,308 primarily due to onboarding additional employees, use of outsourced IT services, and managing software subscriptions.
Organizational costs for the six months ended August 31, 2026, were $146,204, as compared to $2,469,775 for the same period in 2025, a decrease of $2,323,571, or 94%. The decrease is primarily attributed to stock options granted to former directors in the previous year.
Depreciation and amortization expense for the six months ended August 31, 2026 was $673,338, as compared to $423,274 for the same period in 2025, an increase of $250,064, or 59%. The increase was primarily due to commencing amortization upon the product launch of our FAST network, JOURNY TV, and the JOURNY TV, FSA, TA Pipeline, and GoUSA acquisitions in the previous year.
Provision for credit loss expense for the six months ended August 31, 2026 was $154,333, as compared to $0 for the same period in 2025. The increase was in connection with expenses for NextTrip Privilege, Inc. and reflects an increase in the credit loss reserve due to the uncertainty of collectability of the receivable from NextTrip Privilege, Inc.
Other operating expenses were $155,897 for the six months ended August 31, 2026, as compared to $129,081 for the same period in 2025. The $26,816 increase, or 21%, was primarily due to increased merchant processing fees related to group travel.
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During the six months ended August 31, 2026, we realized net other expense of $583,044, as compared to net other income of $498,533 in the same period in 2025. The increase in net other expense of $1,081,577 was primarily due to (a) a reduction in other income of $1,120,613 received from NextTrip Group, LLC related to the NextPlay Technologies settlement, (b) an increase in interest expense of $338,021 primarily due to interest on various financing transactions, and (c) an increase in transaction costs allocable to the Lind warrant liability of $39,285; partially offset by (a) a gain on the revaluation of the Lind warrant liability of $296,242; (b) a $70,100 decrease in loss on extinguishment of liability from the previous year, and a gain on the revaluation of the TA Pipeline derivative liability of $50,000.
Preferred dividends for the six months ended August 31, 2026 were $48,005, as compared to $247,725, for the same period in 2025, a decrease of $199,720, or 81%. The decrease was due to dividends paid to the holders of shares of Series L and Series M Preferred stock in the first quarter of fiscal year 2026, which shares were converted to common shares in November 2025.
|
|
Six Months Ended August 31, |
|
|||||||||
Operating loss by segment |
|
2026 |
|
|
2025 |
|
|
% Change |
|
|||
Media |
|
$ | (1,229,641 |
) |
|
$ | (643,119 |
) |
|
|
91 |
% |
Travel |
|
|
(522,235 |
) |
|
|
(691,755 |
) |
|
|
-25 |
% |
Total segment operating loss |
|
|
(1,751,876 |
) |
|
|
(1,334,874 |
) |
|
|
31 |
% |
Corporate |
|
|
(4,479,032 |
) |
|
|
(6,507,740 |
) |
|
|
-31 |
% |
Total Operating loss |
|
$ | (6,230,908 |
) |
|
$ | (7,842,614 |
) |
|
|
-21 |
% |
The decrease of $1,611,706, or 21% in operating loss for the six months ended August 31, 2026 as compared to the six months ended August 31, 2025 was primarily due to a decrease in corporate expenses of $2,028,708 as a result of stock-based compensation issued to board members in the first quarter of fiscal year 2026. The increase in the operating loss of the Media segment of $586,522 is due to the start-up of operations and is primarily made up of contracted services in connection with our JOURNY TV channel. The decrease in operating loss for the Travel segment of $169,520 is due to the increased revenues from the Five-Star Alliance and TA Pipeline acquisitions.
The net loss on the share of net earnings from the equity method investee was $35,200 as compared to $11,307, an increase of $23,893. This was due to losses incurred for our 51% interest in YADA in 2026 in comparison to the 49% interest in FSA from March 1, 2025 through April 9, 2025 prior to when the full acquisition was finalized.
Our net loss applicable to common stockholders for the six months ended August 31, 2026, was $6,897,157, as compared to $7,603,113 for the same period in 2025, a decrease of $705,956, or 9%. The decrease was primarily attributable to a decrease in operating loss of $1,611,706, and a decrease in preferred dividends of $199,720, partially offset by an increase in net other expense of $1,081,577 primarily due to a settlement agreement between NextTrip Group, LLC and the Company related to the NextPlay Technologies, Inc. promissory note receivable that resulted in other income in the previous year, and an increase in share of net loss for the equity method investee of $23,893.
Liquidity and Capital Resources
Overview
We have historically funded our operations through private placements of our securities, short-term promissory notes, and advances from related parties. Given the limited revenue generated since inception, our principal sources of liquidity continue to be cash on hand and external financing rather than cash generated from operations. Our principal short-term uses of cash are operating expenditures, including personnel, technology development, sales and marketing, professional fees, and integration costs related to our recent acquisitions. Principal longer-term uses of cash include scheduled debt service, payment of accrued interest, and additional investment in our travel and technology platforms.
As of August 31, 2026, we had cash of $ 1,145,136 and a working capital deficit of $3,195,601, as compared to cash of $ 1,696,090 and a working capital deficit of $761,004 as of February 28, 2026. The increase in our working capital deficit was primarily attributable to the current portion of the Lind convertible note and increases in accrued expenses, accounts payable, and notes payable, partially offset by a decrease in deferred revenue. As of August 31, 2026, the aggregate outstanding balance on our short-term promissory notes, including accrued interest, totaled $535,100, and the balance on our related-party line of credit totaled $0, excluding $438 of accrued interest that was not exchanged and is in accrued liabilities. Additionally, the Predecessor Series B Preferred Stock was redeemed in full on July 21, 2026 for $1,151,830 using proceeds of the Lind note, and no shares remained outstanding at August 31, 2026.
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Going Concern — Substantial Doubt and Management’s Plans
Conditions giving rise to substantial doubt. In accordance with Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements — Going Concern, management evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these financial statements are issued. As of August 31, 2026, we have incurred recurring net losses, have negative cash flows from operations, have an accumulated deficit, have a working capital deficit, and have generated limited revenue since inception. For the six months ended August 31, 2026, we incurred a net loss of $6,849,152 (before preferred dividends) and used $4,803,656 of cash in operating activities. Based on our current operating plan, we estimate that we will require a minimum of $5.5 million of cash to fund existing operations for the twelve months following the issuance date of these financial statements, which exceeds our cash balance of $1,145,136 as of August 31, 2026. These conditions and events, considered in the aggregate, raise substantial doubt about our ability to continue as a going concern within one year after the date that these financial statements are issued.
Management’s plans. To address the conditions described above, management’s plans include the following: (i) continuing to raise capital through public and private placements of equity and equity-linked securities, including our offerings of common stock, convertible preferred stock, and debt instruments; (ii) drawing on related-party financing arrangements as available (including subsequent related-party financings that have generated aggregate gross proceeds of approximately $395,000 through the date of this Quarterly Report) and seeking new debt financing on commercially reasonable terms; (iii) continuing to integrate recently acquired businesses (TA Pipeline LLC, FSA, JOURNY TV, GoUSA, and YADA) to accelerate revenue generation and expand our distribution channels; (iv) managing discretionary operating expenditures, including selectively deferring non-essential technology and marketing spend; and (v) pursuing strategic partnerships intended to monetize our travel and content assets. Management is in active discussions with prospective investors and lenders, but no commitments have been received as of the issuance date of these financial statements.
Management’s conclusion. Although management believes that its plans, if successfully executed, would provide sufficient liquidity to fund operations for the next twelve months, these plans are not entirely within the Company’s control. The ability to consummate additional financings on acceptable terms, generate sufficient revenue from acquired businesses, and otherwise execute on management’s plans cannot be considered probable as of the issuance date of these financial statements. Accordingly, management has concluded that its plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Sources of Liquidity
Our principal sources of liquidity during the six months ended August 31, 2026 consisted of: (i) the issuance of the Lind senior secured convertible note and warrant; (ii) net proceeds from private placements of common stock, preferred stock, and warrants; (iii) advances from a related party under the MIP Line of Credit; and (iv) issuances of short-term promissory notes (including original-issue-discount notes). During the six months ended August 31, 2026, we received gross proceeds of $4,000,000 from the Lind convertible note and warrant (before $169,700 of debt issuance costs) and aggregate gross proceeds of $1,390,150 from private placements of equity and equity-linked securities, consisting of $1,015,000 from Series B Convertible Preferred Stock ($895,000 net of $120,000 of offering costs), $200,150 from common stock, $150,000 from preferred stock ($145,000 net of $5,000 of offering costs), and $25,000 from warrant exercises. We also received $407,000 from the sale of short-term promissory notes (offset by $386,599 of note repayments) and $500,000 of advances from Monaco Investment Partners II, LP, a related party, under the MIP Line of Credit. We do not currently have any committed external sources of capital, other than the MIP Line of Credit, which has $3,500,000 available at August 31, 2026.
Amounts noted reflect gross proceeds received by the Company which were reduced by original issue discounts, placement agent fees, and other offering expenses, as applicable. The March 25, 2026 transaction with Donald Monaco, the April 15, 2026 transaction with KCGM, the May 8, 2026 transaction with KCGM, and the June 18, 2026 transaction with David Jiang are related-party transactions. Mr. Monaco is a director and Andy Kaplan, a director, is the co-trustee of the Kaplan-Wright Family Trust, which owns 50% of KC Global Media Entertainment LLC, which in turn owns 100% of KCGM; Mr. Kaplan also serves as chairman of KCGM. These transactions were entered into on substantially the same terms as the contemporaneous transactions with unaffiliated investors.
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March 24, 2026 — 1800 Diagonal Lending Note
On March 24, 2026, we issued a short-term promissory note to 1800 Diagonal Lending LLC in the principal amount of $180,550. The note includes an original issue discount of $23,550 and bears a one-time interest charge of 13%, which was applied to the principal on the issuance date. The note is payable in five installments, with the first installment of $102,011 due on September 30, 2026 and four equal subsequent installments of $25,503 due on the 30th day of each of the next four months. The note may be prepaid at any time without penalty. Upon an event of default by the Company, any unpaid principal and interest may be converted into shares of our common stock at the election of 1800 Diagonal Lending LLC. As of August 31, 2026, the outstanding principal balance was $204,100.
March 25, 2026 — Donald P. Monaco Insurance Trust Short-Term Promissory Note (related party)
On March 25, 2026, the Company issued an unsecured short-term promissory note (the “Monaco Trust Note”) in the original principal amount of $80,000 to The Donald P. Monaco Insurance Trust (the “Trust”), the trustee of which is Donald P. Monaco, the Chairman of our Board of Directors. The Monaco Trust Note bears interest at 7.5% simple interest per annum and was originally scheduled to mature on April 3, 2026. The Monaco Trust Note may be prepaid at any time without penalty. The Monaco Trust Note was approved by the Board, including the independent members thereof.
The Monaco Trust Note was amended to increase the principal amount and extend the maturity date, as follows: (i) on April 6, 2026, the Company and the Trust entered into a First Amendment increasing the principal balance to $155,000 and extending the maturity date to April 13, 2026; (ii) on April 9, 2026, the Company and the Trust entered into a Second Amendment increasing the principal balance to $290,000 and extending the maturity date to April 30, 2026; (iii) on April 27, 2026, the Company and the Trust entered into a Third Amendment increasing the principal balance to $400,000 and extending the maturity date to May 31, 2026; (iv) on April 30, 2026 the Company and the Trust entered into a Fourth Amendment increasing the principal balance to $510,000; (v) on May 12, 2026, the Company repaid $110,000 of principal under the Monaco Trust Note; and on May 29, 2026 the Company and the Trust entered into a Fifth Amendment increasing the principal balance to $600,000. On June 3, 2026 the Company and the Trust (the “Parties”) entered into the Sixth Amendment extending the maturity date to June 30, 2026; on June 8, 2026 the Parties entered into the Seventh Amendment increasing the principal balance to $700,000, and on June 30, 2026 the Parties entered into the Eighth Amendment increasing the principal balance to $950,000 and extending the maturity date to July 15, 2026. The 7.5% interest rate, which is lower than the 12% rate borne by the MIP Line of Credit, reflects the short-term, on-demand nature of the Monaco Trust Note. The Monaco Trust Note, including each amendment, was approved by the Audit Committee of the Board and the full Board, including the independent members thereof. On July 21, 2026 the $950,000 of principal and $11,162 of interest were paid off using proceeds from Lind Global Fund III LP, and there is no outstanding balance as of August 31, 2026.
April 15, 2026 — Series A Convertible Preferred Stock Sale to KCGM (related party)
On April 15, 2026, we entered into a securities purchase agreement with KCGM pursuant to which we issued and sold 16,667 shares of Series A Convertible Preferred Stock at a purchase price of $3.00 per share, for total proceeds of $50,000, together with a warrant to purchase up to 8,333 shares of common stock at an exercise price of $3.00 per share, expiring 3.5 years from the issue date. As described above, Andy Kaplan, a director of the Company, serves as chairman of KCGM; accordingly, this transaction is a related-party transaction. The transaction was approved by the Audit Committee of the Board and the full Board, including the independent members thereof.
May 6, 2026 — Helena Global Series B Preferred Private Placement
On May 6, 2026, the Company entered into a Securities Purchase Agreement with Helena Global Investment Opportunities 1 Ltd. (“Helena”) pursuant to which the Company issued 408,421 shares of Series B Convertible Preferred Stock (the “Predecessor Series B Preferred”), consisting of 368,421 shares issued for cash proceeds of $1,015,000 and 40,000 Issuance Fee Shares issued for no additional consideration, together with a five-year warrant to purchase 100,000 shares of common stock at an exercise price of $2.755 per share. The Predecessor Series B Preferred had a stated value of $2.755 per share, or $1,125,200 in the aggregate, accrued dividends at 12% per annum (18% per annum upon an Event of Default), was convertible at the option of the holder at an initial conversion price of $2.755 per share, and was subject to mandatory redemption by the Company on August 30, 2026 at stated value plus all accrued and unpaid dividends, subject to the holder’s right to extend that date to December 31, 2026.
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The Predecessor Series B Preferred was classified as mezzanine equity in accordance with ASC 480-10-S99-3A because the holder’s right to convert the shares into common stock at any time prior to the mandatory redemption date, together with the holder’s right to elect a one-time extension of that date, placed the form and timing of settlement outside the Company’s sole control. The carrying amount was accreted to the redemption amount from the issuance date to the mandatory redemption date using the effective interest method. Accretion and accrued dividends were recognized as charges to accumulated deficit as deemed dividends to the holder and reduce net loss attributable to common stockholders for purposes of basic and diluted loss per share pursuant to ASC 260-10-S99. Accreted amounts and dividends were not recognized as interest expense.
At May 31, 2026, 408,421 shares of Predecessor Series B Preferred were outstanding with a mezzanine carrying value of $807,997.
On July 21, 2026, the Company redeemed all 408,421 outstanding shares of Predecessor Series B Preferred in full for cash of $1,151,830, consisting of aggregate stated value of $1,125,200 and accrued and unpaid dividends of $26,630, using a portion of the net proceeds of the senior secured convertible note issued to Lind Global Fund III LP on that date (see Note 14 - Convertible Note Payable and Warrant Liability). During the period from June 1, 2026 through the redemption date, the Company recorded accretion of the Series B Preferred Stock discount of $326,205, which was recognized as interest expense and is included in net loss for the three and six months ended August 31, 2026. The Company also recorded accrued and unpaid dividends of $17,628 on the Series B Preferred Stock through the redemption date, which were charged to accumulated deficit and are reflected as a deemed dividend in the computation of net loss attributable to common stockholders for the three and six months ended August 31, 2026. No shares of Predecessor Series B Preferred were converted into common stock, the Mandatory Default Amount was never triggered, no liquidated damages were incurred under the registration rights provisions of the Securities Purchase Agreement, and no shares remained outstanding at August 31, 2026.
In connection with the redemption, the Guarantee and Pledge Agreement under which 1,365,314 shares of common stock owned by the Company’s Chief Executive Officer had been pledged to secure the Company’s obligations to Helena was released. The Investor Warrant and the placement agent warrants issued in connection with the May 2026 private placement remain outstanding and continue to be classified within permanent stockholders’ equity.
May 6, 2026 — Common Stock Sale to a Private Investor
On May 6, 2026, we entered into a securities purchase agreement with a private investor pursuant to which we issued and sold 36,400 shares of common stock at a purchase price of $2.75 per share, together with a three-year warrant to purchase up to 18,200 shares of common stock at an exercise price of $2.75 per share, for total proceeds of $100,100. The investor is not a related party.
May 8, 2026 — Common Stock Sale to KCGM (related party)
On May 8, 2026, we entered into a securities purchase agreement with KC Global Media Asia, LLC pursuant to which we issued and sold 18,182 shares of common stock at a purchase price of $2.75 per share, for total proceeds of $50,000, together with a warrant to purchase up to 9,091 shares of common stock at an exercise price of $3.00 per share, expiring on May 8, 2029. As described above, Andy Kaplan, a director of the Company, serves as chairman of KC Global Media Asia, LLC; accordingly, this transaction is a related-party transaction. The transaction was approved by the Audit Committee of the Board and the full Board, including the independent members thereof.
May 26, 2026 — 1800 Diagonal Lending Note
On May 26, 2026, we issued a short-term promissory note to 1800 Diagonal Lending LLC in the principal amount of $172,500. The note includes an original issue discount of $22,500 and bears a one-time interest charge of 13%, which was applied to the principal on the issuance date. The note is payable in five installments, with the first installment of $97,462 due on November 30, 2026 and four equal subsequent installments of $24,366 due on the 30th day of each of the next four months. The note may be prepaid at any time without penalty. Upon an event of default by the Company, any unpaid principal and interest may be converted into shares of our common stock at the election of 1800 Diagonal Lending LLC. At August 31, 2026, the outstanding principal balance was $195,000.
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June 9, 2026 — Short-term Promissory Note
On June 9, 2026, we sold a short-term promissory note to a private investor for $100,000. In connection with the note, we issued the investor a three-year warrant to purchase up to 25,000 shares of common stock at an exercise price of $2.75 per share. The maturity date of the note was August 8, 2026, and may be prepaid at any time without penalty. The investor has agreed to extend the maturity date of the note on a month-to month basis.
June 16, 2026 — Warrant Exercise
On June 16, 2026, a private investor exercised a warrant to purchase 8,278 shares of common stock at $3.02 per share, resulting in gross proceeds of $25,000.
June 18, 2026 — Common Stock Sale to David Jiang (related party)
On June 18, 2026, David Jiang, a director, purchased 18,200 shares of common stock in a private placement at $2.75 per share, resulting in gross proceeds of $50,050.
July 1, 2026 — ODK Capital LLC Short-term loan agreement
On July 1, 2026, the Company entered into a short-term loan agreement with OnDeck for a principal amount of $275,000. The loan was repayable in eighteen monthly installments of $20,533 for a total repayment amount of $369,600. The origination fee was $6,875 and the total interest expense is $94,600 for a total loan cost of $101,475. On July 21, 2026, the entire outstanding principal and interest totaling $337,556 was repaid from the gross proceeds of the Lind convertible note (see below) and as of August 31, 2026, there was no outstanding balance.
July 21, 2026 — Lind Global Fund III LP Convertible Promissory Note
On July 21, 2026, the Company entered into a Securities Purchase Agreement with Lind Global Fund III LP (the “Investor”) and issued to the Investor a Senior Secured Convertible Promissory Note in the principal amount of $4,600,000 (the “Note”) and a Common Stock Purchase Warrant to purchase 1,030,928 shares of common stock at an exercise price of $3.88 per share (the “Warrant”). The funding amount was $4,000,000, and the $600,000 difference between the principal amount and the funding amount represents an original issue discount.
The funding amount was reduced at closing by a commitment fee of $120,000, $49,700 of the Investor’s legal fees, and a $337,556 payoff of an existing loan owed to ODK Capital, LLC, resulting in net cash proceeds to the Company of $3,492,744. A portion of the net proceeds was used to redeem the Predecessor Series B Preferred and repay the Donald P. Monaco Insurance Trust promissory note.
The Note does not bear interest other than upon an event of default. Principal is repayable in fourteen consecutive monthly installments of $328,571 commencing on the date that is 120 days after the July 21, 2026 issuance date, with each installment payable at any time during the applicable calendar month. Any principal amount then outstanding is due on the January 21, 2028 maturity date.
Each monthly installment may be settled, at the Company’s option, in cash in an amount equal to 104% of the installment, in shares of common stock, or in a combination of the two. Shares issued in settlement of an installment are valued at 90% of the average of the five lowest daily volume weighted average prices during the twenty trading days preceding the payment date. Settlement in shares is permitted only if the shares may be immediately resold under Rule 144 without restriction or are covered by an effective resale registration statement.
Between payment dates, the Investor may increase the amount of up to two monthly installments to as much as $750,000 each by delivering written notice, with the increased amount payable within one day of the Company’s receipt of that notice. Amounts paid in excess of the scheduled installment reduce subsequent installments in reverse chronological order. The maximum incremental amount that the Investor may require the Company to pay ahead of schedule is $842,858.
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The Note is convertible at the Investor’s option, in whole or in part, into common stock at a conversion price of $3.88 per share, subject to customary adjustments and to a full-ratchet adjustment upon the issuance of additional shares of common stock at an effective price below the conversion price. Amounts converted reduce subsequent monthly installments in reverse chronological order. The Company may prepay the Note in full at par following the earlier of effectiveness of the resale registration statement or the date the underlying shares may be resold under Rule 144 without restriction, in which case the Investor may elect to convert up to one-third of the outstanding principal amount.
The Note is secured by substantially all of the assets of the Company and its subsidiaries and is guaranteed by the Company’s subsidiaries. Events of default include, among others, failure to pay amounts when due, failure to deliver shares when required, a change of control, the common stock ceasing to be listed on a trading market, and the Company’s market capitalization remaining below $12.5 million for ten consecutive trading days. Upon an event of default, the Investor may declare due an amount equal to 120% of the outstanding principal amount and may convert principal at a discount to the market price of the common stock. As of August 31, 2026, the outstanding principal balance on the note was $4,600,000.
The Warrant entitles the Investor to purchase 1,030,928 shares of common stock at $3.88 per share and expires on July 21, 2031. The Warrant provides for cashless exercise in specified circumstances and contains a full-ratchet exercise price adjustment upon a dilutive issuance. In the event of a tender offer or exchange offer or other fundamental transaction, the Investor may require the Company to purchase the unexercised portion of the Warrant for its Black-Scholes value in cash.
Chief Executive Officer Compensation Deferral (related party)
William Kerby, our Chief Executive Officer, agreed at his election to defer $100,000 of his annual salary, together with payments related to personal financial guarantees and his car allowance through July 15, 2026. Beginning July 16, 2026 Mr. Kerby began receiving his full salary, together with payment for personal financial guarantees and his car allowance. As of August 31, 2026, the aggregate compensation deferred by Mr. Kerby totaled $240,561. The deferred amounts accrue interest at a rate of 7.5% per annum.
Material Cash Requirements
Our material cash requirements as of August 31, 2026 consist principally of short and long-term promissory notes, and accrued interest. Short-term promissory notes outstanding at August 31, 2026 had an aggregate repayment amount due of approximately $535,100 and a carrying value, net of unamortized discount, of $461,217, with maturities through March 31, 2027, including the March 24, 2026 and May 26, 2026 1800 Diagonal Lending notes (which amortize in installments), and the October 17, 2025 notes issued to two private investors (maturing November 17, 2026, as amended), and note issued to a private investor on June 9, 2026 with a maturity date of August 8, 2026, which the investor has agreed to extend the maturity date on a month-to-month basis. No principal was outstanding under the MIP Line of Credit at August 31, 2026, following the August 2026 exchange of $3,500,000 of principal for Series B Preferred Stock. The line remains available through its May 31, 2028 maturity date, as amended, and advances accrue interest at 12% per annum payable monthly. Additionally, the Lind senior secured convertible note has a principal balance of $4,600,000 (carrying amount of $3,142,015) and is repayable in fourteen monthly installments of $328,571 beginning 120 days after its July 21, 2026 issuance, with $1,314,290 of principal due in the fiscal year ending February 28, 2027.
We have ongoing operating cash requirements for personnel, technology development, marketing, professional fees, and acquisition integration. Based on our current operating plan, we estimate that cash required to fund operations for the twelve months following August 31, 2026 will be approximately $5.5 million, which exceeds our cash balance at August 31, 2026. We do not have any material commitments for capital expenditures, and we do not have any material purchase obligations, take-or-pay contracts, or unconditional purchase obligations outside the ordinary course of business. We have no off-balance sheet arrangements (within the meaning of Item 303(b)(1)(ii) of Regulation S-K) that have, or are reasonably likely to have, a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.
Cash Flow Analysis
Six Months Ended August 31, |
|
2026 |
|
|
2025 |
|
|
Change ($) |
|
|
Change (%) |
|
||||
Net cash used in operating activities |
|
|
(4,803,656 |
) |
|
|
(470,283 |
) |
|
|
(4,333,373 |
) |
|
|
(921 |
)% |
Net cash used in investing activities |
|
|
(211,319 |
) |
|
|
(1,752,168 |
) |
|
|
1,540,849 |
|
|
|
88 |
% |
Net cash provided by financing activities |
|
|
4,464,021 |
|
|
|
2,997,738 |
|
|
|
1,466,283 |
|
|
|
49 |
% |
Net increase (decrease) in cash |
|
|
(550,954 |
) |
|
|
775,287 |
|
|
|
(1,326,241 |
) |
|
|
(171 |
)% |
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Net Cash Used in Operating Activities
Net cash used in operating activities totaled $4,803,656 during the six months ended August 31, 2026, compared to $470,283 during the same period in 2025, an increase of $4,333,373, or 921%. The operating cash outflow during the current period was driven by a net loss of $6,849,152 (before payment of preferred dividends), and net changes in working capital of $306,518, partially offset by non-cash charges of $2,352,014. Non-cash charges included depreciation and amortization of $673,338, provision for credit loss of $154,333, amortization of debt discount of $530,752, share of net loss of equity method investee of $35,200, and shares issued for professional services of $1,289,008, partially offset by a gain on the TA Pipeline derivative liability of $60,000, a gain of $256,957 on the revaluation of the Lind warrant liability, and a credit to stock-based compensation of $13,660 related to a true-up of payroll taxes related to an employee stock grant. Changes in assets and liabilities primarily reflected a decrease in deferred revenue of $479,315, a decrease in SBA loan of $375, an increase in related party receivable of $154,333, and an increase in trade accounts receivable of $66,638. Partially offsetting the decreases were an increase in accounts payable and accrued expenses of $405,672 and a decrease in prepaid expenses of $40,279.
Net Cash Used in Investing Activities
Net cash used in investing activities was $211,319 during the six months ended August 31, 2026, compared to $1,752,168 during the same period in 2025, a decrease of $1,540,849, or 88%. Investing outflows in the current period consisted entirely of capitalized software development costs of $211,319. In addition, $258,286 of software and development costs were capitalized through the issuance of common stock, a non-cash investing activity. In the prior-year period, investing activities consisted of $109,000 in capitalized software development costs, $900,000 paid for the FSA Travel LLC acquisition, $443,168 for the TA Pipeline acquisition, and $300,000 for the JOURNY TV asset purchase.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $4,464,021 during the six months ended August 31, 2026, compared to $ 2,997,738 during the same period in 2025, an increase of $1,466,283, or 49%. Financing activities in the current period consisted of (a) $4,000,000 in gross proceeds for issuance of the Lind convertible note and warrant ($3,830,300 in proceeds net of issuance costs of $169,700); (b) $1,015,000 of gross proceeds from our Helena Series B Convertible Preferred Stock offering (net proceeds of $895,000 after deducting $120,000 in related offering costs), (c) repayment of the Helena Series B Convertible Preferred stock and dividends of $1,151,830, (d) $500,000 in advances from the Monaco Investment Partners II Line of Credit; (e) $307,000 of proceeds from 1800 Diagonal Lending short-term promissory notes (offset by $386,599 of bridge loan repayments); (f) $100,000 in gross proceeds from the sale of a short-term promissory note to a private investor; (g) $200,150 of proceeds from sales of common stock in private placements, (h) $150,000 of proceeds from sales of preferred stock ($145,000 net of $5,000 in offering costs)in private placements; and (i) $25,000 in proceeds from the exercise of warrants. In the prior-year period, financing activities consisted of $2,545,000 of advances from a related party and $486,500 of proceeds from the sale of common stock; partially offset by $33,762 of net repayments on notes payable.
Known Trends, Demands, Commitments, and Uncertainties
Need for additional financing. We will need to raise additional capital through equity, equity-linked, or debt financings, or through other arrangements, to support continuing operations and to execute our business plan. Our existing cash balance is not sufficient to fund our anticipated operating cash requirements for the next twelve months. There can be no assurance regarding the availability or terms of any additional financing. If we issue additional equity or equity-linked securities, our stockholders may experience material dilution, and any new securities may have rights, preferences, or privileges senior to those of our existing common stock. If we incur additional debt, the related instruments may impose covenants and repayment obligations that adversely affect our financial flexibility or business operations. If we are unable to obtain financing when needed, we may be required to delay, scale back, or eliminate one or more aspects of our business plan, including planned product and content investments, and we may lose our Nasdaq listing.
Nasdaq listing requirements. Our continued listing on the Nasdaq Capital Market requires compliance with applicable minimum bid price, stockholders’ equity, market value, and other continued-listing standards. Adverse developments in our operations or financial condition, or further dilutive issuances, could affect our ability to maintain compliance with these requirements. Failure to maintain compliance could result in delisting, which would adversely affect the liquidity of our common stock and our ability to raise additional capital.
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Macroeconomic and geopolitical conditions. We are unable to predict the effect that broader macroeconomic conditions — including elevated interest rates, inflationary pressure on input and labor costs, fluctuations in consumer travel demand, foreign currency volatility, and geopolitical events such as the ongoing conflicts in Ukraine, Iran and Israel — may have on our access to the capital markets, our cost of capital, the timing and cost of our acquisitions, or consumer demand for our travel products. Continued unfavorable trends in these areas could increase our use of cash and impair our ability to obtain additional financing on acceptable terms.
Acquisition integration. We expect to continue to incur integration costs in fiscal 2027 as we combine acquired operations, technology, and content. These integration activities are intended to accelerate revenue generation, but the timing and magnitude of any related revenue contribution remain uncertain.
Subsequent Events Affecting Liquidity
On September 17, 2026, Andy Kaplan, through KCGM Asia LLC, purchased 52,910 shares of Common Stock at $1.89 per share, resulting in gross proceeds to the Company of $100,000. In connection with this transaction, the Company issued KCGM a warrant to purchase up to 52,910 shares of common stock at $1.89 per share. The warrant expires 3 years from the issue date. Mr. Kaplan serves as a director of the Company.
On September 15, 2026, the Company sold a short-term promissory note to its Chief Executive Officer, Bill Kerby in the principal amount of $45,000. The note bears interest at 7.5% and matures on December 15, 2026. The note may be prepaid at any time without penalty.
On September 23, 2026 and October 9, 2026, we sold 100 shares and 15,000 shares of common stock, respectively, under the Titan ATM resulting in total gross proceeds of $31,207.
On September 25, 2026, the Company drew $250,000 under the MIP Line of Credit, on October 5, 2026 the Company drew $235,000, and on October 8, 2026, the Company drew $200,000. The total principal balance outstanding as of the date of this report was $685,000.
Trend in pricing. Our private placements of common stock for cash during the six months ended August 31, 2026 were priced $2.75 per share. The subsequent-event common stock issuance was priced at $1.89 per share, representing a decline relative to the prices of our private placements during the six months ended August 31, 2025. This pricing trend, if it continues, may increase the dilutive impact of future financings on our existing stockholders and may indicate continued pressure on our access to capital on favorable terms.
Other than the foregoing, no material subsequent events related to our liquidity and capital resources have occurred from August 31, 2026 through the date of this Quarterly Report.
Critical Accounting Estimates
Our discussion of critical accounting estimates that affect liquidity, capital resources, and results of operations is set forth in “Critical Accounting Estimates” elsewhere in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 2, “Summary of Significant Accounting Policies,” to the financial statements included elsewhere in this Quarterly Report.
Financing Arrangements and Off-Balance Sheet Arrangements
As of August 31, 2026, our financing arrangements consisted of (i) the MIP Line of Credit with MIP, an entity controlled by the Chairman of our Board of Directors, under which no principal was outstanding and the full $3,500,000 was available for future advances through the May 31, 2028 maturity date (see Note 15, “Related Party Transactions”); (ii) the Senior Secured Convertible Promissory Note issued to Lind Global Fund III LP on July 21, 2026 in the principal amount of $4,600,000 (see Note 14, “Convertible Note Payable and Warrant Liability”); (iii) short-term promissory notes issued to third-party lenders (see Note 12, “Notes Payable”); and (iv) the SBA loan assumed in the FSA acquisition (see Note 13, “Long-Term Debt”), in each case to the financial statements included elsewhere in this Quarterly Report. Subsequent to August 31, 2026, the Company drew $485,000 under the MIP Line of Credit, and we sold a $45,000 short-term promissory note to our Chief Executive Officer (see “Subsequent Events Affecting Liquidity” above). We have no other lines of credit or financing arrangements.
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and our Chief Financial Officer, after evaluating our “disclosure controls and procedures” (as defined in Exchange Act Rules 13a-15(e) and 15d -15(e)) as of the end of the period covered by this Quarterly Report (the “Evaluation Date”), have concluded that as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, where appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Controls Over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
TA Pipeline Arbitration
On August 6, 2025, the Company acquired all of the issued and outstanding membership interests of TA Pipeline LLC ("TA") from its members pursuant to a Membership Interest Purchase Agreement (the "TA MIPA"). As partial consideration, the Company issued 96,774 restricted shares of its common stock (the "TA Closing Shares") to the former members of TA. The TA MIPA also provides for (i) an earnout payment equal to five percent of TA's net revenue during the twelve-month period following the closing, up to a maximum of $200,000, payable one-half in cash and one-half in restricted shares of the Company's common stock valued at $3.10 per share (the "Milestone Payment" and, as to the share portion, the "Milestone Shares"), and (ii) a limited, one-time put right, exercisable if the fair market value of the Company's common stock is below $3.10 per share (the "Base Price"), under which each former member of TA may, among other things, require the Company to repurchase his shares at the Base Price (the "Put Right").
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On July 14, 2026, Luis Barberi, Mitch Toren, and Ashish Tembe, the former members of TA (the "Claimants"), commenced a binding arbitration proceeding against the Company by filing a Demand for Arbitration with the American Arbitration Association (the "AAA") under its Commercial Arbitration Rules. The arbitration is to be conducted in Las Vegas, Nevada. The Demand for Arbitration alleges that the Company breached Section 7.5(a)(i) of the TA MIPA by failing to repurchase the 96,774 TA Closing Shares at the Base Price of $3.10 per share, for an aggregate of approximately $300,000, after the Claimants delivered written notice on February 24, 2026 purporting to exercise the Put Right.
On September 3, 2026, the Claimants filed an Amended Statement of Claim adding a claim that the Company breached Sections 2.2(b) and 2.3(c)(i) of the TA MIPA by failing to pay the Milestone Payment, which the Claimants allege became due no later than August 16, 2026. The Claimants allege that TA generated net revenue of $3,940,126 during the Milestone Payment measurement period, which ended August 6, 2026, and that the resulting Milestone Payment is $197,006. The Claimants now seek damages of not less than $497,005, consisting of approximately $299,999 relating to the Put Right and $197,006 relating to the Milestone Payment, together with pre- and post-judgment interest, attorneys' fees, and arbitration costs.
The Company has not repurchased the TA Closing Shares or paid the Milestone Payment because it believes the Claimants are in material breach of the TA MIPA. On September 9, 2026, the Company filed its Answer and Counterclaim, in which it denies liability and asserts affirmative defenses including prior material breach and excuse, waiver, estoppel, setoff, unclean hands, and failure to mitigate. The Company also asserts counterclaims against the Claimants for (i) breach of the TA MIPA and of the Confidentiality, Non-Competition, and Non-Solicitation Agreements that each Claimant executed in connection with the closing, (ii) breach of the implied covenant of good faith and fair dealing, and (iii) intentional misrepresentation. Among other things, the counterclaims allege that, following the acquisition, one of the Claimants caused an entity that he owns and operates, which was a significant customer of TA, to divert business opportunities away from TA, and that the Claimants misrepresented TA's expected post-acquisition revenue to induce the Company to enter into the TA MIPA. The Company seeks damages of not less than $1,000,000, together with interest, attorneys' fees, and costs.
An evidentiary hearing in the arbitration is scheduled for January 21, 2027. The arbitration remains at an early stage, and the Company is unable to predict its outcome. The Company believes it has meritorious defenses and intends to defend against the Claimants' claims and to pursue its counterclaims vigorously; however, there can be no assurance that the Company will prevail on its defenses or recover any amount on its counterclaims.
As of August 31, 2026, the Company had recorded liabilities of $300,000 for the repurchase of the TA Closing Shares and $200,000 for the Milestone Payment, both of which are included in accrued expenses. The recording of these liabilities does not represent an assessment by the Company of the likely outcome of the arbitration. The Company has not accrued pre- or post-judgment interest, attorneys' fees, or arbitration costs that could be awarded if the arbitration is resolved adversely to the Company, and is unable to estimate those amounts or any other reasonably possible loss in excess of the amounts accrued. See Note 8 - Acquisition of TA Pipeline LLC, Note 17 - Commitments and Contingencies, and Note 20 - Subsequent Events to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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.
ITEM 1A. RISK FACTORS.
You should consider the “Risk Factors” included under Item 1A of our Annual Report on Form 10-K for the year ended February 28, 2026 filed with the SEC on May 29, 2026, as well as the following updated Risk Factor:
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As of August 31, 2026, we had $ 1,145,136 in cash and a working capital deficit of $3,195,601, and our operating activities used $4.8 million of cash during the six months then ended. Our existing cash and anticipated revenues are not sufficient to fund our operations, and we estimate that we will require a minimum of $5.5 million over the next twelve months, which excludes the scheduled installments on the Lind Note described below. Our current sources of additional capital are limited to (i) advances under our $3.5 million line of credit with Monaco Investment Partners II, LP ("MIP"), an entity controlled by the Chairman of our Board, of which $485,000 was drawn after August 31, 2026 and (ii) sales of common stock under our at-the-market offering agreement with Titan Partners Securities LLC. Neither is assured, and we have no other committed sources of financing. If we are unable to obtain financing on acceptable terms, we may be required to delay, limit or terminate our operations and may lose our Nasdaq listing.
In light of the foregoing, there is substantial doubt about our ability to continue as a going concern within one year after the date that these financial statements are issued.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
Proceeds received from the issuance of unregistered common and preferred shares and associated warrants have been used for general working capital purposes.
Common Stock
Date |
|
Recipient |
|
Consideration |
|
Shares |
|
|
Price |
|
|
Value |
|
|||
June 4, 2026 |
|
Ben Higgins |
|
Contractor Services |
|
|
2,067 |
|
|
$ | 2.42 |
|
|
$ | 5,000 |
|
June 5, 2026 |
|
Simon Orange |
|
Consulting Services |
|
|
125,000 |
|
|
$ | 2.46 |
|
|
$ | 307,500 |
|
June 9, 2026 |
|
Ben Higgins |
|
Contractor Services |
|
|
2,193 |
|
|
$ | 2.28 |
|
|
$ | 5,000 |
|
June 16, 2026 |
|
Greg Romsdahl |
|
Warrant Exercise |
|
|
8,278 |
|
|
$ | 3.02 |
|
|
$ | 25,000 |
|
June 17, 2026 |
|
Trick & Mortar |
|
Film Production |
|
|
23,475 |
|
|
$ | 2.13 |
|
|
$ | 50,000 |
|
June 18, 2026 |
|
David Jiang |
|
Private Placement |
|
|
18,200 |
|
|
$ | 2.75 |
|
|
$ | 50,050 |
|
June 19, 2026 |
|
Allen Sanders |
|
Consulting Services |
|
|
12,500 |
|
|
$ | 2.07 |
|
|
$ | 25,875 |
|
June 19, 2026 |
|
Kerry Kennedy |
|
Consulting Services |
|
|
12,500 |
|
|
$ | 2.07 |
|
|
$ | 25,875 |
|
June 19, 2026 |
|
Greg Romsdahl |
|
Consulting Services |
|
|
3,000 |
|
|
$ | 2.07 |
|
|
$ | 6,210 |
|
June 19, 2026 |
|
ConsortiaX |
|
Sales Commission override |
|
|
4,574 |
|
|
$ | 2.07 |
|
|
$ | 9,468 |
|
June 24, 2026 |
|
Jimmy Caplan |
|
IR Consulting Services |
|
|
30,000 |
|
|
$ | 1.98 |
|
|
$ | 59,400 |
|
June 24, 2026 |
|
PartnerCap Securities LLC |
|
Research Reports |
|
|
41,416 |
|
|
$ | 1.98 |
|
|
$ | 82,004 |
|
July 1, 2026 |
|
OnCore Network |
|
IR Consulting Services |
|
|
50,000 |
|
|
$ | 2.15 |
|
|
$ | 107,500 |
|
July 17, 2026 |
|
Chad Doher |
|
Consulting Services |
|
|
25,000 |
|
|
$ | 1.94 |
|
|
$ | 48,500 |
|
August 3, 2026 |
|
Pillow Hog Ventures, Inc. |
|
IR Consulting Services |
|
|
25,000 |
|
|
$ | 1.71 |
|
|
$ | 42,750 |
|
Total |
|
|
383,203 |
|
|
|
|
|
|
$ | 850,132 |
|
||||
Investment Warrants
Date |
|
Grantee |
|
Units |
|
|
Strike |
|
Expiration |
|
Consideration |
||
June 9, 2026 |
|
Gynorris Investments LLC |
|
|
25,000 |
|
|
$ | 2.75 |
|
June 9, 2029 |
|
Short-term note payable |
June 18, 2026 |
|
David Jiang |
|
|
18,200 |
|
|
$ | 2.75 |
|
June 18, 2029 |
|
Cash - Common Shares |
August 3, 2026 |
|
Bill Farrand |
|
|
25,000 |
|
|
$ | 1.71 |
|
August 3, 2029 |
|
Consulting Services |
Total |
|
|
68,200 |
|
|
|
|
|
|
|
|
||
Exemption from Registration
The securities described above were issued in reliance upon the exemptions from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder, as transactions by an issuer not involving a public offering. No general solicitation or general advertising was used. Each recipient was an accredited investor or otherwise had access, through such recipient’s relationship with the Company, to the type of information that would have been provided in a registration statement and represented an investment intent. No underwriting discounts or commissions were paid by the Company in connection with these issuances.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
Rule 10b5-1 Trading Plans
During the six months ended August 31, 2026, none of our directors or officers entered into, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” that were intended to satisfy the affirmative defense conditions of Rule 10b5-1, in each case as defined in Item 408 of Regulation S-K.
ITEM 6. EXHIBITS.
Exhibit Number |
|
Description |
3.1 |
|
Amended and Restated Articles of Incorporation of the Company, as amended (filed as Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on March 24, 2022, and incorporated herein by reference). |
3.2 |
|
Certificate of Amendment to Amended and Restated Articles of Incorporation, as amended (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed August 12, 2022, and incorporated herein by reference). |
3.3 |
|
Certificate of Change Pursuant to NRS 78.209 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed September 22, 2023 and incorporated herein by reference). |
3.4 |
|
Certificate of Amendment, effective March 13, 2024 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed March 12, 2024 and incorporated herein by reference). |
3.5 |
|
Certificate of Designation of Series A Convertible Preferred Stock (filed as Exhibit 3.7 to the Company’ Annual Report on Form 10-K filed May 29, 2026, and incorporated by reference herein). |
3.6 |
|
Certificate of Withdrawal of Certificate of Designation of Series B Preferred Stock (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed August 27, 2026 and incorporated herein by reference). |
3.7 |
|
Certificate of Designation of Series B Convertible Preferred Stock (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed August 27, 2026 and incorporated herein by reference). |
3.8 |
|
Certificate of Designation of Series E Convertible Preferred Stock (Filed as Exhibit 10.7 to the Company’s Current Report on Form 8-K filed January 27, 2020 and incorporated herein by reference) |
3.9 |
|
Amended and Restated Bylaws of the Company, as amended. (filed by the Company as Exhibit 3.12 to the Company’s Form 10-K, filed on March 24, 2021, and incorporated herein by reference). |
3.10 |
|
Amendment No. 3 to Amended and Restated Bylaws of Sigma Additive Solutions, Inc. (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed December 16, 2022, and incorporated herein by reference). |
4.1 |
|
Form of Lind Warrant (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed July 22, 2026, and incorporated herein by reference). |
10.1 |
|
Stock Purchase Agreement, by and among the Company, Yada commerce Inc., High Class Holdings LLC and Carbon Capital Corp dated as of June 10, 2026 (filed as Exhibit 10.1 to the Company’s Current Report filed on Form 8-K, filed on June 12, 2026, and incorporated herein by reference). |
10.2 |
|
Cooperation and Earnout Agreement, by and between the Company and Yada commerce Inc., dated as of June 10, 2026 (filed as Exhibit 10.2 to the Company’s Current Report filed on Form 8-K, filed on June 12, 2026, and incorporated herein by reference). |
10.4 |
|
Amendment to Line of Credit Agreement dated as of dated as of July 13, 2026 (filed as Exhibit 10.1 to the Company’s Current Report filed on Form 8-K, filed on June 15, 2026, and incorporated herein by reference). |
10.5 |
|
Securities Purchase Agreement, dated July 17, 2026, by and between the Company and Lind Global Fund III LP (filed as Exhibit 10.1 to the Company’s Current Report filed on Form 8-K, filed on July 22, 2026, and incorporated herein by reference). |
10.6 |
|
Form of Senior Secured Convertible Promissory Note (filed as Exhibit 10.2 to the Company’s Current Report filed on Form 8-K, filed on July 22, 2026, and incorporated herein by reference). |
10.7 |
|
Form of Security Agreement (filed as Exhibit 10.3 to the Company’s Current Report filed on Form 8-K, filed on July 22, 2026, and incorporated herein by reference). |
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10.8 |
|
Form of Guaranty (filed as Exhibit 10.4 to the Company’s Current Report filed on Form 8-K, filed on July 22, 2026, and incorporated herein by reference). |
10.9 |
|
Form of Pledge Agreement (filed as Exhibit 10.5 to the Company’s Current Report filed on Form 8-K, filed on July 22, 2026, and incorporated herein by reference). |
10.10 |
|
Form of Securities Purchase Agreement, dated July 31, 2026, by and between the Company and the Purchasers listed therein (filed as Exhibit 10.1 to the Company’s Current Report filed on Form 8-K, filed on August 4, 2026, and incorporated herein by reference). |
10.11 |
|
Exchange Agreement, dated August 25, 2026, by and between the Company and the Lender (filed as Exhibit 10.1 to the Company’s Current Report filed on Form 8-K, filed on August 27, 2026, and incorporated herein by reference). |
31.1* |
|
Rule 13a-14(a) Certification of Principal Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
|
Rule 13a-14(a) Certification of Principal Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1** |
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS*** |
|
Inline XBRL Instance Document. |
101.SCH*** |
|
Inline XBRL Schema Document with Embedded Linkbase Documents. |
104 |
|
Cover Page Interactive Data File (the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
* |
Filed herewith. |
** |
Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
*** |
The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
NEXTTRIP, INC. |
|
|
|
|
October 15, 2026 |
By: |
/s/ William Kerby |
|
|
William Kerby |
|
|
Chief Executive Officer (Principal Executive Officer) |
|
|
|
October 15, 2026 |
By: |
/s/ Frank Orzechowski |
|
|
Frank Orzechowski |
|
|
Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) |
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