UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-38015

NEXTTRIP, INC.

(Exact name of registrant as specified in its charter)

nevada

27-1865814

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

3900 Paseo del Sol

Santa Fe, NM 87507

(Address of principal executive offices)

(954) 526-9688

(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
Common Stock, par value $0.001 per share		NTRP		The NASDAQ Stock Market LLC

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.

Yes ☒ No ☐

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 and post such files).

Yes ☒ No ☐

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	☐
Non-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 ☐ No ☒

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, 2024, the issuer had 1,421,427 shares of common stock outstanding.

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	20

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	32

ITEM 4. CONTROLS AND PROCEDURES	32

PART II - OTHER INFORMATION	33

ITEM 1. LEGAL PROCEEDINGS	33

ITEM 1A. RISK FACTORS	33

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	33

ITEM 3. DEFAULTS UPON SENIOR SECURITIES	33

ITEM 4. MINE SAFETY DISCLOSURES	33

ITEM 5. OTHER INFORMATION	33

ITEM 6. EXHIBITS	34

SIGNATURES	36

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

NEXTTRIP, INC. (FORMERLY SIGMA ADDITIVE SOLUTIONS, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

	August 31, 2024 (unaudited)			February 29, 2024

ASSETS
Cash and cash equivalents	$	102,006		$	323,805
Promissory note receivable, net		1,000,000			1,000,000
Accounts receivable, net		11,201			34,082
Prepaid expenses and other current assets		244,870			340,921
Total Current Assets		1,358,077			1,698,808
Non-Current assets
Property and equipment, net		6,703			6,642
Intangible assets, net		2,310,927			2,173,420
Security deposit		45,167			42,167
Goodwill		1,167,805			1,167,805
Total Non-Current Assets		3,530,602			3,390,034
Total Assets	$	4,888,679		$	5,088,842

LIABILITIES
Current Liabilities
Accounts payable	$	1,145,536		$	531,847
Accrued expenses		880,585			460,768
Deferred revenue		138,067			139,921
Notes payable		140,000			-
Notes payable - related parties		2,718,594			828,277
Total Current Liabilities		5,022,782			1,960,813

Total Liabilities		5,022,782			1,960,813

Commitments and Contingencies		-			-

Stockholder’s Equity
Preferred Stock, $0.001 par value, 10,000,000 shares authorized; 93,295 and 472,996 shares issued and outstanding, respectively		94			474
Common Stock, $0.001 par value, 250,000,000 and 1,200,000 shares authorized, respectively; 1,388,641 and 936,430 shares issued and outstanding, respectively		1,389			936
Additional Paid in Capital		27,550,296			27,277,758
Accumulated deficit		(27,685,882	)		(24,151,139	)
Total Stockholders’ Equity		(134,103	)		3,128,029
Total Liabilities and Stockholders’ Equity	$	4,888,679		$	5,088,842

See accompanying notes to condensed financial statements.

NEXTTRIP, INC. (FORMERLY SIGMA ADDITIVE SOLUTIONS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended August 31,						Six Months Ended August 31,
	2024			2023			2024			2023

Revenue	$	154,498		$	27,663		$	343,291		$	47,225
Cost of revenue (exclusive of depreciation and amortization, shown separately below)		155,455			23,734			329,036			41,452
Gross profit (loss)		(957	)		3,929			14,255			5,773

Operating Expenses:
Salaries and benefits		628,759			360,947			1,255,511			768,555
Stock based compensation		13,841			-			30,235			-
General and administrative		21,677			128,955			49,231			198,058
Sales and marketing		51,347			49,758			207,536			90,539
Professional service fees		372,027			125,934			895,900			260,304
Technology		141,022			83,786			325,691			119,680
Organization costs		80,452			-			109,189			-
Depreciation and amortization		95,414			331,549			383,000			667,889
Other expenses		63,796			10,001			179,655			17,731
Total Operating Expenses		1,468,335			1,090,930			3,435,948			2,122,756
Operating loss		(1,469,292	)		(1,087,001	)		(3,421,693	)		(2,116,983	)

Other Income (Expenses)
Interest income (expense), net		(64,227	)		(73,762	)		(99,452	)		(139,151	)
Total Other Income (Expense)		(64,227	)		(73,762	)		(99,452	)		(139,151	)
Net loss from continuing operations before taxes		(1,533,519	)		(1,160,763	)		(3,521,145	)		(2,256,134	)
Provision for income taxes		-			-			-			-
Net loss from continuing operations	$	(1,533,519	)	$	(1,160,763	)	$	(3,521,145	)	$	(2,256,134	)
Net gain (loss) from discontinued operations, net of taxes		(1,131	)		-			7,778		$	-
Net loss	$	(1,534,650	)	$	(1,160,763	)	$	(3,513,367	)	$	(2,256,134	)
Preferred dividends		(10,688	)		-			(21,376	)		-
Net Loss Applicable to Common Stockholders	$	(1,545,338	)	$	(1,160,763	)	$	(3,534,743	)	$	(2,256,134	)
Basic and diluted loss per common share from continuing operations (*)	$	(1.13	)	$	(13.92	)	$	(2.67	)	$	(27.06	)
Basic and diluted loss per common share from discontinued operations (*)	$	(0.01	)	$	-		$	(0.01	)	$	-
Basic and diluted loss per common share (*)	$	(1.14	)	$	(13.92	)	$	(2.68	)	$	(27.06	)
Basic and diluted weighted average number of common shares (*)		1,359,126			83,371			1,319,146			83,371

On December 29, 2023, Sigma Additive Solutions, Inc. acquired NextTrip in a reverse acquisition. NextTrip Group, LLC was issued 83,371 shares of Sigma Additive Solutions, Inc. common stock in exchange for 100% of the issued and outstanding capital stock of NextTrip at the time of the reverse acquisition. The Company has reflected this transaction retroactively in these financial statements.

See accompanying notes to condensed financial statements.

NEXTTRIP, INC. (FORMERLY SIGMAADDITIVE SOLUTIONS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three Months and Six Months Ended August 31, 2024, and August 31, 2023

(Unaudited)

For the Three Months Ended August 31, 2024, and August 31, 2023


	Preferred Stock				Common Stock				Additional
	Shares Outstanding		Preferred Stock		Shares Outstanding		Common Stock		Paid-in Capital		Accumulated Deficit			Total
Balances, May 31, 2024		63,494	$	64		1,345,932	$	1,346	$	27,304,840	$	(26,140,544	)	$	1,165,706
Net Loss		-		-		-		-		-		(1,534,650	)		(1,534,650	)
Preferred Stock Dividends		-		-		-		-		10,688		(10,688	)		-
Issuance of Convertible Preferred Shares		29,801		30		-		-		89,970		-			90,000
Common Shares Issued for Third party Services		-		-		42,709		43		130,957		-			131,000
Stock Options Issued to Employees		-		-		-		-		13,841		-			13,841

Balances, August 31, 2024		93,295	$	94		1,388,641	$	1,389	$	27,550,296	$	(27,685,882	)	$	(134,103	)

	Preferred Stock				Common Stock				Additional
	Shares Outstanding		Preferred Stock		Shares Outstanding		Common Stock		Paid-in Capital		Accumulated Deficit			Total
Balances, May 31, 2023(*)		-	$	-		83,371	$	83	$	17,295,890	$	(17,907,234	)	$	(611,261	)
Net Loss		-		-		-		-		-		(1,160,763	)		(1,160,763	)

Balances, August 31, 2023(*)		-	$	-		83,371	$	83	$	17,295,890	$	(19,067,997	)	$	(1,772,024	)

For the Six Months Ended August 31, 2024, and August 31, 2023

	Preferred Stock						Common Stock				Additional
	Shares Outstanding			Preferred Stock			Shares Outstanding		Common Stock		Paid-in Capital		Accumulated Deficit			Total
Balances, February 29, 2024		472,996		$	474			936,430	$	936	$	27,277,758	$	(24,151,139	)	$	3,128,029
Net Loss		-			-			-		-		-		(3,513,367	)		(3,513,367	)
Preferred Stock Dividends		-			-			-		-		21,376		(21,376	)		-
Issuance of Convertible Preferred Shares		29,801			30			-		-		89,970		-			90,000
Common Shares Issued for Conversion of Preferred Stock		(409,502	)		(410	)		409,502		410		-		-			-
Issuance of Common Shares for Third Party Services		-			-			42,709		43		130,957		-			131,000
Stock Options Issued to Employees		-			-			-		-		30,235		-			30,235

Balances, August 31, 2024		93,295		$	94			1,388,641	$	1,389	$	27,550,296	$	(27,685,882	)	$	(134,103	)

	Preferred Stock				Common Stock				Additional
	Shares Outstanding		Preferred Stock		Shares Outstanding		Common Stock		Paid-in Capital		Accumulated Deficit			Total
Balances, February 28, 2023(*)		-	$	-		83,371	$	83	$	17,295,890	$	(16,811,863	)	$	484,110
Balances		-	$	-		83,371	$	83	$	17,295,890	$	(16,811,863	)	$	484,110
Net Loss		-		-		-		-		-		(2,256,134	)		(2,256,134	)

Balances, August 31, 2023(*)		-	$	-		83,371	$	83	$	17,295,890	$	(19,067,997	)	$	(1,772,024	)
Balances		-	$	-		83,371	$	83	$	17,295,890	$	(19,067,997	)	$	(1,772,024	)

See accompanying notes to condensed financial statements.

NEXTTRIP, INC. (FORMERLY SIGMA ADDITIVE SOLUTIONS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended
	August 31, 2024			August 31, 2023
OPERATING ACTIVITIES
Net Loss – Continuing Operations	$	(3,521,145	)	$	(2,256,134	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Noncash Expenses:
Depreciation and amortization – property and equipment and intangibles		383,000			667,889
Depreciation of right of use asset		-			74,848
Stock-based compensation		30,235			-

Change in Assets and Liabilities:
Accounts receivable		22,881			(5,000	)
Prepaid expenses		96,051			(34,114	)
Promissory note receivable		-			(8,722	)
Accounts payable and accrued expenses		1,033,506			110,959
Deferred revenue		(1,854	)		57,156
Security deposit		(3,000	)		-
NET CASH USED IN OPERATING ACTIVITIES FROM CONTINUING OPERATIONS		(1,960,326	)		(1,393,118	)
NET CASH PROVIDED IN OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS		7,778			-
NET CASH USED IN OPERATING ACTIVITIES		(1,952,548	)		(1,393,118	)

INVESTING ACTIVITIES
Capitalized software development costs		(389,568	)		(345,807	)
NET CASH USED IN INVESTING ACTIVITIES		(389,568	)		(345,807	)

FINANCING ACTIVITIES
Proceeds from issuance of convertible notes		-			1,269,852
Proceeds from issuance of convertible preferred shares		90,000			-
Notes payable		140,000			-
Advances from related parties		1,890,317			292,500
NET CASH PROVIDED BY FINANCING ACTIVITIES		2,120,317			1,562,352

NET CHANGE IN CASH FOR PERIOD		(221,799	)		(176,573	)

CASH AT BEGINNING OF PERIOD		323,805			282,475

CASH AT END OF PERIOD	$	102,006		$	105,902

Supplemental Disclosures:
Noncash Investing and Financing Activities Disclosure:
Issuance of common shares for services	$	131,000		$	-
Preferred stock dividends	$	21,736		$	-
Disclosure of Cash Paid for:
Interest	$	8,620		$	410
Income Taxes	$	-		$	-

See accompanying notes to condensed financial statements.

NEXTTRIP, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

August 31, 2024

NOTE 1 - Business Description and Going Concern

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, 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 3900 Paseo del Sol, Santa Fe, NM 87507 The consolidated financial statements include the accounts of the Company’s wholly owned subsidiaries, NextTrip Holdings Inc. incorporated October 22, 2015, and Extraordinary Vacations USA, Inc. incorporated on June 24, 2002.

Prior to the Exchange Agreement as described below, NextTrip Holdings, Inc. (“NextTrip”) was a wholly owned subsidiary of NextTrip Group, LLC (“Group”), which in turn, was a wholly owned subsidiary of NextPlay Technologies, Inc. (“NextPlay”). All of the business operations of Group were conducted through its subsidiaries. On January 25, 2023, NextPlay and Group entered into an Amended and Restated Separation Agreement (“Separation Agreement”), Amended and Restated Operating Agreement (“Operating Agreement”), and Exchange Agreement (“Exchange Agreement”, and together, the “Agreements”), whereby NextPlay transferred their interest in the travel business to Group. Pursuant to the Exchange Agreement, NextPlay exchanged 1,000,000 Membership Units of Group for 400,000 Preferred Units of Group, with a value of $10 per unit. Prior to the exchange for Preferred Units, Group had a payable due to NextPlay of $17,295,873, representing cash advances and payment of expenses by NextPlay on behalf of Group, while NextPlay had obligations to provide ongoing support to NextTrip. Such liability was settled by the issuance of the Preferred Units and the waiver of all of NextPlay’s ongoing support obligations except for a $1.5 million advance remaining under a promissory note and as such NextTrip recorded the payable as contributed capital.

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

The Company owns 50% of Next Innovation LLC (Joint Venture) and this entity is in the process of a first structure plan. No activities nor operations occurred in 2023 or 2024 for this entity, and NextTrip, Inc. does not have control of the company and therefore no minority interest was recorded.

Reverse Acquisition

On October 12, 2023, Sigma entered into a Share Exchange Agreement (as amended, the “Exchange Agreement”) with NextTrip, Group, and William Kerby (the “NextTrip Representative”). Under the terms of the Exchange Agreement, the parties agreed that Group would sell and transfer to Sigma all of the issued and outstanding shares of NextTrip in exchange for 156,007 restricted shares of Sigma common stock (the “Closing Shares”), issuable at closing, and the right to receive up to an additional 5,843,993 restricted shares of Sigma common stock upon satisfaction of certain milestones set forth in the Exchange Agreement (the “Contingent Shares,” and together with the Closing Shares, the “Restricted Shares”), which Restricted Shares are issuable to the members of Group, on a pro rata basis, under the terms of the Exchange Agreement, subject to certain closing conditions (the “Acquisition”). Upon the closing of the Acquisition on December 29, 2023, NextTrip became a wholly owned subsidiary of Sigma.

The Contingent Shares, together with the Closing Shares, will not exceed 6,000,000 shares of Sigma common stock, or approximately 90.2% of the issued and outstanding shares of Sigma common stock immediately prior to the closing. The Acquisition will likely result in a change of control, with the members of Group receiving an aggregate number of shares that exceeds the number of shares that held by the legacy shareholders of Sigma. As a result, the Acquisition is accounted for as a reverse acquisition of NextTrip by Sigma, whereby Sigma is treated as the legal acquirer and NextTrip is treated as the accounting acquirer. As a result, the historical financial information presented is that of NextTrip.

In accordance with ASC 805-40-45-1, the 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 (NextTrip), 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. Comparative information presented in the consolidated financial statements also is retroactively adjusted to reflect the legal capital of the legal parent.

Under ASC 805-40-45-2, the 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 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 Additive Solutions, Inc. were recognized at fair value pursuant to ASC 805.

Going Concern – The Company has sustained losses and had negative cash flows from operating activities since its inception.

The Company currently does not have sufficient cash and working capital to fund its operations and will require additional funding in the public or private markets in the near-term to be able to continue operations. The Company currently has no understanding or agreement to obtain such funding, and there is no assurance that we will be successful in obtaining additional funding. If we fail to obtain sufficient funding when needed, we will be forced to delay, scale back or eliminate all or a portion of our commercialization efforts and operations. As a result, there is substantial doubt about our ability to continue as a going concern.

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, 2024 and 2023 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 condensed financial statements be read in conjunction with the February 29, 2024 audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 4, 2024. The results of operations for the period ended August 31, 2024 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.

Promissory Note Receivable

NextPlay is in default under the terms of its promissory note to NextTrip, and as a result, an allowance for doubtful accounts of $1,567,665 was established as of February 29, 2024, as collectability of the entire receivable is uncertain. During the three and six months ended August 31, 2024, and 2023, there was no bad debt expense recorded related to the allowance account, and the allowance is unchanged as of August 31, 2024. As of August 31, 2023, no allowance for doubtful accounts was established.

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 and preferred stock were excluded due to the anti-dilutive effect they would have on the computation. At August 31, 2024 and 2023 the Company had the following common shares underlying these instruments:

	2024		2023
	August 31,
	2024		2023
Warrants		78,877		-
Stock Options		484,063		-
Preferred Stock		96,238		-
Total Underlying Common Shares		659,178		-

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, 2024, and 2023:

	2024			2023			2024			2023
	Three Months Ended August 31,						Six Months Ended August 31,
	2024			2023			2024			2023

Loss from continuing operations	$	(1,533,519	)	$	(1,160,763	)	$	(3,521,145	)	$	(2,256,134	)
Preferred dividends	$	(10,688	)	$	-		$	(21,376	)	$	-
Loss from continuing operations applicable to common stockholders		(1,544,207	)		(1,160,763	)		(3,542,521	)		(2,256,134	)
Gain (loss) from discontinued operations applicable to common stockholders		(1,131	)		-			7,778			-
Net loss applicable to common stockholders	$	(1,545,338	)	$	(1,160,763	)	$	(3,534,743	)		(2,256,134	)
Weighted average number of common shares outstanding used in loss per share during the period (denominator)		1,359,126			83,371			1,319,146			83,371

Dilutive loss per share was not presented, as the Company’s outstanding warrants, stock options and preferred stock common equivalent shares for the periods presented would have had an anti-dilutive effect. At August 31, 2024, the Company had outstanding warrants to purchase 484,063 shares of common stock, stock options exercisable for 78,877 shares of common stock, 316 shares of Series E Preferred Stock, which could be converted into 3,259 shares of common stock, 33,000 shares of Series H Preferred Stock, convertible into 33,000 shares of common stock, and 59,979 shares of Series I Preferred Stock, convertible into 59,979 shares of common stock, resulting in a potential total additional 659,178 shares of common stock outstanding in the future. At August 31, 2023, the Company had no outstanding potentially dilutive securities.

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 impairment of long-lived assets, values of stock compensation awards and stock equivalents granted as offering costs, and allowance for bad debts and inventory obsolescence.

Revenue Recognition – The Company recognizes revenue in accordance with ASC Topic No. 606. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that superseded nearly all existing revenue recognition guidance under prior U.S. GAAP and replaced it with a principles-based approach for determining revenue recognition. The core principle of the standard 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 recognizes revenue when the customer has purchased the product, the occurrence of the earlier of date of travel or the date of cancellation has expired, as satisfaction of the performance obligation, the sales price is fixed or determinable and collectability is reasonably assured. Revenue for customer travel packages purchased directly from the Company 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.

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

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

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

	●	The Company has discretion in establishing the price for the specified travel product.

Payments for tours or activities received in advance of services being rendered are recorded as deferred revenue and recognized as revenue at the earlier of the date of travel or the last date of cancellation (i.e., the customer’s refund privileges lapse).

NOTE 3 – Intangible Assets

Intangible assets as of August 31, 2024, and February 29, 2024 consisted of the following:

Schedule of Intangible Assets

	August 31, 2024			February 29, 2024
Software Development	$	7,122,596		$	6,602,028
Software Licenses		789,576			789,576
Trademark		6,283			6,283
Total		7,918,455			7,397,887
Accumulated amortization		(5,607,528	)		(5,224,467	)
Intangible assets, net of amortization	$	2,310,927		$	2,173,420

Amortization expense for the six months ended August 31, 2024, and 2023 was $383,061 and $657,389, respectively.

During the three and six months ended August 31, 2024, and 2023, the Company recorded no impairment losses associated with the carrying value exceeding its recoverable amount.

The estimated aggregate amortization expense for years ending February 28 is as follows:


2025 (Remaining)	$	200,232
2026		313,329
2027		270,728
2028		2,957
Thereafter		-
Total	$	787,246

NOTE 4 – Goodwill

The legal acquisition of NextTrip Holdings, Inc. by Sigma Additive Solutions, Inc. on December 29, 2023 was determined to be a reverse acquisition, with NextTrip 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 is allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of consummation of the transaction.

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 NextTrip’s objective to obtain access to public markets to provide funding wherewithal to fund business growth. NextTrip’s benefit in paying for these synergies in the reverse acquisition transaction are to avoid the time and expense of organizing and executing an Initial Public Offering (“IPO”) transaction. In the reverse acquisition, $1,167,805 of goodwill was allocated to the NextTrip Reporting Unit under the acquisition method of accounting.

NOTE 5 - Related Party Transactions

On March 18, 2024, the Company’s wholly-owned subsidiary, NextTrip, entered into an unsecured promissory note for a line of credit with Donald Monaco and William Kerby, the Company’s Chairman of the board of directors and Chief Executive Officer, respectively, for the aggregate principal amount of $500,000 with an initial advance of $125,000, provided that the aggregate principal amount of the note does not exceed $500,000 at any time. Under the terms of the note, advances under the line of credit may be made at the Company’s request until August 31, 2024. The note bears an annual interest rate of 7.5% and matures on February 28, 2025, and may be prepaid by the Company at any time prior to maturity without penalty. As of August 31, 2024, the full principal amount of the note had been advanced to the Company.

On April 23, 2024, the Company’s board of directors approved the Company’s wholly-owned subsidiary, NextTrip, to enter into a series of unsecured promissory notes with certain related parties, including investors, directors, officers and employees, who may individually provide funds for the aggregate principal amount of $1,000,000. The notes bear an annual interest rate of 7.5% and shall mature one year from the date of each note’s execution, and may be prepaid by the Company at any time prior to maturity without penalty. On August 14, 2024, at a joint meeting of the Audit Committee and the board of directors, the directors unanimously approved an increase in the principal amount of the related party line of credit to $2,000,000 on the same terms and conditions as previously approved. As of August 31, 2024, $1,411,414 had been advanced to the Company.

On May 21, 2024, NextTrip issued an unsecured promissory note, in the principal amount of $455,000 (the “Promissory Note”), to Mr. Monaco to memorialize the terms and conditions of certain working capital advances made by Mr. Monaco to NextTrip. As of August 31, 2024, the outstanding principal balance of the Line of Credit Promissory Note was $405,000. The Promissory Note accrues interest at a rate equal to 7.5% simple interest per annum, and will automatically mature and become due and payable in full on February 28, 2025, subject to certain limited exceptions. The Promissory Note, or any portion thereof, may be prepaid by NextTrip without any penalty. Mr. Monaco serves as Chairman of the Company’s board of directors. The Promissory Note was approved by the Company’s Board of Directors, including the independent members thereof.

The total amounts due to related parties at August 31, 2024 and February 29, 2024 totaled $2,718,594 and $828,277, respectively.

NOTE 6 – Notes Payable

On May 24, 2024, the Company issued an unsecured promissory note for $100,000 to an investor upon receipt of proceeds. The note bears an annual interest rate of 7.5% and will mature and be due and payable on the earlier date of the completion of a public financing or October 31, 2024, unless extended by the written consent of the investor. The note can be prepaid at any time by the Company without penalty.

On July 11, 2024, the Company issued an unsecured promissory note for $40,000 to an investor upon receipt of proceeds. The note bears an annual interest rate of 7.5% and will mature and be due and payable on June 25, 2025, unless extended by the written consent of the investor. The note can be prepaid at any time by the Company without penalty.

NOTE 7 - Leases

On January 25, 2023, as part of the separation agreement with NextPlay Technologies Inc., the Company assumed control of a lease arrangement for office space in Florida.

The Company adopted ASU 2016-02 (Topic ASC 842) Leases, which requires a lessee to recognize a lease asset and a leases liability for operating leases arrangements greater than twelve (12) months.

We determined that the arrangement was an operating lease at inception and included it in operating lease ROU assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheet as of February 28, 2023. The office facility was occupied by NextTrip employees through March 16, 2023, when the landlord informed NextTrip that it would not recognize NextTrip as the tenant. The Company continued to negotiate the assumption of the lease with the landlord, but was ultimately unsuccessful, and as a result derecognized the lease in the financial statements as of February 29, 2024. No restatement was made for fiscal year 2023 as the Company had use of the offices at that time and was in negotiations to assume the lease from NextPlay Technologies, Inc. No payments have been made on the lease and no expense has been recognized for the three and six months ended August 31, 2024. Rent expense for the three and six months ended August 31, 2023 totaled $37,822 and $74,847, respectively.

The Company leases approximately 350 square feet of space for its principal executive offices at 3900 Paseo del Sol, Santa Fe, New Mexico 87507. The lease has a 6-month term which ends on December 31, 2024. The landlord can terminate the lease upon 30 days written notice and NextTrip can terminate the lease upon 45 days written notice. Therefore, the Company has elected the short-term lease recognition exemption, whereby leases are not recorded on the Company’s balance sheet and lease payments are recognized as lease expense on a straight-line basis over the lease term. Rent expense related to this lease for the three and six months ended August 31, 2024 was $1,650 and $3,300, respectively, and $0 for the same periods in 2023.

NOTE 8 - Stockholders’ Equity

Common Stock

On March 8, 2024, at a special meeting of stockholders, the Company received approval to increase its authorized shares of common stock from 1,200,000 to 250,000,000 (the “Increase in Authorized”). On March 11, 2024, the Company 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, the Increase in Authorized was implemented.

In the first quarter of 2024, the Company issued 100,000 shares of common stock upon conversion of 100,000 shares of Series G Convertible Preferred Stock, 117,000 shares of common stock upon conversion of 117,000 shares of Series H Convertible Preferred Stock, and 192,502 shares of common stock upon conversion of 192,502 shares of Series I Convertible Preferred Stock.

In the second quarter of 2024, the Company issued 42,709 shares of common stock to a service provider as partial compensation for development work related to Compass.tv, the Company’s Free-Ad Supported TV (“FAST”) channel.

Preferred Stock

Under our amended and restated articles of incorporation, as amended (“Articles”), 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 10,000,000 shares of preferred stock, $0.001 par value. An aggregate of 93,295 and 472,996 shares of preferred stock were issued and outstanding at August 31, 2024 and February 29, 2024, respectively.

Series E Convertible Preferred Stock

Under the Certificate of Designations for the Series E Preferred Stock, the Series E Preferred Shares have an initial stated value of $1,500 per share (the “Stated Value”). Dividends at the initial rate of 9% per annum will accrue and, on a monthly basis, shall be payable in kind by the increase of the Stated Value of the Series E Preferred Stock by said amount. The holders of the Series E Preferred Shares have the right at any time to convert all or a portion of the Series E Preferred Shares (including, without limitation, accrued and unpaid dividends and make-whole dividends through the third anniversary of the closing date) into shares of the Company’s common stock at an initial conversion rate determined by dividing the Conversion Amount by the Conversion Price ($0.13 above the consolidated closing bid price for the trading day prior to the execution of the relates stock purchase agreement). The Conversion Amount is the sum of the Stated Value of the Series E Preferred Shares then being converted plus any other unpaid amounts payable with respect to the Series E Preferred Shares being converted, plus the “Make Whole Amount” (the amount of any dividends that, but for the conversion, would have accrued at the dividend rate for the period through the third anniversary of the initial issuance date). The Conversion Rate is also subject to adjustment for stock splits, dividends recapitalizations and similar events.

At August 31, 2024, 316 shares of the issued Series E Convertible Preferred Stock were outstanding, which if converted as of August 31, 2024, including the make-whole dividends, would have resulted in the issuance of 3,259 shares of common stock.

Series F Convertible Preferred Stock

On January 4, 2024, the Company filed a Certificate of Designation of Series F Convertible Preferred Stock (the “Series F Certificate of Designation”) with the Secretary of State of the State of Nevada, designating 5,843,993 shares of the Company’s preferred stock as Series F Convertible Preferred Stock, par value $0.001 per share (the “Series F Preferred”). The Series F Preferred was designated by the Company in connection with its acquisition of NextTrip, and, in the event that the Company does not have sufficient shares of common stock available to fulfill its obligations pursuant to the Share Exchange Agreement governing the terms of the acquisition, shares of Series F Preferred shall be issued to the previous equity holders of NextTrip in lieu of shares of Company common stock.

The terms and conditions set forth in the Series F Certificate of Designation are summarized below:

Ranking. The Series F Preferred rank pari passu to the Company’s common stock.

Dividends. Holders of Series F 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 Articles, or as otherwise required by the Nevada Revised Statutes, holders of Series F 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 F 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 F Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series F Preferred or alter or amend the Series F Certificate of Designation, (ii) amend its Articles or other charter documents in any manner that adversely effects any rights of the holders of the Series F Preferred, or (iii) enter into any agreement with respect to the foregoing.

Conversion. On such date that the Company amends its Articles to increase the number of shares of common stock authorized for issuance thereunder, to at least the extent required to convert all of the outstanding Series F Preferred, each outstanding share of Series F Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Conversion Ratio”).

Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary (each, a “Liquidation”), holders of Series F Preferred will be entitled to participate, on an as-converted-to-common stock basis calculate based on the 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, 2024, no shares of the Series F Convertible Preferred Stock were outstanding.

Series G Convertible Preferred Stock

On January 26, 2024, the Company filed a Certificate of Designation of Series G Convertible Preferred Stock (the “Series G Certificate of Designation”) with the Secretary of State of the State of Nevada, designating 100,000 shares of the Company’s preferred stock as Series G Preferred Stock, par value $0.001 per share (the “Series G Preferred”).

The terms and conditions set forth in the Series G Certificate of Designation are summarized below:

Ranking. The Series G Preferred rank pari passu to the Company’s common stock.

Dividends. Holders of Series G 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 Articles or as otherwise required by the Nevada Revised Statutes, holders of Series G 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 G 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 G Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series G Preferred or alter or amend the Series G Certificate of Designation, (ii) amend its Articles or other charter documents in any manner that adversely effects any rights of the holders of the Series G Preferred, or (iii) enter into any agreement with respect to the foregoing.

Conversion. On such date that the Company amends its Articles to increase the number of shares of common stock authorized for issuance thereunder, to at least the extent required to convert all of the outstanding Series G Preferred, each outstanding share of Series G Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series G Conversion Ratio”).

Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series G Preferred will be entitled to participate, on an as-converted-to-common stock basis calculate based on the Series G Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.

Redemption Right. The Company shall have the right to redeem up to 50% of the Series G Preferred Stock for an aggregate price of $1.00 in accordance with the terms of the Perpetual License Agreement.

At August 31, 2024, no shares of the issued Series G Convertible Preferred Stock were outstanding.

Series H Convertible Preferred Stock

On January 26, 2024, the Company filed a Certificate of Designation of Series H Convertible Preferred Stock (the “Series H Certificate of Designation”) with the Secretary of State of the State of Nevada, designating 150,000 shares of the Company’s preferred stock as Series H Preferred Stock, par value $0.001 per share (the “Series H Preferred”).

The terms and conditions set forth in the Series H Certificate of Designation are summarized below:

Ranking. The Series H Preferred rank pari passu to the Company’s common stock.

Dividends. Holders of Series H 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 Articles or as otherwise required by the Nevada Revised Statutes, holders of Series H 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 H 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 H Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series H Preferred or alter or amend the Series H Certificate of Designation, (ii) amend its Articles or other charter documents in any manner that adversely effects any rights of the holders of the Series H Preferred, or (iii) enter into any agreement with respect to the foregoing.

Conversion. On such date that the Company amends its Articles to increase the number of shares of common stock authorized for issuance thereunder, to at least the extent required to convert all of the outstanding Series H Preferred, each outstanding share of Series H Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series H Conversion Ratio”).

Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series H Preferred will be entitled to participate, on an as-converted-to-common stock basis calculate based on the Series H 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, 2024, 33,000 shares of the issued Series H Convertible Preferred Stock were outstanding, which if converted as of August 31, 2024, would have resulted in the issuance of 33,000 shares of common stock.

Series I Convertible Preferred Stock

On February 22, 2024, the Company filed a Certificate of Designation of Series I Convertible Preferred Stock (the “Series I Certificate of Designation”) with the Secretary of State of the State of Nevada, designating 331,124 shares of the Company’s preferred stock as Series I Convertible Preferred Stock, par value $0.001 per share (the “Series I Preferred”).

The terms and conditions set forth in the Series I Certificate of Designation are summarized below:

Ranking. The Series I Preferred rank pari passu to the Company’s common stock.

Dividends. Holders of Series I 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 Articles, or as otherwise required by the Nevada Revised Statutes, holders of Series I 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 I 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 I Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series I Preferred or alter or amend the Series I Certificate of Designation, (ii) amend its Articles or other charter documents in any manner that adversely effects any rights of the holders of the Series I Preferred, or (iii) enter into any agreement with respect to the foregoing.

Conversion. On such date that the Company amends its Articles to increase the number of shares of common stock authorized for issuance thereunder, to at least the extent required to convert all of the outstanding shares of Series I Preferred, each outstanding share of Series I Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series I Conversion Ratio”).

Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series I Preferred will be entitled to participate, on an as-converted-to-common stock basis calculated based on the Series I Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.

On August 15, 2024, the Company entered into a securities purchase agreement with an investor for the sale of 4,967 shares of Series I Convertible Preferred Stock, at $3.02 per share, resulting in gross proceeds to the Company of $15,000.

On August 31, 2024, the Company entered into a securities purchase agreement with an investor for the sale of 24,834 shares of Series I Convertible Preferred Stock at $3.02 per share, resulting in gross proceeds to the Company of $75,000.

At August 31, 2024, 59,979 shares of the issued Series I Convertible Preferred Stock were outstanding, which if converted as of August 31, 2024, would have resulted in the issuance of 59,979 shares of common stock.

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”). 7,000,000 shares of common stock have been reserved for issuance under the 2023 Plan., and as of August 31, 2024, all of such shares are available for issuance.

The Company’s 2013 Equity Incentive Plan expired on March 15, 2023. As such, no new grants may be made under the 2013 Plan. At August 31, 2024, there were 78,877 shares of common stock reserved for issuance upon exercise of outstanding stock options issued under the 2013 Plan prior to its expiration.

There were no issuances of stock options for the six months ended August 31, 2024 or August 31, 2023.

The Company generally grants stock options to employees 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 100% of the fair market value. Stock options are typically granted throughout the year and generally vest over a period from one to three years of service and expire five years from the grant date, unless otherwise specified. The Company recognizes compensation expense for the fair value of the stock options over the vesting period for each stock option award.

Total stock-based compensation expense included in the statements of operations for the three and six months ended August 31, 2024 was $13,841 and $30,235, respectively, all of which was related to stock options. There was no stock-based compensation included in the statements of operations for the three or six months ended August 31, 2023.

Option activity for the six months ended August 31, 2024 and the year ended February 29, 2024 was as follows:

	Options			Weighted Average Exercise Price ($)		Weighted Average Remaining Contractual Life (Yrs.)		Aggregate Intrinsic Value ($)

Options outstanding at February 28, 2023		-			-		-		-
Options assumed pursuant to reverse acquisition		86,642			61.43		2.68		-
Granted		-			-		-		-
Exercised		-			-		-		-
Forfeited or cancelled		(1,342	)		120.87		-		-
Options outstanding at February 29, 2024		85,300			60.50		2.52		-
Granted		-			-		-		-
Exercised		-			-		-		-
Forfeited or cancelled		(6,423	)		87.06		-		-
Options outstanding August 31, 2024		78,877			58.19		2.03		-
Options expected to vest in the future as of August 31, 2024		1,432			32.25		3.10		-
Options exercisable at August 31, 2024		77,445			58.67		2.01		-
Options vested, exercisable, and options expected to vest at August 31, 2024		78,877			58.19		2.03		-

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, 2024, no option had an exercise price below the $2.59 closing price of our common stock as reported on the Nasdaq Capital Market.

At August 31, 2024, there was $16,139 of unrecognized stock-based compensation expense related to unvested stock options with a weighted average remaining recognition period of 0.74 years.

Stock Appreciation Rights

The purposes of the 2020 Stock Appreciation Rights Plan (the “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 SAR Plan provides for incentive awards only in the form of stock appreciation rights payable in cash (“SARs”) and no shares of common stock are reserved or will be issued pursuant to the 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 (“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 of common stock on the date of grant of the SAR. The administrator of the 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.

The Company did not grant any SAR’s during the six months ended August 31, 2024 or August 31, 2023.

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, 2024 and the year ended February 29, 2024 was as follows:

SARs

Weighted

Average

Exercise

Price ($)

Weighted

Average

Remaining

Contractual Life (Yrs.)

Aggregate

Intrinsic

Value ($)

SARs outstanding at February 28, 2023

SEC Form 10-Q filed by NextTrip Inc.