XML 22 R12.htm IDEA: XBRL DOCUMENT

Summary of Significant Accounting Policies

9 Months Ended

Nov. 30, 2024

Summary of Significant Accounting Policies

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 November 30, 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 November 30, 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

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

The Company has entered into a non-binding Memorandum of Understanding (“MOU”) with NextPlay, whereby the Company has agreed to forgive the entire amount due under the NextPlay Note in exchange for the cancellation of the 400,000 Preferred Units of NTG issued to them as described in Note 1. The Preferred Units are convertible into 500,000 NextTrip, Inc. common shares, of which 13,001 such common shares were issued as Closing Shares on December 29, 2023. The Company has a commitment from a third party to purchase all 500,000 shares at a price of $2.00 per share. As a result, the since Company can realize a minimum of $1,000,000 from NextPlay’s sale of the common shares, a valuation allowance of $1,567,665 was established as of February 29, 2024. The Company is in the process of negotiating a second offer to purchase the shares, and therefore has not closed the transaction with NextPlay. The Company expects to close one of the transaction options before year-end. During the three and nine months ended November 30, 2024 and 2023, there was no bad debt expense recorded related to the allowance account, and the allowance is unchanged as of November 30, 2024. As of November 30, 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 November 30, 2024 and 2023 the Company had the following common shares underlying these instruments:

	2024		2023
	November 30,
	2024		2023
Warrants		679,737		-
Stock Options		78,867		-
Preferred Stock		228,514		-
Total Underlying Common Shares		987,118		-

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 three and nine months ended November 30, 2024, and 2023:

	2024			2023			2024			2023
	Three Months Ended November 30,						Nine Months Ended November 30,
	2024			2023			2024			2023

Loss from continuing operations	$	(2,009,829	)	$	(1,308,262	)	$	(5,530,975	)	$	(3,564,396	)
Preferred dividends		(10,688	)		-			(32,063	)		-
Loss from continuing operations applicable to common stockholders		(2,020,517	)		(1,308,262	)		(5,563,038	)		(3,564,396	)
Gain (loss) from discontinued operations applicable to common stockholders		566			-			8,344			-
Net loss applicable to common stockholders	$	(2,019,951	)	$	(1,308,262	)	$	(5,554,694	)		(3,564,396	)
Weighted average number of common shares outstanding used in loss per share during the period (denominator)		5,811,765			83,371			4,116,003			83,371

On June 10, 2024, the Company determined that three of the four business milestones per the Share Exchange Agreement had been achieved. As a result, 4,393,993 of the total contingent shares of 5,843,993 became eligible for issuance. Pursuant to ASC 260, as there are no circumstances under which the shares will not be issued, such eligible contingent shares are included in the computation of basic earnings per share. The following table shows the business milestones and the issuable contingent shares:

Business Milestones	Contingent Shares
Achieved
Launch of leisure travel booking platform		1,450,000
Launch of group travel booking platform		1,450,000
Launch of FlexPay technology		1,493,993
Total contingent shares issuable on June 10, 2024		4,393,993

Not Achieved
Launch of travel agent platform		1,450,000
Total contingent shares potentially issuable in future periods		1,450,000
Total contingent shares		5,843,993

The following table shows the reconciliation of the weighted average common shares outstanding for the three and nine months ended November 30, 2024 to the weighted average common shares used in the computation of basic earnings per share:

	Weighted Average Number of Common Shares
	Three Months Ended November 30, 2024		Nine Months Ended November 30, 2024
1,429,492 common shares outstanding		1,417,772		1,351,782
4,393,993 issuable contingent shares		4,393,993		2,764,221
Weighted average common shares outstanding		5,811,765		4,116,003

The issuable contingent shares are of the Company’s sole class of common stock, and as such have the same rights and privileges as existing common stock.

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 November 30, 2024, the Company had outstanding warrants to purchase 679,737 shares of common stock, stock options exercisable for 78,867 shares of common stock, 316 shares of Series E Preferred Stock, which could be converted into 3,310 shares of common stock, 33,000 shares of Series H Preferred Stock, convertible into 33,000 shares of common stock, and 192,204 shares of Series I Preferred Stock, convertible into 192,204 shares of common stock, resulting in a potential total additional 987,118 shares of common stock outstanding in the future. At November 30, 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).